Why You Should Use A No Fee Bank Account vs. A Traditional Account

Why You Should Use A No Fee Bank Account vs. A Traditional Account

I often find myself in conversation with friends and family explaining why they should stop paying for a traditional bank account and switch to a free one. I finally thought it was time to sit down and write out all the reasons why a free banking account is simply put –just better in so many ways and a necessary step to take. Whether you find yourself content with the monthly fees you’re paying or have been thinking about switching, read on to learn more about a personal finance decision that may seem small but in the long run can save you money and stress.

What is a no fee bank account and how does it differ from a traditional account?

In simplest terms, a no-fee bank account offers you a chequing and/or savings account for free with very few restrictions, no minimum balances or monthly fees. Now most of us here in Canada know that there are five big banks which dominate the financial world:

These “traditional” banks offer many account options that range from having no monthly fees to being quite pricey. Their no or low fee accounts can seem like a great option but in reality when you choose to pay less with a traditional bank you find yourself face-to-face with many restrictions and requirements such as limited transactions, charging a fee for certain services like e-transfer or requiring a minimum balance. Several online banks have been popping up and growing in popularity:

These online banks offer no fee bank accounts to compete with the big banks and overall provide an alternative, cheaper banking option for Canadians. Their ability to provide services like free accounts and unlimited transactions is all because they don’t have the same overhead costs as traditional banks with physical locations.

Security

You’ll be happy to hear that with a free bank account you don’t need to sacrifice the security you feel with one of the big banks. The top online banks in Canada are protected by the Canada Deposit Insurance Corporation (CDIC).

How often do you actually go into a bank

When switching to an online bank, no longer having a physical branch to visit may seem like a scary thing. But I have one question for you – how often do you actually go into a bank? You know what, I have a follow up question – how often do you actually enjoy going into a bank? Without a physical location, online banks have to offer cutting edge digital tools and exceptional virtual customer services. Making that switch to an online bank will open your eyes to exceptional service and will make your everyday banking needs more accessible from the comfort of your home.

Compounding fees

The cost of monthly fees at a traditional bank may seem small at the beginning but they compound overtime. The truth is that currently in Canada there is no need to pay for a bank account as online banks are providing more for less. Instead of paying a monthly fee you can start putting the money you are saving toward other financial goals

Even more benefits

As mentioned above, with online banks you don’t need to worry about maintaining a set balance and you get to benefit from features like unlimited transactions. Additionally, savings accounts with online banks can offer higher, more competitive interest rates than traditional banks.

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Why You Should Use A No Fee Banking Accounts vs. a Traditional Account

If you are ready to make this change, I have these referral links below that offer various bonuses to signup: