Context

Regulatory landscape: Dealings with customers and the public

This chapter sets out the regulatory framework governing banks’ dealings with their customers and with the public,^{Footnote 1}  including requirements related to responsible business conduct, disclosure, and the complaints process. It also briefly describes the regulatory frameworks that apply to other financial service providers, such as provincially regulated credit unions, fintechs, and payment service providers, which differ from those that apply to banks.

Responsible business conduct

Part XII.2 of the Bank Act and the Financial Consumer Protection Framework Regulations establish consumer protection obligations when banks, other than companies incorporated under the Trust and Loan Companies Act, offer or provide products and services to consumers. Companies incorporated under the Trust and Loan Companies Act are subject to similar consumer protection requirements in some areas. However, not every rule that applies to banks also applies to trust and loan companies. In this Review, where a reference to a requirement under the Bank Act is noted, an equivalent requirement applies to companies incorporated under the Trust and Loan Companies Act, unless specified otherwise. These obligations support responsible business conduct, fair and equitable dealings, clear disclosure, and informed decision-making by consumers. For example, banks must:^{Footnote 2}

• not impose undue pressure, coerce a person, take advantage of a person, or engage in misleading practices
• not communicate or otherwise provide false or misleading information to consumers, the public, or the Commissioner of FCAC
• have policies and procedures to help ensure that products and services are appropriate for customers’ needs
• ensure that compensation and incentives for officers and employees do not interfere with their ability to follow policies and procedures when offering or selling appropriate products or services
• ensure that the officers, employees, and agents involved in offering or selling products or services receive training on policies and procedures for complying with consumer-protection obligations

Before providing a product or service, banks must:^{Footnote 3}

• obtain the consumer’s express consent (the use of a product or service does not, by itself, constitute consent)
• enter into an agreement with the consumer
• provide the consumer with a copy of the agreement, if the product or service is provided on an ongoing basis

The Bank Act also provides cancellation rights for certain agreements for products or services, allowing consumers to cancel within a specified period, in some cases.

Disclosure for informed decisions

The Bank Act establishes disclosure obligations for retail banking products and services, to support transparency and informed consumer decision-making. Clear and standardized disclosure of key information also supports effective comparisons across products and services.

Before entering into certain agreements, banks must disclose key information about the product or service, which may include applicable fees or charges, penalties, interest, cost of borrowing, features, and other terms and conditions. Disclosures must be clear, simple, and not misleading.

For certain products or services, banks must provide the customer with periodic statements or ongoing information updates, and must notify customers of certain changes, such as changes to applicable fees or charges, interest rates, or other terms and conditions.

For personal deposit accounts, banks must send the customer an electronic alert when the customer’s account balance falls below $100, or below a threshold set by the customer. The alert must also indicate what the person may do to avoid fees, charges or penalties, and the time within which action must be taken.

Complaints process

Banks are required to provide consumers with an effective and timely complaint-handling process. They must deal with customer complaints within 56 days after the day on which the complaint is received.

If a complaint is not resolved to the consumer's satisfaction, or if the 56-day timeline is exceeded, consumers may escalate the matter to the Ombudsman for Banking Services and Investments (OBSI), the independent external complaints body for banking. OBSI reviews banking-related disputes and may make non-binding recommendations to resolve them.

Trust and loan companies and insurance companies must also have complaint-handling procedures. FCAC expects those procedures to be fair, accessible, and timely, although the requirements for these entities are generally less detailed than those that apply to banks.

Codes of conduct and public commitments

FCAC monitors banks’ adherence to codes of conduct and public commitments, for example:

• the Commitment on Low-Cost and No-Cost Accounts
• the Code of Conduct for the Delivery of Banking Services to Seniors

Codes of conduct and public commitments complement legislation by setting out additional commitments or standards that are intended to protect the rights and interests of financial consumers in specific areas.

Other financial services providers

Consumers can also obtain financial services from providers other than banks, such as provincially regulated credit unions, fintechs and payment service providers. These providers are not subject to the consumer protection framework in the Bank Act described above. The requirements that apply depend on the type of provider and the services they offer and where those services are provided. 

