The $150 figure is not a typo. In 2025, TD raised its RRSP and TFSA transfer-out fee to $150, matching a similar move by RBC. That means if you want to move your retirement or savings account to a different bank, you pay $150 per account just to leave. For a couple with two RRSPs and two TFSAs, that’s $600 before you save a dollar in lower fees. And yet, 53% of Canadians have already switched financial institutions at least once because of rising fees, according to a 2025 survey by Money.ca.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
Nearly 6 million Canadians switch one or more financial products in a given year, according to the Environics Canadian Financial Services Switching Study, which has tracked this behaviour for 25 years. The typical switcher is younger, digitally engaged, and fed up with monthly fees that eat into take-home pay. What I tend to notice is that most people underestimate the total cost of staying put — not just the monthly account fee, but the lost interest, the minimum-balance traps, and the exit penalties that lock you in. Here’s what you actually need to know.
Key Takeaways and What “Exit Fee” Really Means
That first stat — 53% switching because of fees — is worth sitting with. More than half of the people surveyed by Money.ca in June 2025 said they’ve already moved at least one financial product over cost. Another 23% said they’re watching fees closely and may move if costs climb further. That adds up to nearly 9 in 10 Canadians either ready to switch or seriously considering it. The term you’ll run into most often here is exit fee (or transfer-out fee).
What I’d do first: check what your current bank charges to transfer out each type of account. That number tells you whether switching is worth it or whether the exit cost eats up the first year of savings. For more context on how fees stack up against your broader financial picture, you might find it useful to read a reality check on savings rates.
What the Fee Breakdown Actually Costs You
Monthly account fees at Canada’s Big Five banks typically run between $15 and $30, though many waive the fee if you keep a minimum balance of $1,000 to $5,000. That $20 monthly fee adds up to $240 a year — money that could be earning interest or covering real expenses. The table below shows how the costs compare across account types.
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| Fee Type | Traditional Big Five Bank | Digital / Online Bank |
|---|---|---|
| Monthly account fee | $15 – $30 | $0 |
| Transaction fee (per withdrawal) | $1 – $2 | $0 |
| Minimum balance to waive fee | $1,000 – $5,000 | None |
| RRSP/TFSA transfer-out fee | $150 | $0 – $50 |
That $150 exit fee is the single most consequential number in this entire article for most people. It’s the one that catches people off guard because they don’t see it coming. They open a new account, request the transfer, and then get hit with a bill from their old bank. The BriefGlance analysis notes that 75% of Canadians now say avoiding banking fees has become more important over the past year, and 80% say better money management tools matter more due to economic uncertainty. The math works in favour of switching for most people — but only if you plan for the exit fee upfront.
Where the Switch Goes Wrong
The exit fee surprise
The most common mistake is not checking the transfer-out fee before initiating a switch. Say you move a TFSA with $10,000 to a no-fee online bank. The new bank charges $0 monthly, saving you $240 a year. But your old bank charges $150 to transfer out, and you didn’t budget for it. That $150 eats the first 7.5 months of savings. If you’re moving multiple accounts, the fees stack. The fix: call your current bank, ask for the exact transfer-out fee per account type, and factor it into your savings calculation before you open anything new. If you’re unsure about the legal implications of switching accounts or need help understanding fine print, speaking with a qualified professional can help. You can get legal advice from a Canadian lawyer online to clarify any contract terms.
Forgetting to update automatic payments and deposits
This is the operational headache that derails many switches. Direct deposits from your employer, automatic bill payments for utilities, mortgage, internet, and subscription services — all of them are tied to your old account number. Miss one, and you could face a late payment fee or a service interruption. HMRC data isn’t relevant here, but the principle is the same: every bank switch requires a checklist. Walk through your last three bank statements and record every recurring transaction. Update the new account details at least two weeks before you close the old account. Most digital banks provide a switching checklist or a dedicated support team to help with this step.
