Banking in Canada: Stop Overpaying for Your Bank Account

Canada has banks, credit unions, and digital-first providers. Their account fees, services, deposit protection, and access differ, so compare the institution and the specific account before choosing.

The Big 5 Banks

The five largest Canadian banks are:

• Royal Bank of Canada (RBC)
• Toronto-Dominion Bank (TD)
• Bank of Nova Scotia (Scotiabank)
• Bank of Montreal (BMO)
• Canadian Imperial Bank of Commerce (CIBC)

These banks offer many financial products and have extensive branch and ATM networks. Their account pricing and interest rates depend on the product and can change; compare the current terms with those at other institutions.

National Bank & Desjardins

National Bank of Canada is sometimes called the "sixth big bank." It's headquartered in Montreal and has a strong presence in Quebec. Desjardins Group is Canada's largest federation of credit unions, also based in Quebec, and operates similarly to a major bank while maintaining a cooperative ownership structure.

Credit Unions

Credit unions are member-owned financial cooperatives. Their products, service channels, and fees vary by institution. Examples include Vancity (B.C.), Meridian (Ontario), Servus (Alberta), and Conexus (Saskatchewan).

ATM access and deposit protection depend on the institution and its regulator. Check which deposit insurer covers your deposits and the current coverage limits; some credit unions operate under federal CDIC coverage, while others are covered by provincial or territorial systems.

Online Banks

Digital-first institutions may offer accounts without monthly fees or with competitive savings rates. Check the current account terms, available support, cash access, and deposit protection rather than assuming every provider offers the same features.

• EQ Bank — A digital bank brand of Equitable Bank; check current account rates, fees, and access features
• Tangerine — A Scotiabank subsidiary; check current account terms and ATM access
• Simplii Financial — A CIBC direct-banking brand; check current account terms and ATM access
• Wealthsimple — Offers spending and savings products; check the account structure and deposit protection for each product
• Neo Financial — Offers financial products through its current partners; check the product terms and deposit protection

Tangerine — No-Fee Online Banking

Use Orange Key 54935385S1 when opening an account. Under Tangerine’s current referral terms, an eligible new client may receive $50 after opening an eligible account, depositing at least $250 within 60 days, and maintaining that minimum balance for 60 consecutive days. Check current terms and whether another offer can be combined with an Orange Key.

Check Out Tangerine →

Not all bank accounts serve the same purpose. Here's what's available and when each one makes sense.

Chequing Accounts

A chequing account is commonly used to receive income and pay bills or make debit purchases. Transaction limits, included transfers, card access, and interest depend on the account.

Chequing fees, included transactions, minimum balances, and e-Transfer terms depend on the account and can change. Compare the current fee schedule with the features you use. Some online accounts have no monthly fee, but check transaction limits, ATM access, and eligibility before switching.

Savings Accounts

Designed for money you're setting aside. Savings accounts pay interest on your balance, and some accounts limit transactions or require notice for withdrawals. Rates and conditions change, so compare the current rate on the exact account you would open, including any promotional period, balance cap, and withdrawal limits.

High-Interest Savings Accounts (HISAs)

A HISA is a savings account that pays interest. Compare its current rate, fees, withdrawal terms, and deposit protection with other suitable places to hold cash.

GICs (Guaranteed Investment Certificates)

A GIC pays according to the rate and term in its contract. Access and renewal options vary; many GICs cannot be redeemed early without a penalty. Eligible deposits at CDIC member institutions or covered credit unions may qualify for deposit insurance, subject to coverage rules and limits.

Joint Accounts

A joint account is shared between two or more people — common for couples, roommates splitting rent, or parents and young adults. Both account holders have full access to the funds. Important to know: in a joint account, each person is equally liable for any overdraft or debt on the account.

Each type of financial institution has strengths and trade-offs. Here's how they stack up on the things that matter most.

Monthly account fees add up over time. At participating federally regulated institutions, all Canadians can access a low-cost account for no more than $4 per month, with at least 18 monthly debit transactions; eligible groups may qualify for the same features at no monthly fee. Check your statement for account, transaction, ATM, and e-Transfer charges, then compare them with the features you use.

Why You're Paying Fees

Account packages bundle different transaction limits and services, and some waive fees when you meet eligibility or balance conditions. Compare the features you use and the current fees instead of choosing by brand alone.

How to Get Free Banking

1. 1Compare no-monthly-fee accounts, including online options. Check transaction limits, ATM access, e-Transfer terms, eligibility, and other fees in the current agreement.
2. 2Ask about a fee waiver — Some accounts waive the monthly fee when you meet a minimum-balance or bundled-product condition. Compare the current minimum with the interest you could earn by keeping that money in a suitable savings account.
3. 3Check eligibility — students, youth, newcomers, and some benefit recipients may qualify for no-cost accounts. Review each institution’s current requirements.
4. 4Check your credit card bundle — Some premium credit cards include a chequing account fee waiver as a perk. If you already have the card, you might be eligible.
5. 5Negotiate — Call your bank and ask. Retention departments often have unadvertised deals. The worst they can say is no.

Hidden Fees to Watch For

• Non-network ATM fees — The ATM owner and your financial institution may each charge a fee.
• e-Transfer fees — Some account plans charge for sending Interac e-Transfers; others include them.
• Paper statement fees — Some institutions charge for mailed statements.
• NSF fees — For personal deposit accounts at federally regulated banks and federal credit unions, the fee is capped at $10, can be charged only once per account within two business days, and cannot apply to an overdraft under $10.
• Overdraft costs — Check the per-transaction fee, interest rate, and whether overdraft coverage is optional.
• Foreign currency conversion — Check the card or account disclosure for exchange-rate markups and other conversion fees.
• Dormant account fees — Some banks charge if your account is inactive for 12+ months

A HISA can suit an emergency fund or another short-term goal when you want accessible cash. Compare the ongoing rate, promotional period, withdrawal terms, and applicable deposit protection with other suitable options.

