A $5.00 fee for a simple debit purchase is exceptionally high for the Canadian market. While it is likely legal (as long as it was disclosed in the fine print when you opened the account), it is far outside the industry norm of $1.25 to $1.50 for "per-transaction" fees. Since your account has no monthly fee, the bank is essentially "backloading" their costs onto your daily activity. Click for more.

 A $5.00 fee for a simple debit purchase is exceptionally high for the Canadian market. While it is likely legal (as long as it was disclosed in the fine print when you opened the account), it is far outside the industry norm of $1.25 to $1.50 for "per-transaction" fees.

Since your account has no monthly fee, the bank is essentially "backloading" their costs onto your daily activity. Here is a breakdown of why this happens and what your rights are:

1. Is it Legal?

Yes, under the Bank Act, a bank can charge $5.00 for a debit transaction as long as:

 * Disclosure: They provided you with a "Fee Schedule" when you opened the account.

 * Notice of Change: If they recently raised the fee to $5.00, they were required by law to give you 30 days' written notice (usually via your statement or online banking portal).

 * The Agreement: By using the card, you are technically consenting to the terms of that specific account type.

2. Common Scenarios for a $5.00 Debit Fee

If you are seeing a flat $5.00 on your statement for a purchase, it is usually one of three things:

 * A "Niche" Savings Account: Some high-interest savings accounts are designed only for saving. They have $0 monthly fees but charge a "penalty" fee (often $5.00) if you use them like a chequing account to buy things.

 * Overdraft "Protection" Fee: Some banks charge a $5.00 "flat fee" the moment you make a purchase that puts your balance below zero (even if you only overspend by $1). This is separate from interest.

 * Non-Bank Institutions: Some smaller private or prepaid card issuers have high transaction fees to offset the lack of a monthly subscription.

3. Your Right to a "Low-Cost" Alternative

Because you are paying $5.00 per transaction, it would only take one purchase per month to make this account more expensive than a regulated Low-Cost Account.

By federal law, every major bank in Canada must offer you an account that:

 * Costs no more than $4.00 per month.

 * Includes at least 12 to 18 free transactions.

 * If you are a student, senior (on GIS), or newcomer, this account must be $0.00 per month.

What you can do right now

 * Check your Account Type: Log in to your app and see if your account is labeled as a "Savings" account. If it is, that $5.00 is a "restricted transaction fee."

 * Request a Refund: Call the bank’s customer service. Tell them: "I found a $5.00 transaction fee on my account which I find unreasonable for a simple debit purchase. As a loyal customer, I’m asking for a one-time reversal of these fees." Most banks will refund up to 3 fees immediately to keep you as a customer.

 * Switch to a "True" $0 Account: If you want $0 monthly fees and $0 transaction fees, you should move to an online bank like Tangerine or Simplii Financial. They have no monthly fees and unlimited free debit purchases.