New low- and no-cost accounts coming to Canadian banks

Several major banks in Canada will soon be offering bank accounts for a minimal monthly fee, thanks to a new government initiative.

According to the Financial Consumer Agency of Canada (FCAC), by December 1, 13 banks in Canada will ensure that everyone has access to modern banking services at a low cost. As a result, Canadians will benefit from"modernized no-cost and low-cost accounts costing no more than $4 per month."

"Every Canadian deserves access to affordable, modern banking. That's why we worked with the FCAC to strengthen the commitment by financial institutions on free and low-cost bank accounts — more transactions, fewer fees and better access," said Philippe Champagne, Minister of Finance and National Revenue.

"This is a clear step toward fairer, lower-cost banking for all."

Under this agreement, Canadians will have access to modern basic banking services and 50 per cent more transactions every month, including e-transfers.

Some Canadians may even be eligible for no-cost bank accounts if they meet specific criteria.

Banks may waive the $4 monthly fee if you are a newcomer to Canada, or belong to at least one of the following groups: Indigenous peoples, Canadians receiving social assistance payments from select provincial or territorial programs, or individuals with a valid Disability Tax Credit Certificate and/or their supporting family member.

According to mortgage broker Ratehub.ca, banks in Canada typically charge anywhere from $3.95 to $14.95 per month.

The low-cost bank accounts will be available at 13 banks in Canada, including Alterna Bank, BMO, CIBC, Hana Bank Canada, ICICI Bank, Industrial Commercial Bank of China, Innovation Federal Credit Union, Laurentian Bank, National Bank, Royal Bank of Canada, Scotiabank, Tangerine Bank and TD Bank.

Banks must ensure that information on low-cost and no-cost accounts is prominently displayed online and at their bank branches. Additionally, staff will also be trained about these account options.

Currently, some banks in Canada offer basic banking services for $4 a month to youth, students, seniors receiving the Guaranteed Income Supplement (GIS), and Registered Disability Savings Plan (RDSP) beneficiaries.