To support the Government of Canada’s guidelines on low-cost and no-cost bank accounts that are coming into force today, the Financial Consumer Agency of Canada has updated its Account Selector tool.
Consumers can now use the tool to calculate their monthly banking fees based on discounts for which they may qualify. The tool makes it easier to compare low-cost and no-cost accounts at various financial institutions and to choose the accounts that best meet their needs.
The enhanced guidelines increase, from 8 to 12, the minimum number of transactions included in low-cost account packages, which are available to anyone, while the maximum monthly fee remains $4. The same packages are available at no cost to youth, students, Registered Disability Savings Plan beneficiaries and seniors receiving the Guaranteed Income Supplement.
* In Economic Action Plan 2014, the Government of Canada committed to enhance access to basic banking services.
* In May 2014, the Government announced that Canada’s eight largest banks agreed to enhance low-cost accounts to meet consumers’ current banking needs and expand no-cost banking services to youths, students and seniors who qualify for the Guaranteed Income Supplement, and Registered Disability Savings Plan beneficiaries.
* FCAC’s study Banking Fees in Canada: Patterns and Trends showed that, while demand for low-cost accounts had increased since their introduction in 2003, several banks had reduced the maximum number of transactions allowed in these plans. The result was an indirect increase in monthly fees. The study recommended a review of the guidelines for low-cost accounts so they would better reflect the fact that consumers now require a greater number of transactions to meet basic banking needs.
* Under the updated guidelines, banks must also:
o use clear and simple language to describe the features and extra service charges of low-cost and no-cost accounts
o prominently display information about the availability of low-cost and no-cost accounts in branches and online
o post information in branches and online on how consumers can access FCAC’s Account Selector tool.
"The beginning of a new year is a great opportunity to review your banking habits and determine whether your current package still meets your needs. I encourage consumers to use FCAC’s Account Selector tool to assess the benefits of different, lower-cost packages and whether they would be eligible for no-cost accounts. By choosing a package that suits their personal situations and financial habits, they can keep their monthly fees low while saving money in the long run."
Lucie Tedesco, Commissioner, Financial Consumer Agency of Canada