The Complete Guide to Canadian Banking: Accounts, Fees, and How to Stop Paying Them

6 min read

Banking in Canada is more expensive than in most countries. Monthly account fees, transaction fees, ATM fees — they add up to $200–400 CAD per year if you're not paying attention. But every single one of these fees is avoidable once you understand the system.

This guide covers how Canadian banking works, which bank to choose, and how to bank for free or nearly free.

The Canadian banking landscape

The Big Six

Canada's banking sector is dominated by six major banks:

  • RBC (Royal Bank of Canada) — largest bank, most ATMs
  • TD (Toronto-Dominion) — excellent digital app, strong US presence
  • Scotiabank — best newcomer program (StartRight), international focus
  • BMO (Bank of Montreal) — strong in Quebec and Ontario
  • CIBC — large branch network, good student accounts
  • National Bank — strongest in Quebec

All Big Six banks are safe, regulated, and CDIC-insured (deposits up to $100,000 CAD guaranteed by the Canadian government).

Digital-first banks (no fees)

  • EQ Bank — 2.50%+ interest on savings, no monthly fees, no minimum balance. Best savings account in Canada for newcomers. No physical branches.
  • Tangerine (owned by Scotiabank) — no-fee chequing, competitive savings rates, online-only
  • Simplii Financial (owned by CIBC) — no-fee chequing with CIBC ATM access

Which bank to start with as a newcomer

Best newcomer program: Scotiabank StartRight

Scotiabank has the most developed program for people newly arriving in Canada:

  • No monthly fees for 12 months
  • Free international money transfers for 12 months (huge savings)
  • Credit card with no Canadian credit history required
  • Staff in many branches speak Spanish

How to apply: You can begin the application online before arriving in Canada. Bring your passport, immigration document, and Canadian address when you visit a branch to fully activate.

Best digital experience: TD Bank

If you're comfortable doing everything online, TD has the best app among the Big Six. No-fee accounts available for students and newcomers.

Best for Quebec: National Bank or Desjardins

If you're settling in Quebec, National Bank and Desjardins (a credit union) offer stronger French-language support and local network advantages.

Understanding account types

Chequing account (compte chèque)

Your everyday account. Where your paycheck lands, where you pay bills from, where your debit card draws from.

Things to know:

  • You get a debit card linked to this account
  • You get cheques (physical paper) — still used in Canada for rent and some bill payments
  • Interac e-Transfer lets you send money to anyone in Canada by email or phone number — instant, free with most accounts
  • NSF (Non-Sufficient Funds) fees — if you make a payment and don't have enough money, you're charged $40–48. Avoid this with overdraft protection.

Savings account (compte épargne)

Where you park money you don't need immediately. Pays interest (0.01–2.5% depending on the bank and account type).

For serious savings, use EQ Bank — their savings account consistently offers the best interest rates in Canada with no fees.

TFSA and RRSP accounts

Tax-advantaged accounts for long-term savings and investing. Once you've been in Canada 6+ months and have a stable income, talk to your bank about opening these.

The fees and how to avoid them

Monthly account fees

The Big Six typically charge $4–30 CAD/month for chequing accounts depending on the package.

How to avoid:

  • Scotiabank StartRight: free for 12 months
  • Maintain a minimum balance (usually $3,000–5,000 CAD keeps the fee waived)
  • Use Tangerine or Simplii Financial — permanently free
  • Students get free accounts at most banks — ask even if you're not currently enrolled

ATM fees

Using an ATM outside your bank's network costs $1.50–3.50 from your bank plus up to $3 from the ATM owner. That's up to $6 for one cash withdrawal.

How to avoid:

  • Know where your bank's ATMs are and use only those
  • Most Canadian payments are done by debit card or e-Transfer — you rarely need cash
  • Scotiabank and RBC have the most ATMs in Canada

International transfer fees

Sending money home through your Canadian bank's wire transfer service costs $15–25 per transfer plus a 2–5% exchange rate spread.

How to avoid: Use Wise. The fee is 0.4–1% of the amount transferred with the real mid-market rate. On a $1,000 transfer, you save $25–60 compared to using your bank.

Foreign transaction fees

Using your Canadian debit or credit card in another country or in a foreign currency online costs 2.5–3% per transaction.

How to avoid:

  • Use a no-foreign-transaction-fee credit card (Scotiabank Passport Visa, Rogers World Elite Mastercard)
  • Use Wise's multi-currency debit card for spending in foreign currencies

Overdraft fees

Going below $0 in your account triggers overdraft fees of $5–45 depending on the bank and protection plan.

How to avoid: Enable overdraft protection (usually $5/month). Keep a buffer of $200–500 in your chequing account as a personal rule.

Interac e-Transfer: how Canadians send money

This is how Canadians pay each other. Rent, splitting bills, paying a friend back — all done through e-Transfer. You need to understand this immediately.

How it works:

  1. Log into your bank app
  2. Go to "Send money" or "e-Transfer"
  3. Enter the recipient's email or phone number
  4. Enter the amount and an optional message
  5. Send — the recipient gets an email/text and accepts the money into their account

It's instant between most Canadian bank accounts (RBC, TD, Scotiabank, CIBC, BMO, etc.).

Security: never send an e-Transfer to someone you don't know. There's no buyer protection — once sent and accepted, the money is gone.

Autodeposit: register for autodeposit so money sent to your email deposits automatically without you needing to manually accept. Set this up immediately in your bank app.

Setting up your account: first week checklist

  • Open chequing account (Scotiabank StartRight or equivalent newcomer program)
  • Set up direct deposit with your employer (get a void cheque or direct deposit form from your bank)
  • Enable Interac e-Transfer autodeposit
  • Download your bank's app and register for online banking
  • Set up overdraft protection
  • Open a savings account (EQ Bank for highest interest, or your main bank for convenience)
  • Set up a Wise account for international transfers

Credit unions: the alternative nobody tells you about

Credit unions (like Desjardins in Quebec, Vancity in BC, or Meridian in Ontario) are member-owned financial cooperatives. They offer:

  • Lower fees than the Big Six
  • Better interest rates on savings and loans
  • More personalized service
  • Same CDIC-equivalent deposit protection (DICO or provincial equivalent)

The downside: smaller ATM networks and less developed apps than the major banks. For a newcomer, starting with a Big Six bank and then evaluating credit unions after 6–12 months is a reasonable approach.

Canadian banking rewards people who pay attention. The fees are real, but they're all avoidable with the right combination of accounts and habits. Get set up properly in your first week and the banking side of your Canadian life will require almost no ongoing attention.

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