Why HISAs Matter

Compare accounts using their current rates. As a quick rule, each 1 percentage point of annual interest is about $100 per year for every $10,000 kept in the account, before tax and assuming the rate stays unchanged. Promotional rates, variable rates, balance limits, and withdrawal terms can change the result.

Where to Find the Best HISA Rates

• EQ Bank — Compare its current everyday savings rate, eligible products, and deposit-insurance details.
• Tangerine — Check whether a current promotional rate applies to your deposits and when it ends; the ongoing rate can be different.
• Simplii Financial — Compare its current rate and promotional terms. Uses CIBC ATMs.
• Wealthsimple — Review the current cash-account rate, eligibility conditions, and account terms.
• Neo Financial — Confirm the current rate and which CDIC member institution holds eligible deposits.
• Oaken Financial — Operated by Home Bank, a CDIC member. Compare current HISA and GIC terms.
• Motive Financial — A division of Canadian Western Bank, a CDIC member. Check current account and rate details.

HISA Inside a TFSA

You can hold a HISA inside your TFSA, which means the interest you earn is completely tax-free. If you have TFSA contribution room and you're using a HISA for savings, put the HISA inside your TFSA first. There's no reason to pay tax on interest if you don't have to.

A Guaranteed Investment Certificate (GIC) is one of the safest places to put your money. You deposit a fixed amount for a set term, and the bank guarantees both your principal and a specific interest rate. When the term ends, you get your money back plus the interest earned.

How GICs Work

• You choose from the terms currently offered by the institution
• The bank locks in an interest rate for that term — it won't change regardless of what happens to market rates
• Eligible deposits may be insured by CDIC or a provincial or territorial deposit insurer, subject to the applicable limits and rules
• At maturity, you receive your deposit plus accumulated interest
• Many GICs cannot be redeemed early without a penalty; check the specific contract

GIC vs. HISA: When to Use Which

The GIC Laddering Strategy

GIC laddering means splitting your money across multiple GIC terms so that a portion matures regularly. Instead of locking $10,000 into a single 3-year GIC, you'd split it into three GICs: $3,333 in a 1-year, $3,333 in a 2-year, and $3,334 in a 3-year.

Each year, one GIC matures. You can either use the money or reinvest it into a new 3-year GIC. This gives you regular access to a portion of your funds while still locking in longer-term rates.

Switching banks can take time. Before closing an account, move direct deposits and automatic payments, keep enough funds available during the changeover, and confirm that outstanding payments have cleared.

1. 1Open your new account first — Ask what identification and information the institution requires. A SIN may be requested for tax reporting on interest-bearing accounts; it is not a general-purpose ID. Check initial deposit and funding requirements.
2. 2List everything connected to your old account — Go through 3 months of statements and write down every pre-authorized payment (rent, utilities, subscriptions, insurance, loan payments), every direct deposit (employer payroll, government payments like Canada Groceries and Essentials Benefit (CGEB)), and any linked services.
3. 3Move your direct deposits — Update your payroll with your new bank's transit, institution, and account numbers. Also update any government deposits (CRA direct deposit, provincial benefits).
4. 4Move your pre-authorized payments — Contact each biller and update your banking info. Start with the most important ones: rent/mortgage, utilities, phone, insurance, loan payments. Then handle subscriptions.
5. 5Keep both accounts open during the transition — Review statements and payment schedules, and keep enough funds in the old account for any remaining automatic withdrawals.
6. 6Close the old account — Once you're confident everything has moved over, go in-branch (or call) to close the old account. Get written confirmation. If there's a remaining balance, transfer it to your new account.

Common Switching Mistakes

• Closing the old account too soon — A missed pre-authorized payment can result in NSF fees and potentially affect your credit if it's a loan payment.
• Forgetting annual payments — Insurance, professional dues, or subscriptions billed once a year are easy to miss when reviewing monthly statements.
• Not updating your CRA direct deposit — If you don't update it, your tax refund or benefit payments go to a closed account.
• Ignoring linked credit cards — If your credit card is set to auto-pay from the old account, update that too.

The Canada Deposit Insurance Corporation (CDIC) is a federal Crown corporation that protects your eligible deposits if a member bank fails. It's funded by premiums paid by member institutions — not by taxpayers.

What's Covered

CDIC insures eligible deposits up to $100,000 per depositor, per member institution, per coverage category. Eligible deposits include:

• Savings accounts and chequing accounts
• GICs and other eligible term deposits
• Money orders and bank drafts issued by CDIC member institutions
• Cheques certified by CDIC member institutions

Coverage Categories

CDIC coverage is calculated separately for each category, meaning you can actually be insured for well over $100,000 at a single institution. The separate categories are:

1. 1Deposits in your name (personal accounts)
2. 2Joint deposits (shared accounts)
3. 3TFSA deposits
4. 4RRSP deposits
5. 5RRIF deposits
6. 6RESP deposits
7. 7RDSP deposits
8. 8FHSA deposits
9. 9Trust deposits (each beneficiary up to $100,000)

For example, at a single CDIC member institution you could have $100,000 insured in your personal savings, $100,000 in your TFSA, $100,000 in your RRSP, and $100,000 in a joint account — that's $400,000 of coverage at one bank.

What's NOT Covered

• Stocks, bonds, mutual funds, and ETFs (even if purchased through your bank)
• Cryptocurrency
• Deposits payable outside Canada
• Deposits at institutions that are not CDIC members; coverage may be available through a provincial or territorial deposit insurer instead