Bank fees suck. We can all agree on that.
Paying a bank fee – whether per transaction or per a monthly flat rate – can leave us feeling as if our wallets have been gouged. Now, most of the big banks are hiking fees for customers once again, despite posting millions in profits.
What the Big Banks are Bringing in
For TD Bank customers, the charge for a non-TD bank ATM withdrawal is up 50 cents to $2.00 per transaction. TD has also introduced a new $75 dollar fee to transfer your TD Canada Trust TFSA to another institution – a process that used to be free. And perhaps the one that baffles me personally the most: it will now cost TD customers $5.00 to cancel an Interac transfer. Therefore, a transaction that is completed and cancelled online without the help of anyone will cost you $5.00.
As for the others, CIBC has upped its minimum balance to avoid fees from $1000 to $2000 and has upped its transaction cost by 25 per cent. RBC has not made any changes to its fees, but was forced to retract changes to its fee structure last year. This came about after customers were told they would be charged to make a mortgage payment, pay their credit card balance or make an investment contribution, even if the products were within the RBC brand.
So far, BMO hasn’t announced any major changes this year after upping their fees – including fees on student accounts – in 2015. Scotiabank has also not made any announcements about fee increases, but it continues to charge customers $14.95 for its momentum chequing account.
The Bank Act states that a bank has an obligation to publicly disclose when it increases a charge on a personal deposit account or when it introduces a new charge. To find out how this impacts you, visit your bank’s website.
The Price of Running One of the Big Five
Running one of Canada’s biggest banks is an extremely expensive endeavour, according to an expert within the industry. However, to put that into perspective, here’s a list of what the big five made in the previous quarter.
• RBC: profit of $2.5 billion
• TD bank: profit of $2.05 billion
• Scotiabank: profit of $1.5 billion
• BMO: profit of $973 million
• CIBC: profit of $941 million
With profits in such large amounts, customers are bound to feel like they are being taken advantage of – and rightfully so, especially when the same banks that report multi-million dollar profits raise fees in order to – in TD’s words – “remain competitive in today’s marketplace“.
What this Means for You
For years I have been fighting for Canadians to pay less bank fees. I want to extend an invitation to all customers of the big banks to do some research and then shop around and see if no-fee banking is right for you. With so many free banking options, there may not be justification – in my opinion – for why anyone should be paying a bank fee, even if it’s only $10 per month. Even though there are two sides to every story, I find it hurts the customer – especially when profits that banks make are taken into the entire equation.
Are you tired of paying these fees? Let us know in the comments, and click here to compare the best chequing accounts today!