Many small businesses may make only a couple of banking transactions each month — a couple of deposits and maybe a withdrawal or two — but still end up paying a chunk of it in banking fees. As far as I know, there are no free business chequing accounts available anymore (HSBC Canada briefly offered a free business chequing account but doesn’t any longer). All the big banks offer a basic pay-as-you-go business chequing account for monthly fees ranging between $6 per month at RBC and CIBC and around $10 at BMO, TD Canada Trust and Scotia Bank.

If you average just one or two transactions every month and are unable to maintain a large cash balance, you should take a look at the RBC Business Essentials Savings Account. There are no monthly fees and no minimum balance requirements but you will pay $1 for every electronic or cheque deposit. The first two withdrawals are free but every subsequent withdrawal will cost $3.50. If you are averaging less than 2 deposits and 2 withdrawls every month, you’ll save approximately $50 per year in business banking fees. CIBC also offers a no monthly fee business savings account but since each debit transaction costs $5, any savings are likely to be quickly wiped out.

If you are able to maintain a large cash balance and perform a larger number of transactions, you may want to look into BMO’s Small Business Banking Plan. The account has a monthly fee of $9.50 which is waived if you keep a minimum monthly balance of $4,000. The plan includes a fair number of free transactions but keep in mind that a $4,000 balance translates into an opportunity cost of $40 (assuming a 1 percent interest rate). TD Canada Trust and Scotia Bank also waive monthly fees for maintaining a minimum balance but the limits are higher ($8,000 at TD Canada Trust and $5,000 at ScotiaBank).

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  1. Pingback: No-Fee Business Chequing Account from HSBC Direct | Canadian Capitalist

  2. Pingback: RBC and BMO offer cheaper business banking options | MoneySense

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  4. TD also offers a business savings account with similar rules to the RBC Business Essentials Savings account. I believe they charge $1 per deposit and $5 per withdrawal but transfers to and from a TD personal bank account are free so if you use your personal account to pay expenses and just make occasional deposits to your business account it works out to be quite cheap.

  5. Fees for TD will increase in August 2013 to $17 per month and minimum balance to waive the cost will increase from $8000 to $15,000!!

    Small business owner beware.

    Who can I advice him to cash the check he gets from his client and put the money into a safety deposit box. With interest rates zero that is the best strategy. Especially since you can get your hands on cash quickly and make a deal on the street, online craiglist etc. Close ALL accounts you have with Canadian robbing banks!

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  7. Take a look at First Credit Union. They do offer a no fee small business account. It is very limited but has been a good choice for my business up to now. I have out grown it, which is a good thing.

  8. Choose RBC, this is my bad experience with Tangerine: https://medium.com/@OpenSourceMerch/ca542ad2663c