Credit unions and caisses populaires: Credit unions and caisses populaires are regulated by the province or territory in which they operate and are subject to comprehensive requirements related to business conduct, disclosure, and complaints handling. Their deposits are covered by the applicable deposit insurance regime in the province or territory in which they operate.

Fintechs and payment service providers: Fintechs and payment service providers do not fall within a single regulatory framework. The requirements that apply depend on the type of provider and the services they offer and where those services are provided. They are subject to the general consumer protection requirements in the province or territory in which they operate, however.

Payment service providers that perform retail payment activities may be subject to the Retail Payment Activities Act (RPAA). Payment service providers that hold end-user funds must protect and segregate those funds to ensure reliable, unhindered access in the event of provider insolvency. That said, the RPAA is not a comprehensive financial consumer protection framework, and registration as a payment service provider does not provide the same consumer protections that apply to banks under the federal Financial Consumer Protection Framework.

Fintechs and payment service providers are not members of the Canada Deposit Insurance Corporation (CDIC). CDIC deposit protection may apply to eligible deposits managed by fintechs, depending on how and where the funds are kept.

Market dynamics

For most consumers, a deposit account serves as the primary entry point into the banking system, and as the central hub for managing day-to-day finances. Deposit accounts also play a larger role in establishing and maintaining broader banking relationships, often serving as the anchor product through which consumers access additional services over time, including credit cards, loans, and mortgages.

For these reasons, this chapter examines the dynamics of the market in which these products are offered, as these dynamics have direct effects on fees.

Background

In Canada, deposit accounts are offered by regulated deposit-taking institutions:

Banks, including federal credit unions and foreign bank branches, are federally regulated under the Bank Act. They offer a broad range of retail and commercial financial services, including deposit accounts, lending, and payment services. Examples include Canada’s 6 largest banks—Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), National Bank of Canada, Royal Bank of Canada (RBC), Scotiabank, and Toronto-Dominion Bank (TD)—collectively known as the “Big Six”; small and medium-sized banks such as Fairstone Bank; federal credit unions such as Coast Capital Savings; and digital banks such as EQ Bank and Alterna Bank.

Trust and loan companies are regulated under the Trust and Loan Companies Act or similar provincial legislation. They accept deposits and make loans, and may offer services similar to those of banks, sometimes with more specialized functions. Examples include Peoples Trust Company, Peace Hills Trust and Community Trust.

Provincially regulated deposit-taking institutions, primarily credit unions and caisses populaires, operate under provincial legislation on a cooperative, member-owned basis. They accept deposits and provide lending and payment services. Examples include Desjardins, Vancity, and Meridian.

Fintechs such as Wealthsimple, KOHO, and Neo Financial operate through online and mobile platforms and are introducing new service models and delivery channels, forming part of the broader competitive landscape. However, since most fintechs are not regulated deposit-taking institutions, they generally cannot hold deposits directly and instead partner with regulated institutions that hold customer deposits on their behalf.

Despite this diversity, Canada’s Big Six hold a dominant position in Canadian retail banking. In 2023, the Competition Bureau reported that Canada's financial services markets are concentrated, and the largest banks account for the majority of financial services provided to Canadians.

Competitive dynamics: Deposit accounts

Effective competition can encourage firms to offer lower prices, better service quality, greater choice, and more innovative products. When consumers can easily switch to a new provider, firms offer better services at lower prices to win or keep customers. This is the essence of competition.

In practice, however, Ipsos data^{Footnote 4}  indicate that switching rates for primary chequing accounts remain relatively low, and over half of Canadians have been with their primary financial institution for 15 years or more. Furthermore, a 2024 survey from Abacus Data^{Footnote 5}  indicates that two-thirds of Canadians had no intention of considering switching financial providers in the next two years.

Consumers seeking to switch financial service providers may encounter a range of practical barriers. Uncertainty about the time and effort required to initiate and complete a switch may discourage action. Consumers may also have concerns about potential payment disruptions, including the need to update direct deposits, bill payments, and pre-authorized transactions—often requiring coordination across several providers (see Annex 1: Switching costs and competition in banking).

According to Ipsos data, among consumers who switched providers in 2025, the main motivations were lower fees, promotional offers, and improved rewards or benefits. Lower fees were especially significant for consumers who switched to providers outside the Big Six, accounting for over half of such decisions.

