Bank Fees — they used to be a necessary evil – you would receive your monthly bank account statement in the mail and read down to the bottom and see the dreaded number: Monthly Account Fees – $10.95, $14.95, even $22.95 for a basic chequing account. Wait — you still do that? Really?

Why do the banks charge these fees? There are a lot of answers, some of them are maybe even reasonable answers. But the true answer is simple. They charge those fees because we pay those fees. Without complaint.

Please stop paying them. I know that it isn’t a huge amount of money, but it is becoming harder and harder to earn money and harder and harder to keep money. So please stop giving it away to companies that report billion dollar earnings PER QUARTER.

There are several institutions that offer free chequing accounts. President’s Choice Financial (PCF), Manulife Bank, and Tangerine all offer true ‘no-fee’ chequing accounts. They have their advantages and disadvantages. The main drawback of these types of accounts is that, depending on the institution and depending on where you live, you may not be able walk into a branch and talk to a teller. But really, when is the last time you actually did that? Another drawback is that you may need to pay those nasty ATM fees. If you utilize bank machines often, then choose PCF and you will be able to use any CIBC ATM with no fee. Tangerine offers email alerts when cheques clear and free email money transfers, and Manulife pays a pretty good interest rate on your balances. They all offer free on-line bill paying, you still have full internet access but at the end of the day, the benefit knowing you are not paying for the service is a little victory over the big bankers.

I looked up account fees at a few of the big banks, and most are in the $10 – $17 / month range, so I admit that you probably won’t get rich by following my advice to switch to a no-fee account, but here is a tip that might help further. A couple of the banks offer to waive the monthly fee if you keep a minimum balance in the account of $5,000 or $10,000. For most of us, that’s a good chunk of money to have just ‘sitting there’ to save $15 / month. Why not take the $5,000 and dump it into your RRSP – for most people that would generate a tax refund of at least $1,500. That would pay for a lot of monthly banking fees!

I admit that it is a bit of a process to switch bank accounts. You have to inform the companies that you do monthly PAP’s with, change your payroll, and make sure any previously written postdated cheques go through, and set up your bill payments on-line again, but once everything is fully transferred and you can close your old expensive chequing account – you will sleep a tiny bit better.