Assuming all no-fee accounts are equal
A $0 monthly fee is appealing, but it’s not the only factor. Some no-fee accounts charge for e-transfers, physical cheques, or ATM withdrawals beyond a certain limit. Others offer lower interest rates on savings or no access to a branch network. The Money.ca survey found that 23% of Canadians are watching fees closely and may move if costs climb further, but they also weigh perks like branch access, travel insurance, and mobile app quality. Before you switch, compare the full fee schedule — not just the monthly charge. A no-fee account that charges $1.50 per e-transfer could cost you more than a $15 monthly account if you send 15 e-transfers a month.
How to Make the Switch Without Losing Money
Compare the full cost of your current bank vs. the new one
Start with a side-by-side comparison of monthly fees, transaction charges, minimum-balance requirements, and transfer-out fees. If your current bank waives the monthly fee when you keep $4,000 in chequing, that $4,000 could be earning interest elsewhere. The table below shows how traditional and digital banks stack up on the features that matter most.
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| Feature | Traditional Bank | Digital / Challenger Bank |
|---|---|---|
| Monthly fee | $15 – $30 | $0 |
| Interest on savings | 0.05% – 1.00% | 1.50% – 4.00% |
| Branch access | Yes | No |
| Mobile app quality | Varies | Usually strong |
| ATM network | Extensive | Limited or fee-reimbursed |
Open the new account before closing the old one
You want both accounts active during the transition. Open the new account, set up online banking, and test the login. Most digital banks let you open an account in under 10 minutes with a mobile app and a photo of your ID. Don’t close the old account until you’ve confirmed that automatic payments and deposits are flowing through the new one. The overlap period is usually two to four weeks.
Move your money and update everything systematically
Start with the simplest accounts first — chequing and savings. Then move to registered accounts like RRSPs and TFSAs, where the transfer-out fee applies. Submit a transfer request through the new institution; they’ll handle the paperwork with your old bank. After the transfer, update your direct deposit information with your employer and your automatic bill payments with each provider. A budgeting planner book can help you track which accounts and payments have been updated, so nothing slips through the cracks.
What’s coming next: the Real-Time Rail and faster switching
Payments Canada is developing the Real-Time Rail (RTR), an always-on system for instant payments. When it launches, it will make moving money between banks faster and more transparent. The same BriefGlance analysis notes that 69% of Canadians believe government bodies should stop mailing physical cheques and adopt digital disbursement. This shift toward instant payments will likely reduce the friction of switching over time, but it’s not here yet. For now, the switching process still takes one to three weeks for most accounts.
Frequently Asked Questions About Switching Banks
Will switching banks hurt my credit score? ▾
Can my new bank reimburse the $150 transfer-out fee? ▾
What happens to my pre-authorized payments during the switch? ▾
Is it worth switching if I have a minimum-balance account that waives fees? ▾
Do I need to switch everything at once? ▾
What if my employer uses a specific bank for payroll? ▾
What the Shift Means for Your Banking Future
The $150 exit fee is a symptom of a bigger shift. Nearly half of Canadians now use online or challenger banks, and that number rises to 52% among those aged 18 to 64. The Big Five are responding — Bank of Montreal is partnering with digital platforms, CIBC is building AI budgeting tools, and Scotiabank has set up digital innovation units. But the fee structure hasn’t caught up to the competition yet. The Canadian fintech market is projected to grow from roughly $12 billion in 2024 to over $18.8 billion by 2033, according to the BriefGlance report. That growth will put more pressure on traditional banks to lower fees or risk losing more customers. For now, the math tilts in favour of switching for anyone paying $15 or more per month in account fees, provided you plan for the exit cost and the transition logistics.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Wellness Programs: Your Guide to Better Personal Insurance in Canada.
Sources and Further Reading
Is Your Savings Rate Good Enough? A Reality Check for CA Residents — A practical look at whether your current savings rate keeps pace with your goals, especially relevant when switching banks changes your savings potential.
Environics (2026). The Canadian Financial Services Switching Study. 🔗
Money.ca (2025). Switched Banks Due to Rising Fees. 🔗
BriefGlance (2026). The Great Canadian Financial Shift: Consumers Forge a New Banking Era. 🔗
