Canada's big banks continue to enjoy big profits. But that hasn't stopped them from charging customers a host of personal banking fees.
In fact, fees have become an ever more important part of their revenues.
Many banks are also making it more difficult to avoid one of the largest and most irritating fees — that pesky chequing account charge that can cost up to $30 a month.
- Canada's major banks hiking fees while pulling in big profits
Almost all the big banks offer accounts where customers can bypass the fee if they maintain a specified minimum balance — typically $1,500 to $5,000, depending on the account.
However, the required minimum balance often keeps climbing, and fast — typically by increments of $500. That's making it harder for Canadians to avoid monthly account charges.
"They've really trapped that consumer," says personal finance blogger Robb Engen, who lives in Lethbridge, Alta. "It's a blatant fee grab."
Scotiabank hikes fees
This March, Scotiabank will hike by $1 the monthly charge for four of its personal banking accounts. The fees currently range from $9.95 to $14.95 a month.
The bank waives the charge for customers who keep a specified minimum balance in three of those accounts. But that amount is going up, too — by $500.
In 2015, Scotiabank also raised the minimum balance required in those accounts by $500.
For the lowest cost one, Power Chequing, the balance required to waive the monthly fee will have climbed from $1,000 in 2015 to $2,000 this March — that's a 100 per cent increase.
Scotiabank told CBC News that it regularly reviews its pricing to stay competitive and that it continues to invest in customer services. The bank added that it's including a new perk this year: two free e-transfers per month for most accounts.
Scotiabank's $500 hikes are typical of the big banks. Last month, BMO increased the required minimum balance to waive monthly fees by $500 for three of its chequing accounts. It did the same thing for those accounts in 2014.
BMO did not respond to CBC News's request for comment.
Last year, CIBC also raised the required balance in its Everyday Chequing Account to $2,000 from $1,000 — a 100 per cent increase.
The bank told CBC News that it has also removed some bank charges and that it's committed to helping clients find ways to minimize fees.
In 2015, TD hiked by $500 the balance requirement for four of its chequing accounts.
TD said it regularly reviews and adjusts its fees based on market conditions. It also told CBC News that it's the only big bank to offer the no-fee option for all of its personal banking accounts.
'I was ticked off'
Financial blogger Engen has a chequing account with TD. When he learned in 2015 that his minimum required balance to avoid the monthly fee was rising to $2,000 from $1,500, he decided he'd had enough.
"I was ticked off," says Engen.
He says a rising minimum balance creates trouble for consumers on two fronts. If they still manage to maintain the balance, they're letting an even bigger amount of cash sit idle, not earning interest.
"It doesn't make sense to have high balances in chequing accounts," says Kerri-Lynn McAllister, with the rate comparison site RateHub.
But if customers decide to drop down to a less costly account, that typically means they will get fewer included transactions and will have to pay up when they go over the limit.
"So you easily go over your transactions, and then you get nickel and dimed with those fees," says Engen.
How to get around those fees
Engen says one way to avoid the fee trap is to negotiate with your bank.
That's exactly what he did in 2015. Engen contacted his TD financial adviser and informed him that he was closing his account because of the minimum balance hike.
The manager offered a solution. He allowed Engen to switch to a student account — even though Engen isn't a student. The account has no monthly fee and includes more transactions than were offered in Engen's basic account.
Another option is to seek out lower cost alternatives offered by a credit union or a digital-based bank.
Digital banks PC Financial, Tangerine, and Alterna Bank all offer chequing accounts with no monthly fees. Customers may still get dinged for some things like e-transfers or extra cheques, depending on which option they choose.
These smaller operators can charge less because they don't have to incur hefty overhead costs, says McAllister, who is based in Toronto.
For some people, that may be a disadvantage because they can't just pop over to their local branch. "It doesn't make sense if you want that in-person service," says McAllister.
Engen also advises that customers can scope out the digital bank offerings and then use them as a bargaining chip during negotiations with their current bank.
"Don't just say, 'Give me a better deal.' Be serious about having another competitor's offer in your hand," he says.
While some customers may just accept rising bank fees, Engen insists that people should always fight for a better deal.
"My advice is, you need to negotiate everything."