CONSUMER WATCHDOG

TD Canada Trust adds fee for TFSA transfers to another bank

​TD is about to become the last of the big five banks to charge a fee for transferring your tax-free savings account to another financial institution.

TD joins the other five Canadian banks in charging similar fees

TD will become the last of Canada's big five banks to charge customers for transferring their tax-free savings account to another financial institution effective Mar. 1. (CBC)

TD is about to become the last of the big five banks to charge a fee for transferring your tax-free savings account to another financial institution. 

Starting Mar. 1, TD will charge $75 plus tax.

"Until this change, we were the only bank to offer this for free," said TD spokesperson Alicia Johnston.

"This fee reflects the costs involved in processing and moving the assets to another institution."

In an email to CBC, Johnston said TD ensures its fees are competitive and the savings account fee is "priced at the mid-point (which varies from $45-$100) in the market."

The other four banks also charge an account fee. Royal Bank, Bank of Montreal (BMO), East Coast Credit Union (ECCU) and Scotiabank charge $50. CIBC charges $100. 

Besides TD, the four other big banks told CBC News they have no plans to increase their bank fees. 

More changes and charges

TD is also moving to charge $5 for holding a post-dated cheque to be deposited in the branch and to cancel an Interac money e-transfer.

It's also planning to increase the fee for using another bank's ATM from $1.50 to $2 — a 33 per cent increase. 

Johnston said the bank regularly reviews its products and services to remain competitive in today's marketplace and to meet the needs of its customers.

"We recognize pricing can be a sensitive issue for our customers and we always consider the impact before proceeding with any change," she said.

Johnston points out that there are ways for customers to avoid the charges or reduce their impact.

                   TD's Fee   Current     Mar. 1 
  Using another bank's ATM   $1.50     $2
  Cancelling e-transfer  no fee     $5
  Holding post-dated cheque  no fee     $5
  Transfer TFSA to another bank     no fee $75 + tax 

Nothing to prevent fee hikes

Ken Whitehurst with the Consumers Council of Canada said while people may not like the new or increased fees, in most cases they've unwittingly agreed to them.

"If they consult their [banking] agreements, they'll probably see that they agreed to the banks being able to impose a fee increase on them," he said.

This is an unfortunate aspect of many service agreements these days, Whitehurst said.

"People agree their contracts can be changed unilaterally by the other side of the contract, which we don't approve of, but that's the reality," he said, adding that depending on the size of your bank account, you may not pay fees at all.

Fees 'a growing business'

TD is simply following the competition Whitehurst said, noting the fees are not regulated.

"It would take leadership at the political level or among regulators to make a change," he said.

Whitehurst said fees aren't just a problem with banks.

"Fees on transactions are becoming a significant and growing business," he said.

Banks and other financial institutions often impose fees to keep customers from switching their business and if customers feel this is causing harm, Whitehurst explains, they should contact the Competition Bureau.

He advises consumers to shop around for the bank with the lowest fees. At the same time, he acknowledges changing financial institutions because of fee increases is very challenging to do.

Last year, Royal Bank backed away from a plan to charge customers transaction fees for loans, mortgage payments and debit transactions on some account types after a political and public outcry.

                 Fees   RBC   CIBC    BMO    ECCU     SB 
 Using another bank's ATM  $1.50  $1.50  *$1.50    $3 $1.50 
 Cancelling e-transfer  no fee  $3.50  no fee  no fee no fee 
 Holding post-dated cheque   $5   n/a   $3  no fee   $5
 Transfer TFSA  $50  $100  $50   $50  $50

*Some transactions are included in certain bank plans. 

About the Author

Yvonne Colbert

Consumer Watchdog

Yvonne Colbert has been a journalist for nearly 35 years, covering everything from human interest stories to the provincial legislature. These days, she's focused on helping consumers get the most bang for their bucks and avoid being ripped off. She invites story ideas at yvonne.colbert@cbc.ca.

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