Review of banking fees in Canada
Key findings
Taken together, the Review’s 22 findings highlight several themes that may warrant further policy consideration (see Table 1). Across the fee categories examined, the findings suggest that the cost of banking is shaped not only by the level of individual fees, but also by how fees interact, accumulate and are experienced by consumers over time. While a range of banking products and alternatives is available, consumers may not always have the information needed to understand the full cost of banking, compare options effectively, or determine whether their current products continue to meet their needs.
The Review identifies opportunities to strengthen transparency, improve comparability and reduce barriers that can make it difficult for consumers to act on better information. Its findings suggest that enhanced disclosure approaches, including more personalized and usage-based information, could help consumers better understand the fees they pay and support more informed decision-making. The findings also point to the potential benefits of measures that facilitate switching and strengthen competitive dynamics, including the implementation of consumer-driven banking.
As Canada’s financial marketplace continues to evolve, ongoing research and evidence-based policy development will remain important to understanding how banking fees affect consumers and how financial consumer protection frameworks can continue to support good outcomes. The Review’s findings provide a foundation for future policy discussions on transparency, comparability, switching and competition, and highlight the importance of continuing to assess whether consumers have the information and tools they need to make informed financial decisions.
Consistent with its mandate, FCAC will continue to monitor trends and emerging issues, contribute research and analysis to support evidence-based policy development, and assess how banking fees affect Canadian consumers. The Review’s findings will also inform FCAC’s consumer awareness and financial literacy initiatives, including the renewal of the National Financial Literacy Strategy, helping Canadians make informed financial decisions in an increasingly complex financial marketplace.
| Areas of focus | Key findings and implications |
|---|---|
| Account maintenance fees | 1. Misalignment between account features and usage can increase costs |
| 2. Fee waivers with a minimum daily balance can reduce banking costs, but may also involve hidden trade-offs | |
| Excess transaction fees | 3. It may be difficult for consumers to avoid paying excess transaction fees without a way to monitor transaction usage |
| 4. Legacy account plans may result in higher costs for common banking activities | |
| 5. Consumers using savings accounts for transactions often incur avoidable fees | |
| 6. Consumers continue to incur excess transaction fees | |
| ATM fees | 7. Consumers may not know the total cost of an ATM withdrawal before completing the transaction |
| 8. Stacking of ATM fees can increase the cost of withdrawing cash | |
| NSF fees | 9. Usage-based, personalized disclosure would improve transparency of NSF fees |
| Overdraft protection fees | 10. Usage-based, personalized disclosure would improve transparency of overdraft protection fees |
| 11. Overdraft protection can be a lower-cost alternative for consumers who experience dishonoured payments | |
| Currency conversion markup | 12. Currency conversion markups may not be fully transparent to consumers, limiting their ability to make informed decisions |
| 13. The choice of foreign exchange services provider can materially influence the total cost of currency conversions | |
| Cross-border debit fees | 14. Disclosure requirements related to cross-border debit fees do not support price transparency, limiting consumers’ ability to assess costs and choose the most appropriate form of payment |
| 15. The choice of provider can materially influence the total costs of cross-border debit fees | |
| Transfer-out fees | 16. Transfer‑out fees can discourage account switching and weaken competitive pressure |
| Prepaid payment products | 17. Fees can significantly reduce prepaid payment products’ balances over time |
| 18. How a prepaid payment product is used can significantly affect the total fees paid | |
| 19. Prepaid payment product fees may not be transparent, which may limit consumers' ability to make informed decisions | |
| Transparency | 20. Banks are required to disclose all applicable fees in account agreements and, for deposit accounts, they must also provide periodic statements and notify customers of changes to key terms, fees, or conditions |
| 21. Some banks provide customers with access to tools and information to help them monitor their accounts, track transactions and fees, and manage their finances. Building on these practices, disclosure approaches that reflect actual usage could provide a more complete and personalized view of the fees consumers incur. Usage-based information could also support comparisons across products and help consumers assess how well their account features align with their needs. | |
| 22. Consumer-driven banking has the potential to improve transparency, which can support informed decision‑making and facilitate switching by making it easier to compare alternatives |