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Inactivity Fees in Canada 2023: Bank Accounts, PayPal & Investments

Keeping your financial accounts inactive or dormant could cost you money.

Whether it is a chequing account, investment account, PayPal, credit card, or even a gift card, an inactivity fee may apply if you are not using it. Or, in the case of a self-directed investment account, when you are not trading enough.

I hate paying fees of all kinds and consider a dormancy fee the worst of insults. It is like the bank is giving you the middle finger. You will either spend of your own volition or be compelled to do so!

Read on to learn about inactivity fees to watch out for in Canada.

Bank Account Dormancy Fees in Canada

A bank account usually becomes dormant after 2 years of inactivity, resulting in a dormancy fee or inactivity fee.

You may get a notice from the bank asking you to reactivate the account after 2, 5, and 9 years of dormancy. After 10 years of inactivity, funds in your account are transferred to the Bank of Canada (BoC).

The BoC holds unclaimed balances of less than $1,000 CAD for 30 years and balances exceeding $1,000 for 100 years.

You can search for unclaimed bank balances using this tool.

The table below shows the dormancy fees charged by Canadian banks.

BankInactivity Fee
RBC2-8 years: $20; 9th year: $40
CIBC2-4 years: $20; 5-8 years: $30; 9th year: $40
TD$0
BMO2 years: $20; 5 years: $30; 9th year: $40
Scotiabank2-4 years: $20; 5-8 years: $30; 9th year: $40
Tangerine1 year: $10; 2-9 years: $20; 10 years: $40
Simplii Financial1 year: $10; 2-9 years: $20;
EQ Bank$0
National Bank1 year: $20; 2 years: $30; 3-5 years: $40; 6-7 years: $50; 8-9 years: $60
LBC Digital2-9 years: $25; 10 years: $40
DesjardinsQuebec (1 year: $15, 2 years: $30, 3 years: $50); Ontario (2-4 years: $15, 5-8 years: $30; 9 years: $50)
Laurentian Bank1 year: $15; 2-4 years: $30; 5-8 years: $40; 9th year: $45
Neo Financial$0
Manulife Bank2, 5, 9, years: $20
motusbank$30 per year
Bridgewater bank$0

If your account balance is less than the inactivity fee, your remaining balance is deducted, and the account is closed.

Inactivity Fees For Investment Accounts in Canada

Many brokerage firms charge an inactivity fee or “account maintenance fee” when you have a low balance or do not complete a minimum number of trades each quarter.

Brokerage AccountInactivity Fee
TD Direct Investing$25/quarter if balance is less than $15,000
RBC Direct Investing$25/quarter if combined assets are less than $15,000
BMO InvestorLine$25/quarter if balance is less than $15,000
Scotia iTrade$100/year if balance is less than $25,000
CIBC Investor’s Edge$100/year if balance is less than $10,000
Questrade$0 (None)
Wealthsimple Trade$0 (None)
National Bank Direct Brokerage$100/year if assets less than $20,000
Disnat$30/quarter if value of portfolio is less than $15,000
Qtrade$25/quarter if assets less than $25,000
HSBC InvestDirect$25/quarter if assets less than $25,000
Interactive Brokers$0
CI Direct Trading$24.95/quarter if assets lower than $5,000

Inactivity fees may be waived if you complete a minimum number of commissionable trades each quarter or if you are a young investor (30 years or under).

PayPal Inactivity Fees in Canada

PayPal introduced inactivity fees starting in 2021.

If you have not conducted any transactions for 12 months, a $20 inactivity is charged to your account.

If your balance is lower than $20, the full balance is withdrawn.

Inactivity Fees For Credit Cards and Gift Cards

Inactivity or dormancy fees for credit cards are no longer common. That said, you should check your card agreement to see whether they are applicable.

Most gift cards are not allowed to expire or charge fees that lower their value over time.

Check your provincial legislation to see which rules apply:

The three territories (Yukon, Nunavut, and Northwest Territories) do not have regulations specific to gift cards.

Loyalty cards, promotional cards, and prepaid credit cards may not be covered by the same rules as gift cards.

The KOHO Prepaid Mastercard has a $1.00 monthly inactivity fee when your account has been open for 13 months but inactive for 6 months.

How To Avoid inactivity Fees

You can avoid paying a dormancy fee for your bank account by making at least one transaction each year. For example, you could set up a recurring bill payment or subscription.

For investment accounts, you can trade a stock or two each quarter or increase your balance. Even better, you can sign up for a brokerage account with no inactivity fees.

For PayPal, inactivity fees can be avoided when you:

  • Log in to your account
  • Send money to friends or family
  • Withdraw money from your account
  • Pay with PayPal wherever it is accepted, or
  • Donate to charity using PayPal

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Author

Gravatar for Enoch Omololu, MSc (Econ)
Enoch Omololu, MSc (Econ)

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch is passionate about helping others win with their finances and has been writing about money matters for over a decade. He has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, CBC News, Financial Post, Toronto Star, CTV News, Canadian Securities Exchange, Credit Canada, National Post, and many other personal finance publications. You can learn more about him on the About Page.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

1 thought on “Inactivity Fees in Canada 2023: Bank Accounts, PayPal & Investments”

  1. Gravatar for Ben

    Thanks for this interesting article. I was not aware that PayPal introduced inactivity fee. This led me to look a bit closer at how this company operates and I am not happy with what others have reported. As a result, I tried to close my account but can no longer access my account unless I provide a mobile phone number.

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  • Lock-in 4.85% interest on a 1-Year GIC!
  • Guaranteed returns.
  • Open online within minutes.
For GIC terms equal to one year, simple interest is calculated on a per annum basis and paid at maturity. EQ Bank GICs are non-redeemable.
  • Lock-in 4.85% interest on a 1-Year GIC!
  • Guaranteed returns.
  • Open online within minutes.
For GIC terms equal to one year, simple interest is calculated on a per annum basis and paid at maturity. EQ Bank GICs are non-redeemable.