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Bank Fees in Canada and How They Impact Your Wallet

D. Thode & Associates Inc., Licensed Insolvency Trustees can help keep your wallet from being empty due to unknown banking fees.

Canadians pay too much in bank fees every year, compared to other countries, according to a recent report. Understanding bank fees has become more than important as it can significantly impact your finances, especially those in debt or at risk of going into debt. Undesired and unmanaged bank fees can quickly add up. To be able to combat the debt, it is important first to understand how the bank charges fees and how it can contribute to debt accumulation. Here’s a general breakdown.

Monthly account Fees

In Canada, monthly account fees are very common. These fees are charged by banks for maintaining your account, ranging from $4 to $30, depending on the type of account you hold and with which bank. Your overall banking cost increases if you fail to pay the monthly account fees on time.  

Non-Sufficient Funds (NSF) Fees

When you make transactions that are more than your account balance, your transaction will be declined due to insufficient funds. Banks usually charge NSF fees, which can range from $25 to $50. NSF fees can quickly add up if you make multiple transactions with an insufficient account balance. 

Overdraft Fees

Overdraft fees are a kind of loan that the bank provides to cover your bills and other expenses when your account reaches zero. In combination with daily interest charges, overdraft fees can easily increase your debt amount.

ATM Withdrawal Fees

Whenever you withdraw money or make balance inquiries from an ATM (Automated Teller Machine) that your bank doesn't own or operate, the bank charges you an ATM withdrawal fee, which can vary from $2 to $5. In addition to the ATM operator fee, your own bank may charge an out-of-network fee for using a non-affiliated ATM. This fee is typically in the range of $1.50 to $3.00 per transaction. 

A man in a suit and sunglasses leaning against an ATM machine and wondering if he should contact D. Thode & Associates Inc., Licensed Insolvency Trustees, regarding his financial troubles.

The Impact of Bank Fees on Debt

The impact of bank fees on debt can be significant, especially for individuals already struggling with financial challenges. Not being able to pay bank fees on time can lead to debt accumulation due to additional charges imposed by the banks. 

For those individuals who are already in debt, paying excessive bank fees can reduce their available financial resources, which can increase financial stress and anxiety, eventually impacting their physical and mental well-being. All this highlights the importance of managing bank fees to avoid worsening debt situations and associated stress. 

How can you minimize bank fees?

Fortunately, there are some simple steps that you can take to minimize the impact of bank fees on your wallet.

Choose a fee-friendly account

Larger banks offering more services charge more. Opt for banks or financial institutions that offer accounts with low or no monthly fees, available to groups such as young people, students, and seniors. You can also opt for online banks with typically lower fees than brick-and-mortar branches.

Choose the right bank account

Many banks offer different types of accounts, each with its own fees and features. Choose an account that fits your spending habits and financial requirements.

Monitor your account activity closely

Most banks in Canada offer online banking and mobile apps to help customers monitor their activity in real time. Use this to keep an eye on your transactions and maintain a healthy balance to avoid NSF and overdraft fees.

Be mindful of ATM usage

Plan your withdrawals and minimize using ATMs outside your bank network.

Utilize Interac Services 

Interac e-transfer services provide a convenient and cost-effective way to transfer money electronically, which helps reduce bank fees. Such e-transfers are typically faster and cheaper than wire transfers or money orders.  

A wallet with money held by an individual who wants to get out of debt by calling D. Thode & Associates Inc., Licensed Insolvency Trustees.

Bottom Line When It Comes to Bank Fees and Your Finances

Understand that banks often have some wiggle room to waive or reduce your fees. If you have been a loyal customer don’t be afraid to call your bank and request that the fee be eliminated or reduced. If you’re struggling with debt contact D. Thode & Associates Inc., Licensed Insolvency Trustees, for your FREE debt consultation and we’ll help you understand your options. We want to help you become Debt Free!

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