Services, access, fees - how do you choose the right bank account?
What You Need to Know:
- There is a lot of choice: there are more than 100 consumer bank account options to choose from, offered by more than 20 banks in Canada.
- Comparing accounts is easy using a simple, free online tool at www.canada.ca/fcac.
- There are low-fee and no-fee accounts available.
- All you need to open a bank account is the proper identification.
The Types of Bank Accounts Available
There are many different types of accounts available with a wide range of services, including:
- basic chequing and savings accounts
- full-service accounts with many types of transactions included
- low-fee or no-fee accounts
- youth, student and seniors’ accounts
How do you know which account is right for you? Choosing the right account depends on the services you need and want.
Opening an Account
Anyone can open a bank account provided you have the proper identification. It’s important to understand that you can open a bank account even if:
- you don’t have a job
- you don’t have money to put in the account right away
- you have been bankrupt
Identification Needed to Open an Account
Generally, you will need two documents that confirm your identity to open a bank account. There are many different options that can be used and a full list is available on the Canadian Bankers Association website.
It’s also possible to present only one piece of identification if your identity can be confirmed by a client in good standing with the bank or by an individual of good standing in the community where the bank is located.
How to Shop for an Account
There are a lot of account options to choose from - more than 100! - so it’s important to think about the services you need and to shop around for the best account to meet your needs. And it’s easy to compare the banking packages available using the online interactive Account Comparison Tool available from the federal financial consumer protection regulator, the Financial Consumer Agency of Canada (FCAC).
Choosing the right bank account can save you money.
For example, there are accounts that:
- allow a certain number of transactions for a lower fee than some unlimited transaction accounts
- waive fees if you keep a minimum monthly balance in the account (usually between $1,500 and $5,000)
There are banking packages that include more services for a flat monthly fee or a fee per transaction, including:
- certified cheques, money orders, overdraft protection, email money transfers or cheque returns
- U.S. dollar and other foreign currency accounts and cross-border debits
- multiple accounts (both chequing and savings) under the same monthly fee
More About Low-Fee and No-Fee Accounts
Banks in Canada are committed to ensuring that all Canadians can have a bank account.
Canada’s banks provide low-fee accounts that include:
- at least 12 debit transactions per month, including at least two in-branch transactions
- cheque-writing privileges
- no extra charge for deposits, debit cards, pre-authorized payments forms and monthly printed statements
- cheque image return or online cheque image viewing
Youth, students, seniors qualifying for the Guaranteed Income Supplement (GIS) and beneficiaries of a Registered Disability Savings Plan (RDSP) are eligible for these accounts at no cost.
Accounts for Seniors
There are many bank account packages designed specifically for seniors. If you are a senior now, or getting close, you may wish to compare the packages for seniors to find out if there is one that meets your needs.
There are both low-fee and no-fee accounts available for seniors. These accounts offer regular transactions such as withdrawals, deposits, transfers, bill payments and cheque-writing privileges. Some seniors’ accounts may include more specialized services such as no-fee money orders, certified cheques, and a discount on safety deposit box rentals. Guaranteed Income Supplement beneficiaries are also eligible to have the fees waived for the low-fee account.
Accounts for Youth and Students
Most banks offer low-fee or no-fee bank account packages for youth and students and you can compare those accounts using the FCAC’s online, interactive Account Comparison Tool at www.canada.ca/fcac.
Ways to Reduce Your Service Fees
Did you know that there are many different ways to reduce the bank service fees that you pay?
Ten tips for reducing your service fees.
- Shop around for the bank account package that best meets your needs. You may be paying more for services that you don’t use. Use the FCAC’s online Account Comparison Tool.
- Maintain a minimum balance in your account. Ask your bank if it offers this option.
- If you have additional products with your bank (for example, a mortgage or credit card), ask if you can get a discount on service fees.
- Ask for a senior’s discount or a no-fee account (if you qualify)
- Ask for youth or student discount or a no-fee account (if you qualify)
- Plan your withdrawals – If your account package has a limited number of withdrawals, make fewer but larger withdrawals to save on fees.
- Take advantage of cash back – Did you know that many retailers offer cash back options at no additional charge when you pay with your debit card? Pay for your purchases and get cash from the retailer to avoid extra bank transactions.
- Avoid convenience fees – Use only your own institution’s bank machines. You’ll save on fees charged by other financial institutions or independent cash machine owners to use their machines.
- Consider a low-fee account if you only have a few transactions each month. Use the Account Comparison Tool on the Financial Consumer Agency of Canada website to see if one of these accounts might meet your needs.
- Consider overdraft protection – Do you frequently have NSF (non-sufficient funds) charges? If so, you might want to consider applying for overdraft protection. The small monthly fee might turn out to be less than you are paying in NSF charges. And some financial institutions levy the overdraft charge only in months when you actually use the overdraft, so there could be additional savings. Ask your bank or shop around to find an arrangement that works for you.
Cashing a Government Cheque Without an Account
You can cash a federal government cheque of up to $1,500 at a bank even if you don’t have an account as long as you can provide either an acceptable piece of identification with your photo and signature on it or two acceptable pieces of identification that confirm your identity – see the list of acceptable identification on the CBA website.
The banks also have agreements with the governments of British Columbia, Alberta, Quebec, and New Brunswick that allow non-customers to cash provincial government cheques as long as you have the appropriate identification.