Tool · account fees
Account-fee calculator: pay the fee or hold the minimum?
Compare three ways to run a chequing account — paying the monthly fee, parking enough money to waive it, or moving to a no-fee account — including the interest you give up. Runs in your browser; nothing is sent anywhere.
Result
Switch to a no-monthly-fee account
is the lowest-cost option at these inputs — about $156 a year less than the most expensive option.
| Option | Fees / yr | Interest given up / yr | Total over 5 yr |
|---|---|---|---|
| Pay the monthly fee | $180.00 | $0.00 | $900 |
| Keep the minimum balance | $15.00 | $52.50 | $338 |
| Switch to a no-monthly-fee account | $24.00 | $0.00 | $120 |
Inputs are saved only in this browser.
How the calculation works
For each option we add up a year of costs:
- Pay the fee: 12 × the monthly fee, plus any transaction overage and other monthly charges.
- Keep the minimum: the fee only in months you dip below the minimum, plus overage and other charges, plus the after-tax interest you give up on the extra money parked in chequing: parked × (rate elsewhere − chequing rate) × (1 − tax rate).
- No-fee account: its monthly fee (usually $0) plus any charges you expect to incur, such as out-of-network ATM use.
The break-even rate is the before-tax rate at which the interest you give up equals the fees you avoid. Below it, holding the balance wins; above it, paying the fee and putting the money to work elsewhere wins.
Worked example
The starting inputs are an illustration, not any bank’s actual pricing: a $15 monthly fee waived at a $4,000 minimum, a usual balance of $1,500, one month a year below the minimum, a 3.0% alternative rate and a 30% tax rate.
| Option | Cost per year |
|---|---|
| Pay the monthly fee | $180.00 |
| Keep the minimum balance | $67.50 |
| Switch to a no-monthly-fee account | $24.00 |
Parking the extra $2,500 costs about $52.50 a year in after-tax interest, against $165.00 of fees avoided. The break-even rate is 9.43%: unless the parked money could earn more than that elsewhere, holding the minimum beats paying the fee. In this example the no-fee account, at $24 a year of assumed extra charges, is cheaper still — the lowest-cost option is switch to a no-monthly-fee account.
Watch the all-month rule. If your balance dips below the minimum for even a day, many plans charge the full fee for that month. Be honest in the “months below” box.
Before you switch to save fees
Price is only one part. A cheaper account still needs to handle your cash and cheque deposits, give you an ATM network you can reach, and sit at an institution with the deposit protection you expect. Our bank-switching checklist covers the move itself, and the guide to bank fees lists the charges that don’t show up in the monthly price.
Frequently asked questions
Is it better to pay a monthly bank fee or keep the minimum balance?
It depends on how much extra money you would park and what that money could earn elsewhere after tax. If the after-tax interest you give up is less than the fees you avoid, holding the balance is cheaper. The calculator shows the break-even rate for your numbers.
What is a break-even interest rate?
It is the after-tax return at which parking extra money to waive the fee costs exactly the same as paying the fee. If you could reliably earn more than that rate elsewhere, paying the fee and investing the money comes out ahead.
Do minimum balances have to be kept all month?
Often yes: many plans waive the fee only if the balance never dips below the minimum during the month. One dip can trigger the full fee. Use the “months below the minimum” box to model that.
What is the cheapest bank account required by law?
There is no legal free account for everyone, but 14 banks have signed the federal low-cost and no-cost account commitment: a low-cost account of no more than $4 a month with at least 18 debit transactions (since December 1, 2025), and a no-cost version for eligible groups.
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