Bank charges in Canada and 4 ways to reduce them

Key takeaways:

• Common business bank charges in Canada include monthly maintenance fees, transaction fees, foreign exchange (FX) markups, and, in some cases, minimum balance penalties.

• Different banks in Canada have their own fee structure and types of business bank accounts.

• To reduce or avoid bank charges, choose a payment provider that lets you consolidate multiple accounts on one platform, makes transfers through local payment rails, and gives you access to interbank rates. 

A bank account is your business's financial engine, letting you send, receive, and manage funds. Depending on the type of bank account, you may incur various fees when making transfers, including monthly maintenance fees, minimum balance fees, transaction fees, and foreign exchange (FX) fees.

Understanding bank charges helps you avoid unexpected costs that might impact your profit margins. In this guide, we'll explore the common bank fees in Canada, compare fees across popular business bank accounts, and learn to minimize bank charges strategically.

What are bank charges? 

Bank charges are the fees associated with using financial services, such as opening a business account, making transfers, and accepting payments. These fees can impact your overall costs, including payroll and supplier payments, as well as international transactions. When comparing business bank accounts, it's important to review the fee schedule and fine print, particularly clauses regarding free domestic transfers or fee waivers.

Banks often structure fees based on account type and transaction volume. If you’re running a small business with a lower transaction volume, you’ll likely have simpler fees. However, if you operate at scale or across borders, you may incur higher costs due to increased operational demands and complex services.

Different types of bank charges

Here are some standard bank charges you might encounter across banks in Canada:

Account setup fees

Account setup fees are a one-time charge imposed by banks when you open a new account. These fees cover the administrative costs of processing your application. Some banks may require a minimum deposit upfront to open the account and ensure a baseline balance. 

While most major banks in Canada don’t charge a one-time setup fee to open a business account, they may require a minimum initial deposit or an ongoing balance to avoid monthly fees. Some banks may waive this requirement for small and medium-sized enterprises (SMEs) or new customers.

Monthly account fees

Monthly account fees (also known as admin or maintenance fees) are recurring charges banks apply to keep your business account open. These fees cover administrative tasks like account monitoring, monthly statements, and customer support. They typically range from C$10 to C$50, depending on the bank and account type. 

For example, the Royal Bank of Canada (RBC) charges monthly account fees ranging from C$10 to C$30 for its business accounts. Some banks waive these fees if you can maintain a minimum daily closing balance or bundle multiple services with them, so it’s worth checking for such conditions to save on costs.

Minimum balance requirement and fall below fees

A minimum balance requirement is the minimum daily or monthly amount that a bank requires you to maintain in your account. If your balance falls below this threshold, you’ll incur a fall-below fee. 

For example, let’s say your bank requires a minimum daily balance of C$5,000. If you maintain C$6,000 for 15 days and C$3,000 for the next 15 days, the daily average balance would be C$4,000, and you would incur a fall-below fee.

Transaction fees

Transaction fees are charges banks apply when you make payments to another bank account within Canada or abroad. Some banks offer a limited number of free local transfers per month, while others charge fees for each transaction. 

For example, TD Bank offers business checking accounts with a certain number of free debit transactions and Interac eTransfers included. If you exceed that limit, they charge a per-transaction fee. 

Cross-border fees

Cross-border fees are charges you incur when sending or receiving payments across international borders. These fees often include SWIFT fees, processing costs, currency conversion fees, and intermediary bank fees.

For example, CIBC charges between C$30 and C$80 for outgoing international wire transfers, depending on the destination, currency, and type of transfer. This doesn't include additional FX fees or intermediary bank charges.

Foreign exchange (FX) fees

When you convert currencies, banks usually apply a 2–3% markup on top of the mid-market exchange rate.¹ This hidden fee is baked into the final FX rate you see, so you may not even realize you’re paying extra.

For example, when you convert CAD to USD, your bank may apply a 2.5% markup, increasing the cost of your transfer. These FX fees can add up if you make frequent international transfers.

Overdraft and non-sufficient funds (NSF) fees

Overdraft fees are charges that banks apply when you spend more than the balance available in your account. These fees cover the cost of temporarily allowing your account to go into a negative balance. If a transaction is declined due to insufficient funds, you may also be charged a non-sufficient funds (NSF) fee.

Overdraft protection typically must be opted into – it’s not applied automatically. Fees vary by bank and account type, but overdraft fees generally range from C$5 to C$45 per transaction.

For example, if you overspend on a supplier payment and leave your account C$500 short, the bank may still allow the transaction to go through if you’ve enabled overdraft protection, but it could charge you a fee based on the amount and your agreement with the bank.

Inactivity and dormancy fees

Inactivity and dormancy fees are charges banks impose on business accounts that haven’t been used for a specified period. These fees cover the cost of maintaining an inactive account. To avoid these charges, you should regularly review your accounts to ensure they’re being utilized effectively.

Comparing bank charges in Canada 

Let’s compare the different bank charges that you may encounter from leading banks in Canada: Royal Bank of Canada (RBC), TD Bank, Scotiabank, Bank of Montreal (BMO), and Canadian Imperial Bank of Commerce (CIBC). We also added our Business Account as a fintech alternative to these traditional business bank accounts. 

The table below compares the fees incurred for the lowest-cost business accounts for each bank against those incurred for the Airwallex Business Account.

