If you’re tired of the high fees charged by many Canadian banks, it may be time to consider switching to a new bank and opening a no-fee bank account. No-fee or free bank accounts often come with unlimited transactions and no monthly account fees.

What is a no-fee bank account?

Canada’s financial landscape is dominated by what are known as the “Big Six banks,” which are:

However, over the last decade or two, a number of alternative financial institutions — often referred to as online banks — have sprung up. These digital banks compete with the Big Six banks by offering low or no-fee savings and chequing accounts.

While the large traditional financial institutions sometimes offer bank accounts with no fees or low fees, they tend to limit transactions, require the account holder to maintain a minimum balance, or charge a fee for certain services, such as e-transfer and paper statements. However, alternative or online banks tend to offer free bank accounts with few restrictions, no minimum balances and no monthly fees.

How does a no-fee bank account work?

No-fee bank accounts generally allow you to make withdrawals and deposits, pay bills and transfer funds between accounts all for free.

Some banks may limit the number of free transactions you can complete each month and charge a fee for any additional transactions, so make sure you read the terms and conditions before opening an account.

Many of the Canadian banks that offer free accounts are online-only banks or are the online divisions of major traditional banks, which means you’ll do all your banking through a website or mobile app. These banks usually don’t provide access to ATMs, so if you want to withdraw cash, you may have to transfer money to an account at a different bank. But the subsidiaries of larger institutions may offer access to large networks of ATMs for convenient cash withdrawals.

Types of no-fee bank accounts

Switching to a free bank account probably sounds like an obvious good idea. But make sure you weigh the compromises that might come with the type of no-fee account you choose, such as limited transactions or online-only banking.

If your goal is to save on recurring fees, you can consider no-fee chequing accounts or hybrid accounts — a chequing and savings account in one.

If your financial situation evolves, your focus may shift to saving and investing. You can look for online savings accounts with alternative or online banks that are likely to offer higher interest rates and no monthly fees, provided you don’t mind virtual banking.

These accounts may include:

Non-registered high-interest savings accounts.
Registered accounts like tax-free savings accounts (TFSAs) and retirement savings accounts (RRSPs).

Pros and cons of free bank accounts

When deciding between a free chequing, savings or hybrid account at an online bank and a traditional financial institution, think about how you’d use the account as well as consider the benefits and drawbacks.

Pros

No recurring monthly fee.
Unlimited transactions, excluding some accounts.
Usually no minimum balance requirement.
May earn a competitive interest rate.
Potential to earn rewards or cash bonuses.

Cons

No branch banking for certain financial institutions.
Fewer accounts offer debit cards and ATM withdrawals.
May require you to have another bank account.
Limited included transactions.

Examples of bank accounts with no fees

Many Canadian banks offer chequing and savings accounts with low or no fees, but how they create the low-fee experience varies. Here are some examples of the terms, conditions and rules you’ll encounter when considering free bank accounts in Canada.

EQ Bank Savings Plus Account

EQ Bank is a digital bank. Its Savings Plus Account consistently features some of the highest interest rates in Canada, and it has no monthly fees or minimum balance requirement. Account holders enjoy unlimited free transactions, like bill payments, Interac e-transfers and transfers. It’s also one of the few banks in Canada that doesn’t charge a non-sufficient fund fee.

Customers can use their EQ Bank card to make free withdrawals from ATMs in Canada or transfer funds to their other bank that has ATMs. EQ Bank also has registered no-fee accounts like TFSA and RRSP bank accounts with the same benefits and high interest rates as its Savings Account Plus. It doesn’t offer a chequing account.

Motive Savvy Savings Account

The Motive Savvy Savings Account offers free unlimited deposits and withdrawals. Additionally, it allows free unlimited e-transfers, non-Exchange ATM withdrawals and other transactions, such as bill payments. The account offers tiered interest rates.

Tangerine No-Fee Daily Chequing Account

Tangerine has offered free online bank accounts for Canadians since 1997, when it launched as ING Direct. Among other products, it offers a range of no-fee bank accounts, including chequing, savings and registered accounts — helping you save money towards dedicated goals like a down payment or emergency fund.

Tangerine’s chequing account offers free unlimited transactions and free Interac e-transfers. And since there’s no minimum balance requirement, you can easily move more of your cash into savings or registered accounts like a TFSA or RRSP. Plus, Tangerine clients have access to more than 3,500 ATMs nationwide.

Scotiabank Ultimate Package Chequing Account

Scotiabank’s Ultimate Package Chequing account offers more features than the other accounts with monthly fees. It comes with free unlimited debits, Interac e-transfers, ATM withdrawals, 100 cheques per year, overdraft protection and international money transfers. Extra benefits include a free safety deposit box, 10 free equity trades at Scotia iTRADE and an ongoing annual fee waiver on select Scotiabank premium credit cards.

Unfortunately, like most other accounts, this too is only a no-fee bank account if you maintain a minimum balance of $6,000 at all times or keep a combined balance of $30,000 in your Ultimate Package account and MomentumPLUS Savings Account. If not, you’ll be charged $30.95 per month.

About the Authors

Siddhi Bagwe

Siddhi Bagwe is a content management specialist at NerdWallet Canada. Treating content marketing as an educational medium for readers, Siddhi believes in empowering them with the knowledge of personal finance…

Sandra MacGregor

Sandra MacGregor is a freelance writer who has been covering personal finance, investing and credit cards for over a decade. Her work has appeared in a variety of publications like…

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