Relationship-based pricing

A consumer’s relationship with their bank often extends beyond a single deposit account. Ipsos survey evidence indicates that more than half of Big Six customers hold multiple products with their primary financial service provider—typically a chequing or savings account paired with an investment product, loan, or credit card.

Banks commonly link fee levels and discounts to the breadth of a customer’s relationship with the bank—this is known as relationship-based pricing. Common examples include:

• waiving account maintenance fees for customers who maintain a minimum daily balance or hold qualifying products
• waiving credit card fees for eligible chequing account holders
• offering preferential rates on loans or mortgages to customers who maintain broader banking relationships

Relationship-based pricing can offer convenience and may appear to lower costs by rewarding consumers who hold multiple products with the same provider. However, tying discounts to a broader product relationship can make it harder for consumers to identify the true price of each individual product and to compare those prices with standalone alternatives.

As a result, consumers may find it difficult to judge whether the combined cost of several linked products is genuinely better value than purchasing similar products separately from different providers.

Relationship-based pricing may also create a barrier to switching, because consumers may lose discounts if they move one product to another provider, or may need to transfer several products at once to obtain a comparable lower-cost offer elsewhere.

Preference for in-person banking

Canadian consumers have increasingly adopted mobile and online channels for day-to-day banking. However, branch access continues to play a role for many consumers. According to Ipsos data, access to physical banking locations remains an important consideration for some consumers when selecting their primary financial service provider.

Digital-only banks and fintechs may offer advantages in pricing or user experience, but they often lack in-person service and support. For consumers who value access to these services, switching may be less appealing or more difficult.

Way forward

High market concentration, the prevalence of relationship-based pricing, and low switching rates may collectively limit the ability of smaller providers and new entrants to Canada’s banking system to attract customers and expand their market presence. Similar concerns were identified in the United Kingdom (UK). In response, the UK implemented a series of banking and competition reforms designed to increase consumer mobility, reduce barriers to entry, and improve transparency (see Annex 2: UK regulatory history).

Alternative providers may offer lower fees and innovative products, but switching frictions can constrain the extent to which consumers take advantage of these options and, in turn, the competitive pressure these providers exert on the market.

Measures to improve product comparability and make it easier for consumers to switch financial service providers could help strengthen competition.

Disclosure approaches that reflect actual usage can provide a more complete view of the fees incurred by consumers. Disclosure tools that incorporate usage‑based information may also support comparisons across products and assist consumers in assessing how account features align with their needs.

Canada’s emerging consumer-driven banking framework represents an opportunity to strengthen competition (see the “consumer-driven banking box” below). By facilitating data portability, consumer-driven banking has the potential to reduce switching frictions, improve price and product comparability, and support greater product innovation.

The federal government has recognized that persistent switching frictions continue to limit adoption of alternative financial service providers and constrain the benefits of competition.

Taxonomy of retail bank fees

Deposit accounts

The account-related fees that are analyzed in this study include those associated with deposit accounts and registered products.^{Footnote 6}

According to the Bank of Canada, 99% of Canadians own a debit card linked to a deposit account. These accounts generally fall into 2 main categories: chequing accounts and savings accounts.

Chequing accounts are designed for everyday financial transactions, providing consumers with immediate access to funds. They include features like debit purchases, bill payments, electronic transfers, and cheque writing privileges. Chequing accounts generally do not earn interest.

In Canada, chequing accounts offer a range of services that are grouped into an account plan. These plans generally include either a set number or unlimited use of core transactions, such as debit purchases, bill payments, Interac e-transfers, and automatic teller machine (ATM) withdrawals, as well as optional services such as overdraft protection.

Savings accounts, by contrast, are intended for holding funds that are not required for day-to-day use. These accounts typically earn interest and do not include cheque writing privileges. Savings accounts generally impose lower limits on the number of transactions permitted before additional fees apply.

Registered products

Registered products are investment products that are given tax-deferred or tax-sheltered status by the government. Common examples include:

• Registered Retirement Savings Plans (RRSPs)
• Registered Education Savings Plans (RESPs)
• Tax-Free Savings Accounts (TFSAs)
• First Home Savings Accounts (FHSAs)
• Registered Retirement Income Funds (RRIFs)

Unlike chequing accounts, registered products are not intended for day-to-day transactions and withdrawals, and can be subject to specific conditions, tax implications, or repayment requirements, depending on the account type.

