Accounting For Bank Fees – Save Thousands By Switching To No Fee Banking

Accounting For Bank Fees – Save Thousands By Switching To No Fee Banking

When I was a little girl my mom took me to the bank to open up my first bank account. I had my very own bank card and slowly I started to see my account grow with money I earned from birthdays, babysitting, and monthly allowance. I became loyal to this bank, so loyal in fact that when I got a job as a teller at a competing bank that offered me staff discounts, I still held all my money at my childhood bank. And I know that I am not the only one who feels loyal to the bank they had since they were a kid. In fact when I worked as a bank teller our best and most promising customers were kids because we knew that they would become customers for life and we didn’t even have to lift a finger to get the business! Consider this cycle:


I was caught up in this very cycle. So imagine my horror when my husband proposed that we switch banks! My bank knew me, they knew my finances, and there were branches everywhere just in case both online and telephone banking were down, we couldn’t possibly switch banks and why would we, I was a happy and content customer.

We were spending $14.95/month or $179.40/year on bank fees alone, not including e-transfers, cheques, money orders, etc. Now this might seem minuscule in comparison to what some of your other living expenses cost you in a year but consider this:

The average person has to start paying bank fees once they are no longer a student (so say age 22). By the time we start paying bank fees until retirement (age 60) we will have spent $6,817.20 in bank fees alone!


60 (age of retirement) subtract 22 (age when you start paying bank fees) = 38 years

$179.40 yearly fee X 38 years = $6,817.2

Now once you turn 60 most big banks offer a discount for seniors. The bank we were with offered 25% off (starting at age 60). So let’s to do the math.

$14.95 with a 25% discount = $11.21/month

Between the ages of 60-81 (81 being the average life expectancy in Canada), we would have paid the following bank fees:

Account fee: $11.21 X 12 = $134.55/year

Total between the ages of 60 and 81 = $2,825.55

Total over life time ($6,817.20 + $2,825.55) = $9,642.75 per bank account!!!

Over our lifetime we will have spent nearly $10,000 in bank fees for just one person! But what really convinced me to make the switch was what this money could be turned into. Instead of this money working against us by having to pay monthly bank fees, we could use this money and make it work for us. For illustration purposes, let’s assume an annual rate of return on investments of 5% for a balanced investment portfolio. Using this assumption, we could turn our $6,817.20 into almost $20,000 by the time we turn 60 or almost $60,000 over our lifetime (see Chart).

Again, this is just for 1 bank account! Once I saw these numbers my loyalty went down the toilet. What was costing us thousands of dollars over our life time could be turned into thousands by doing 1 simple little thing…switching to on-line, no-fee, digital banking like Tangerine and PC Financial.

Not only did our new bank have zero bank fees, but we received a free $25 for opening the account plus an additional $75 for switching over our payroll to direct deposit…we literally got paid to join the bank. We were also given a free set of cheques and no longer had to pay for e-transfers.

The key to saving thousands when switching to no fee, online banking, is to not think of it as money you are saving and can now spend but think of it as money to put aside that goes towards your investments and savings. So here is your challenge. Look at how much you are spending on bank fees each month and calculate how much over your lifetime you are spending on fees and how much interest you may be losing out on. Check out the no fee options and see how much you could be saving. Perhaps like me, it’s time to reconsider where your bank loyalty lies.



  1. Tina deGroot
    May 8, 2017 / 8:00 pm

    Great article Olivia. Something I’ve never really thought about.

  2. morethanmoneysaving
    June 19, 2017 / 10:12 pm

    It look we have a lot of common interest and we share a lot of ideas 🙂

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