Canada’s bank fee cap just kicked in — here's how much you'll save
People in Canada no longer have to worry about being charged a hefty bank fee as a new government measure kicks in on Thursday, March 12.
The federal government has implemented a cap on the fee that Canadian banks can charge for non-sufficient funds (NSF).
Banks charge NSF fees when a cheque or pre-authorized debit (PAD) payment is declined due to insufficient funds, and the customer doesn’t have overdraft protection. Those fees typically range from $45 to $48, so the cost can add up.
“Even if someone is just $5 short when paying a bill or covering a cheque, they can be hit with a non-sufficient funds fee as high as $50,” reads a statement from Minister of Finance François-Philippe Champagne, on Thursday. “That’s money that could otherwise go toward groceries, medicine, or other everyday essentials.”
We’re making banking more affordable for Canadians.
Lower NSF fees, affordable bank accounts, and faster access to your money. pic.twitter.com/a9Bj1Cl3fX
— François-Philippe Champagne (FPC) 🇨🇦 (@FP_Champagne) March 11, 2026
The history of NSF fees
Koho founder Daniel Eberhard told Daily Hive that Canada has operated on a centralized banking economy for a long time.
“Functionally, if you’re going to have a really protected economy like this, it is incumbent upon the regulators to also protect customers from the excesses of that which we have not done, although this is an important step in the right direction,” said the CEO of the Canadian fintech company.
Eberhard told Daily Hive that he spoke with a banker who said they had a quota of NSF fees to hit.
“They used to charge $75, then they charged $55, and so he and his team spent time thinking about how they can make sure users get hit with these no-money fees, which is pretty gross,” he explained.
Before this NSF rule kicked in, these fees were often applied regardless of the size of the account shortfall and could be charged in rapid succession because of multiple declined payments, according to the Financial Consumer Agency of Canada (FCAC).
How the cap on NSF bank fees in Canada works
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Starting March 12, you cannot be charged more than $10 in Canada if you don’t have enough money in your personal deposit account to cover a payment to be drawn from that bank account.
In addition to the $10 cap, Canada will only allow a bank to charge one NSF fee per account over two business days.
“If a consumer has two accounts at the same bank, or two accounts across different banks, an NSF fee may be imposed within the two-business-day period if it is incurred on a different account from the first NSF fee in that period,” explained a government notice.
The new rules will also prevent Canadian banks from charging an NSF fee when the amount of overdraft on that account is under $10.
“Should a consumer have insufficient funds to make a payment, but the overdrawn amount falls within this range, the payment could still be declined, but banks will not be permitted to impose an NSF fee under that circumstance,” stated the government.
Who will benefit from the NSF fee cap
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FCAC Commissioner Shereen Benzvy said these fees disproportionately affect Canadians who are struggling financially.
“The average income in this country is $43,000. So, let’s say those folks are bringing home 30,000 a year. You’re talking about $500 to $1,000 going towards these fees in a given year,” explained Eberhard.
He added that people who have a lot of money with banks aren’t paying these fees, so it’s the lowest-income Canadians who are exposed to this.
“We’ve kind of implicitly built this poor tax in this country around bank fees,” he said.
Ultimately, while it’s a good step, the Koho founder thinks this cap is a band-aid solution.
“If you take a major revenue line item away from banks, they’re going to try and make that revenue elsewhere,” he said. “But it’s an important band-aid because this is one of the worst, egregious fees in the country.”
He added that banks aren’t the only culprits for charging high NSF fees. Eberhard said they’ve seen auto lenders and payday lenders hit consumers with $100 to $200 fees.
When it comes to reforming bank fees in Canada, the fintech entrepreneur doesn’t think you can “regulate all of these fees away in a way that isn’t counterproductive.”
“I think you have to create conditions for competition to flourish, and then users will pick the best products,” he said.
For more details on your rights as a consumer regarding NSF fees, check out the FCAC’s FAQ page.