RBC Reverses New Bank Fees

RBC Bank Fees

Witness the power of consumer backlash: Royal Bank of Canada announced today that it is reversing some of the new banking fees they planned to launch June 1. The lender, which is the largest in Canada, will not be implementing a “pay to pay” fee structure, which would have classified all account payments – including those made on mortgages, credit cards and savings contributions – as debit transactions. As a result, customers who didn’t have unlimited debit transactions as part of their banking plans would be charged a fee to make one of their regular payments – on top of the interest they were already paying.

Consumers were incredulous at the new fee structure, which was widely regarded as nickel and diming and double dipping by the bank. In addition to their complaints, the fees were widely covered in the media, and even prompted the NDP to approach Ottawa with a mandate to ban “pay to pay” altogether.

The pressure has paid off. The bank states on their website, “We had recently announced some changes, including making RBC loan and mortgage payments count toward monthly limits for free debit transactions. But we’ve heard and understood your concerns with the changes.”

 However, the bank still plans to roll out other changes to their products, such as reducing their special rates for seniors and students. And they’re not the only lender to do so; each of the nation’s five largest banks announced earlier in May that changes were coming for everyday banking costs. While the changes differ from bank to bank, they will generally include:

  • Monthly and annual fee increases for everyday banking products like chequing and savings accounts
  • Reductions to bank account rebates for special groups (children, students and seniors)
  • Increased fees for excessive transactions or services outside of a banking plan, such as debit transaction overages
  • Increases to minimum balances required to waive fees

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A History of Discontent

Bank fees have long been a point of contention with consumers, and there’s plenty of stats to prove it. A Leger Marketing for PC Financial reveals 71 per cent of survey takers say fees are the biggest lender turnoff. The 2012 Canadian Retail Banking Customer Satisfaction Study found consumer sentiment has been dropping for years, with hidden fees as the main culprit.

Complacency Will Cost You

While consumers have a right to be frustrated by the banks’ widespread fee changes, there appears to be a silver lining – the incident seems to have shed fresh light on Canadians’ no-fee banking options – PC Financial and Tangerine, both of which offer no-fee chequing and savings, have been championed amid the big bank fallout.

Perhaps this will spark a movement among consumers willing to ditch their bank bias in search of more competitive features and interest rates – particularly as blind lender loyalty has been proven to cost the average banking customer between $759 to $1,617. The same study, put out by the Bank of Canada, also found that 67 per cent of Canadians took their mortgage out from the same bank as their chequing account – at an average premium of 66 basis points.

Would you switch to a bank with no-fee products? Tell us in a comment, or visit us on Facebook and Twitter.

Related Topics

Personal Finance / Personal Finance News / Savings / Savings News

6 thoughts on “RBC Reverses New Bank Fees

  1. I have switched to a credit union as my main banking institution.
    Free online banking ATM service through the exchange network
    including making ATM deposits through the exchange network
    participating members, free online transfers, bill payments etc.

    • I have been with my credit union for over 25 years. In the last
      6 years I have collected over 400. in dividends from them because members are OWNERS of the credit union. And by the way those dividends were paid solely on the 25.00 I paid to become a part owner in the credit union.All my financial dealings are through the credit union. Their ethic stands on environment and social issues instead of on outrageous profits and obscene salaries for the top people fit with my own personal beliefs and ethics. I would never consider using a bank ever again especially after the world economic collapse of 2008 caused by banks, stock markets etc.

  2. I would definetely swich my account from the RBC if they had not pulled the changes. I may still, Tangerine is looking pretty good.

  3. I am an example of switching over to a the no-fee option internet based banking (Tangerine). Just today, I read an article the big 5’s profits in Q2 amounted to $8 Billion. Not too long ago, they were making $1B per YEAR, each; arguably a significant increase in profit. I’m all for capitalism but when it comes to nickel and diming to squeeze the extra dollar from the average Joe, I feel compelled to speak with my wallet. Goodbye “TD”. (insert your bank name here)

  4. I have been with PC Financial and have not pay a dime for anything… Why should i pay any fee when they use my money to lend out and charge outrageous interest rates.

  5. I am going to close my bank account and withdraw my RSSP FROM RBC as they charge me Passbook fee where there was no passbook, contacted the manager at the branch and Head office, but they will not refund. I was loyal customers for RBC since 1996 and my account was opened then by.I do my banking on line and they are still sitting on Passbook charging their customers Passbook fee.

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