Are Canadian Banks Holding Us to Ransom?

The price we must pay for banking in Canada!

Are we still a “first-world” country where banking is considered a right for every citizen and switching banks is a matter of personal choice? Not if you ask our banks. They present this action as one that incurs immediate penalties. “But it’s my money. I can take it wherever I want,” you say. Sure, as long as you’re willing to pay a hefty fee as an “I’m sorry for moving” charge to your current bank.

Context: On July 1, 2025, one of the most popular banks in Canada, TD (Canada Trust), doubled its transfer-out fee for Registered Retirement Savings Plans (RRSP) and Tax-Free Savings Accounts (TFSA) from $75 to $150 per account. They were not the first to do this. RBC raised its fees on August 1, 2022, increasing costs from $50 to $150 for registered accounts and from $0 to $150 for non-registered accounts. Before that, Tangerine had already raised its fees from $45 to $125 back in 2020.

While these may seem like minor adjustments, they represent a troubling trend where banks are penalizing customers for simply wanting to move their money. In an era when technology has reduced the cost and time of financial transactions and online banking is saving institutions millions in wages and overheads, Canadians are being asked to pay more than ever to transfer their funds. This is not progress, and it certainly does not reflect a free market economy.

In a free-market economy, bank fees are determined by supply and demand, with consumers paying for the services they use, such as monthly account fees, transaction fees, ATM fees, and non-sufficient funds (NSF) fees. These fees can vary widely between banks and are often waived under certain conditions, like maintaining a minimum balance or having no transactions in a month.

To avoid paying even these fees, consumers can choose to switch to online banks, which generally have lower overhead costs and can pass the savings on to customers, or select premium bank accounts that may offer fee waivers. However, that is not the case with Canada’s so-called “people-friendly” banks. Here, moving your own money can easily cost you hundreds of dollars since each registered account (TFSA, RRSP, LIRA, and others) is treated as a separate transaction. If you have four registered accounts, the $150 transfer-out fee per account would total $600 to switch. But the issue is much larger than just the $600 fee.

A financial expert recently estimated that such exit and withdrawal fees could cost Canadians hundreds of millions of dollars annually. That’s money that should be growing in customers’ retirement accounts, not padding banks’ profit margins.

And finally, please spare us the inflation argument. The almost tripling of fees within a few short years, especially during some of the most challenging financial times for average Canadians, cannot simply be dismissed as a consequence of economic trends “beyond our control.” This is a penalty and a punishment for exercising our choice. What’s worse is that it discourages Canadians from seeking better services, better rates, and more rewards in a competitive market.

What do we call this? A new form of enslavement to banks?

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