Avoid Bank Fees: How to Dodge Overdraft and ATM Charges

You likely know when your paycheck arrives and how much your monthly cellphone bill is, but many people don’t track a basic cost: how much they pay in bank fees. Banks offer a wide range of chequing accounts with different privileges, fee structures and transaction limits. Choosing the right account and understanding how you use it can significantly reduce the fees you pay.

MoneySense is an award-winning personal finance source helping Canadians since 1999. Our editorial team works with experienced finance experts to compare financial products and help readers find accounts that fit their needs. We review offerings from banks, credit unions and card issuers to provide clear guidance about value and features.

How much are bank fees in Canada?

Bank fees can add up quickly, often without being obvious. Everyday transactions such as e‑transfers, out‑of‑network ATM withdrawals and foreign purchases can carry fees ranging from a dollar or two to considerably more. For example, using another bank’s ATM may cost $1 to $5 for non‑customers at major banks, while your own bank may charge $2 to $3 to use another institution’s ATM.

A 2024 report from Alberta-based consultancy North Economics estimated Canadians may be overpaying more than $7.7 billion a year in bank fees, comparing common charges here with consumer experiences in the U.K. and Australia. At the same time, the Canadian Bankers Association emphasizes that Canada’s banking system offers choice and a wide range of account packages—so the right account can provide strong value if you match it to your needs.

Common fees that can go unnoticed

Some of the most surprising or hidden charges include:

• Foreign transaction and currency conversion fees: When you buy from an international website or use your card abroad, you may pay a foreign transaction fee plus an additional currency conversion fee. These charges often only become apparent when you review the final statement amount.
• ATM and out‑of‑network withdrawal fees: Using another bank’s ATM can trigger fees both from the ATM owner and sometimes from your own bank.
• Transaction overage fees: Many chequing accounts include a monthly limit on free transactions. Exceeding that limit — frequent debit purchases, e‑transfers or in-branch transactions — may result in extra per‑transaction charges.
• Non‑sufficient funds (NSF) and overdraft fees: These can be steep; NSF fees in Canada can run as high as $50 for a returned payment.
• Business account transfer fees: Payments sent to business accounts, or transfers routed through different payment rails, may carry additional charges that aren’t always obvious to the sender.

These charges add up when you aren’t tracking your actual usage against the terms of your account.

How to find the best deal and reduce bank fees

Take time once a year to review your account activity and compare options. Tracking your spending patterns — how often you use your debit card, withdraw from other banks’ ATMs, write cheques or visit branches — will help you select a chequing account that aligns with your habits and minimizes fees.

Some practical steps to lower fees:

• Compare chequing accounts based on the number of free transactions, monthly fees and ATM policies rather than just the advertised name of the account.
• Negotiate with your bank. If you hold multiple products (mortgage, credit card, RRSP, line of credit), banks may waive or reduce fees for loyal customers.
• Maintain required minimum balances. Many institutions, including some major banks, will waive monthly fees if you keep a qualifying balance—Scotiabank, for example, waives certain account fees if a customer maintains a daily closing balance of $6,000 for the entire month.
• Ask about specific charges. If you see a fee on your statement you don’t recognize, call your bank and request a clear explanation. Often charges can be corrected or clarified once you understand their source.
• Use no‑fee or low‑fee digital banks and accounts when their features match your needs.

Reviewing accounts regularly and matching one to your transaction profile is the most effective way to keep bank fees under control.

Read more about banking:

• Wealthsimple Cash review 2024
• HISAs vs. bonds and GICs: Where should Canadians hold their cash?
• Why are credit card interest rates so high in Canada?
• Best no‑fee credit cards in Canada