Fees related to the use of deposit accounts or registered products

From a consumer perspective, banking fees can be categorized based on 2 key characteristics: whether they are charged to maintain access to a service (e.g., account maintenance fees) or on a per-use basis (e.g., Interac e-transfer fees). Within each of these categories, fees are either charged as fixed amounts, as is the case with non-sufficient funds (NSF) fees, or as variable charges linked to a transaction’s value or account balance, as is the case with cross-border debit fees.

The fees described below do not represent an exhaustive list of all retail banking fees, and this report examines only a subset of the fees mentioned. Banks may also have other fees, depending on their product offerings. Importantly, consumers may incur multiple fees in connection with a single activity or transaction. These fees can interact, accumulate and compound, resulting in a total cost that may be significantly higher than the cost of any individual fee viewed in isolation.

Fees paid to maintain access to a service

Fees associated with maintaining an active account or ongoing access to banking services are typically charged on a monthly or annual basis. They apply regardless of transaction volume and are generally linked to the features or status of an account rather than to individual transactions. They include the following:

Account maintenance fee: Fixed, recurring fee charged to maintain an account, most commonly a chequing account and, in some cases, bundled packages that include both chequing and savings accounts. This fee generally covers a defined set of services and varies in cost depending on the account plan.

Monthly overdraft protection fee: Fixed, recurring monthly fee charged to customers who have been approved for overdraft protection that provides coverage for multiple overdraft occurrences during the billing period.^{Footnote 7}  Interest is payable on the overdrawn amount.

Safety deposit box fee: Fixed, recurring fee charged for the rental of a secure storage box within a bank branch.

Inactivity or dormant account fee: Fixed, recurring fee charged when a deposit account has no customer-initiated transactions for a specified period (typically 24 months or more).

Fees paid per use or per transaction

Per-use or per-transaction fees may be applied either at the time of the transaction or when an account statement is issued. These fees are typically linked either to the features of the account or to the characteristics of an individual transaction.

Account-related service fees

Paper-statement fee: Fixed fee for producing and mailing hard-copy account statements.^{Footnote 8}

Cheque ordering fee: Fixed fee charged for ordering cheques.^{Footnote 9}

Customer card replacement fee: Fixed fee charged for replacing a customer’s bank card.

PIN change fee: Fixed fee charged for requesting a change to the personal identification number (PIN) on a customer’s card.

Transfer-out fee: Fixed fee charged by a bank when a customer moves their account to another financial service provider.

Account closing fee: Fixed fee charged for closing a customer’s account.

Transaction fees

Excess transaction fee: Fixed fee charged when a customer exceeds the number of transactions per month included in their account plan. These fees apply to transaction types specified in the account agreement once the monthly transaction limit is surpassed (e.g., the number of debits made from the account beyond the established monthly limit).

Payment services fees

Interac e-transfer fee: Fixed fee charged for sending (and, occasionally, receiving) Interac e-transfers.

Wire transfer fee: Fixed fee charged by a bank to initiate or receive an electronic funds transfer through wire networks (domestic or international) separate from any applicable foreign transaction fees.

International money-transfer fee: Fixed fee charged for allowing customers to send money to international recipients from an account online.

Bill payment or bill payment reversal fee: Fixed fee charged for processing bill payments on behalf of customers and, in some cases, for cancelling or reversing payments at the customer’s request.

Stop payment fee for a pre-authorized transaction: Fixed fee charged for stopping pre-authorized payments that have not already been paid or processed through the customer’s account.

Unqualified or non-standard clearing fee: Fixed fee charged when payments presented for clearing fail to meet processing standards (e.g., cheques written in a currency other than the currency of the account).

Overdraft and non-sufficient funds-related fees

Pay-per-use overdraft protection fee: Fixed fee charged to customers approved for overdraft protection each time a debit transaction is processed despite there being insufficient funds in the account. Interest is payable on the overdrawn amount. 