4 ways to reduce bank charges

Bank charges can quietly erode your margin, especially if you make frequent cross-border transfers. Here are four strategies to help you reduce these charges: 

1. Open a business account with low or no monthly fees

The right business account aligns with your business needs and transaction volumes. Look for an account that has no setup fees, low or no monthly fees, or one that waives fees if you meet certain conditions, such as maintaining a minimum daily balance. If your business processes a high number of transfers each month, consider negotiating with your provider for custom rates or bundled services to reduce per-transaction charges.

2. Consolidate your accounts with a single provider

Managing multiple accounts across providers means more admin work and higher fees. Consolidating your accounts with a single provider can help you reduce duplicate effort and fees. If you’re operating across Canada and other regions, streamlining your accounts into a single platform like Airwallex enables you to simplify your financial operations and gain a consolidated view of your finances globally, while keeping costs low. 

3. Use local payment rails instead of SWIFT

Banks typically use wire transfers or the SWIFT network for international transfers, which often incur high transaction fees and intermediary charges. To avoid these charges, choose a provider that uses local payment rails. Airwallex’s proprietary network of local payment rails enables you to send money to over 120 countries at no cost, as if it were a local transfer (e.g., sending USD to a supplier in the US). 

4. Access competitive FX rates to reduce conversion costs

Most banks charge a 2–3% FX markup above the mid-market rate when converting currencies for international transfers, typically in addition to transfer fees. To reduce FX fees, work with a provider that offers interbank rates with a small, transparent margin. When you get competitive rates and full visibility into what you’re paying, you get to keep more of your money when converting and sending across currencies.

Keep your costs in check and save more on each dollar you earn

The right business account can save you from the hassle of constant monitoring and help you avoid unnecessary bank charges. Our Business Account lets you do just that. With no setup fees, monthly charges, or minimum balance requirements, you can focus on your business without worrying about these administrative costs.

With our multi-currency Wallet, you can receive, hold, and transfer funds on one platform. No more managing separate entities and incurring additional maintenance fees. And when you need to convert currencies, you can do so at interbank rates with a small, transparent markup of 0.5–1%, ensuring you keep more of your money.

With Airwallex, you can make high-speed international transfers to over 200 countries, leveraging 120+ local payment rails. 95% of our transfers are settled within a day, providing you with greater certainty over your cash flow. 

Our platform offers integration with accounting software like QuickBooks and Xero, automatically categorizing and tracking transactions for you. This integration streamlines your monthly reconciliation, enabling you to stay on top of transaction fees and manage your cash flow more efficiently.

We simplify payments and keep costs low so you can focus on growing your business. That’s why over 150,000 businesses trust us to process more than $150 billion USD in payments annually.

Frequently asked questions

What are the most common hidden bank charges that businesses overlook?

Businesses often overlook hidden bank charges like fall-below fees, transaction fees, foreign exchange markups, and cross-border fees on international payments. These costs may seem small, but they can accumulate over time. 

How can I negotiate bank fees with banks?

Demonstrate your value as a loyal customer by maintaining substantial account balances or utilizing multiple services. It also helps to compare offerings from other banks and use this information as leverage. Be clear about the solutions you want, such as fee waivers or custom pricing, to secure better terms.

Are there any banks in Canada that offer zero-fee business accounts?

Yes, some banks in Canada offer business accounts with no monthly fees or fee waivers if you meet specific conditions, such as maintaining a minimum daily balance or utilizing bundled services. However, transaction fees may still apply, so it's important to compare different accounts and fees to find one that suits your business needs.

How often should businesses review their bank statements to identify unnecessary charges?

Businesses should review their bank statements and account transactions at least monthly to identify and address any unexpected fees, errors, or suspicious activity promptly.

Are there specific tools that help businesses track and monitor bank fees effectively?

Yes, many banks and financial institutions provide tools to help businesses track and monitor bank charges. account balances, transaction fees, and receive notifications to avoid overdraft or insufficient funds charges. 

Do all banks in Canada charge the same fees for business accounts?

No, bank charges differ across banks in Canada. Each bank sets its own fee structure based on the account type and features offered. Comparing fee structures across financial institutions, including major banks and fintech alternatives, can help you find the best fit for your business.

Sources

1. https://www.knightsbridgefx.com/comparefxrates/ 

2. https://www.rbcroyalbank.com/business/accounts/digital-choice-business-account.html 

3. https://www.rbcroyalbank.com/onlineservices/business/online-wire-payments/fees-schedule.html

4. https://www.td.com/ca/en/business-banking/small-business/bank-accounts/basic-business-plan

5. https://www.td.com/content/dam/tdct/document/pdf/personal-banking/520594a.pdf

6. https://www.scotiabank.com/ca/en/small-business/business-banking/business-bank-accounts/basic-business-account.html

7. https://www.scotiabank.com/ca/en/business-banking/banking-solutions/payments-and-merchant-services/international-money-transfer.html 

8. https://www.scotiabank.com/content/dam/scotiabank/refresh/documents/bank-accounts/english/fees_interest_schedules.pdf

9. https://www.bmo.com/main/business/accounts/ebusiness-plan/ 

10. https://www.bmo.com/pdf/better-banking-guide-business-en.pdf 

11. https://www.bmo.com/main/business/cash-management/making-payments/ 

12. https://www.cibc.com/en/business/accounts/basic-business-operating-account/fees-and-details.html

Disclaimer: We wrote this article in Q2 2025. The information was based on our own online research, and we were not able to manually test each tool or provider. The information is provided for educational purposes only, and readers should consider their business's specific requirements when evaluating providers. If you would like to request an update, feel free to contact us at [email protected].