Bank Withdrawal Fees: How to Avoid Them

Canadian banks charge fees in exchange for storing your money in an account, and allowing you to access or spend it in different ways.

Withdrawal fees are charges you may incur when you transfer money to certain accounts, make a debit purchase out of an account, or get cash from an ATM that’s outside of your banking network or in another country.

The more you know about why and when these fees are charged, the easier it will be to avoid them and keep that money in your chequing account.

» MORE: A guide to common bank account fees

How do withdrawal fees work?

There are three main types of withdrawal fees: regular account transaction fees, network access fees, and convenience fees. It’s possible that all of these (and others) will listed as withdrawal fees on your bank statement.

Transaction fees

You can be charged fee any time you make a transaction that results in money being withdrawn from your account, such as paying for something with your debt card, sending money via e-transfer or making an automatic bill payment. You may also pay a fee when withdrawing funds from an ATM. Banks often provide a certain number of “free” transactions each month, only charging a transaction fee if you exceed this number.

Network access fees

It’s common for banks to charge a fee when you withdraw money from an out-of-network ATM network or an ATM in another country (where you’ll also pay a currency conversion fee). A silver lining with withdrawal fees is that some banks now have ATM networks that extend across the globe, saving their customers withdrawal fees even in other countries.

Convenience fees

While rare, there are some instances in which a particular merchant may charge a fee to help cover the costs of processing your debit or credit transaction. This may also happen at certain independently-owned automated banking machines, or ABMs.

» MORE: How do online-only banks work in Canada?

How can you avoid withdrawal fees?

If you’re not keen to spend your hard-earned money on withdrawal fees, try these tips.

Choose an account with unlimited transactions. Though it will cost you a higher monthly fee than a basic account, certain banks offer no-fee chequing accounts with no limit on the number of transactions you can complete for free. If you complete a high number of transactions every month, or aren’t confident you can keep track, this is likely the best option for you.

» MORE: How to open a bank account

Avoid withdrawing money from ATMs outside your network. Some banks have global ATM networks that make it easy to avoid paying ATM fees when you take money out. For example, Scotiabank is part of the Global ATM Alliance, which gives its clients free access to over 44,000 ATMs in over 40 countries.

Use a credit card to avoid foreign debit transaction fees. You can really start getting in the weeds on fees when you use your debit card to make purchases when travelling. Every purchase in-store or online originating from another country adds a transaction fee, a conversion fee and the exchange rate, which can make things very expensive. If you have a credit card that waives or minimizes foreign transaction fees, use it instead of your debit card while traveling.

» See our picks: Best travel credit cards