Linked-account overdraft protection fee: Fixed fee charged when a customer arranges in advance for funds to be transferred from a linked product (such as a savings account or line of credit) to cover transactions when their principal account has insufficient funds. A fee is typically charged for each transfer. Interest is payable where the linked product involves the extension of credit.

Non-sufficient funds (NSF) fee: Fixed fee charged when a transaction is declined because the account does not have sufficient funds to cover a cheque, pre-authorized debit, bill payment, or other withdrawal.

Automated teller machine and cash-access fees

ATM network access fee: Fixed fee charged by the consumer’s bank when the consumer withdraws cash from an automated teller machine (ATM) that is not owned by that bank, including from ATMs located outside of Canada.

ATM convenience fee: Fixed fee charged by the ATM operator when a consumer uses an ATM that is not owned by the consumer’s bank (this includes independent “white-label” ATMs or ATMs owned by another financial institution).

Foreign currency and cross-border fees and markup

Currency conversion markup: Markup charged for converting one currency to another. The markup is calculated as a percentage markup relative to the mid-market exchange rate and is embedded in the exchange rate paid by the consumer.

Cross-border debit fees: Separate from the currency conversion markup, banks may charge variable fees when a debit transaction is made in a currency different than the currency of the account. These fees are typically triggered when making purchases with a debit card at foreign points of sale (e.g., while travelling, or online with merchants located abroad) or withdrawing cash at ATMs outside of Canada. For these transactions, the bank does not conduct a currency conversion. Instead, the currency conversion is handled by the operator of the payment network used (e.g., Visa, Mastercard, Interac).

In-branch and specialty services

In-branch or teller-assisted service fee: Fixed fee charged for services requiring staff assistance, such as processing transactions at a branch counter or handling specialized requests (e.g., coin exchange).

Bank draft fee: Fixed fee for issuing a bank draft, a guaranteed form of payment backed by the issuing bank.

Cheque certification fee: Fixed fee for certifying a cheque, whereby funds are verified and set aside in the customer’s account to guarantee payment.

Non-customer fee: Fixed fee charged to consumers who are not account holders when they access certain services at a bank, such as cashing a cheque.

Cheque image retrieval fee: Fixed fee charged for retrieving an electronic or physical copy of a previously processed cheque.

Fee structures and levels across financial service providers

FCAC examined the structure and level of fees across a range of Canadian financial service providers—including Big Six banks, small and medium-sized banks, digital-only banks, provincially regulated financial institutions, and fintechs—to better understand pricing strategies and variations across products. A detailed comparison is presented in Annex 10: Market scans of chequing accounts in Canada.

Select fee revenues

The revenue estimates presented in the table below come from data reported by banks and, where revenue data were not directly reported, from estimates derived using conservative assumptions based on publicly available fee schedules.

For most fee categories, revenues were estimated by multiplying the reported number of fee occurrences by representative fee amounts drawn from bank fee schedules.

For account maintenance fees, a lower bound revenue estimate was developed for basic, standard, and premium plans. The estimate is based on conservative monthly fees associated with each account plan type, as identified in fee schedules, together with assumptions regarding the number of months for which account holders may have incurred those fees over the course of the year.

Revenue estimates were calculated using the following representative fee amounts: NSF ($45.00), transactions ($1.25), overdraft pay-per-use ($5.00), wire transfers ($22.50), ATM network ($2.00), ATM convenience ($3.00), paper statements ($2.00), transfer-out ($100.00), inactive or dormant accounts ($20.00).

Account maintenance fee revenue estimates were calculated using representative monthly fees of $3.95 for basic plans, $11.95 for standard plans, and $18.01 for premium plans. For each plan category, the number of accounts subject to a maintenance fee at least once during the year was estimated by subtracting the number of accounts that did not incur an account maintenance fee during the year from the total number of accounts. Annual revenue estimates were then calculated by multiplying the estimated number of accounts that were charged a maintenance fee by the representative account maintenance fee and the assumed number of months during the year.

To produce conservative lower-bound estimates, account holders with basic plans were assumed to incur maintenance fees for 12 months per year, while account holders with standard and premium plans were assumed to incur maintenance fees for 1.5 months per year. These assumptions reflect the fact that many standard and premium account holders may qualify for fee waivers by maintaining minimum daily balances or meeting other eligibility criteria.