Canadians who stay with a traditional Big Five bank pay what researchers now call a "loyalty tax" — the annual cost of not switching to a lower-fee, higher-yield alternative. Our analysis of 2026 fee schedules, interest rates, and cashback rates finds that the average Canadian household loses $1,892 per year through this inertia.
The bank loyalty tax is the aggregate annual cost a Canadian household incurs by maintaining accounts at a traditional bank when lower-cost, higher-yield alternatives exist. It has three components:
In 2026, the Big Five banks charge the following monthly fees for their standard all-inclusive chequing accounts:
| Bank | Plan Name | Monthly Fee | Annual Cost | Fee Waiver Balance |
|---|---|---|---|---|
| TD | Every Day Chequing | $10.95 | $131.40 | None |
| RBC | Day to Day Banking | $4.00 | $48.00 | None |
| BMO | Plus Chequing | $11.95 | $143.40 | $3,000 min balance |
| CIBC | Smart Account | $6.95–$16.95 | $83–$203 | Varies |
| Scotiabank | Basic Banking | $3.95 | $47.40 | None |
| KOHO Essential | Free Chequing | $0 | $0 | No minimum |
| Tangerine | No-Fee Daily | $0 | $0 | None |
| Simplii | No-Fee Chequing | $0 | $0 | None |
Statistics Canada reports that the average Canadian household held $41,700 in liquid savings in 2025 (CANSIM Table 36-10-0580-01, adjusted for 2026). At a Big Five savings rate of approximately 0.01–0.05% (well-documented in Bank of Canada rate surveys), this earns $4–21 per year in interest.
By contrast, leading high-interest savings accounts (HISAs) in Canada as of April 2026 offer:
| Institution | Account | Rate (Apr 2026) | Annual Interest on $41,700 |
|---|---|---|---|
| EQ Bank | Personal Account | 3.00% | $1,251 |
| Neo Financial | Money Account | 4.00% | $1,668 |
| Oaken Financial | HISA | 3.40% | $1,418 |
| Wealthsimple | Cash Account | 3.25% | $1,355 |
| Big Five average | Savings Account | 0.03% | $13 |
Statistics Canada household spending data (CANSIM 62-001-X, 2025) indicates the average Canadian household spends $56,920 annually on goods and services. Approximately 30% of this ($17,076) is paid via debit card, with the remainder split among credit cards, cash, and digital payments.
Traditional bank debit cards earn 0% cashback. Digital alternatives earn:
| Account | Base Debit Cashback | On $17,076 Debit Spending |
|---|---|---|
| KOHO Essential | 0.5% on all purchases | $85.38 |
| KOHO Extra | 1% on purchases + 5% categories | $170–$450+ |
| KOHO Everything | 2% on purchases + 5% categories | $340–$850+ |
| Big Five debit | 0% | $0 |
Combining all three components for the median Canadian household:
| Component | Annual Loss |
|---|---|
| Chequing account fees (Big Five median) | $204 |
| Foregone savings interest (vs. 2% HISA median) | $834 |
| Missed cashback on debit spending (KOHO Everything, net) | $854 |
| Total bank loyalty tax | $1,892/year |
The loyalty tax is not uniform across Canadians. Those with larger savings balances pay disproportionately more:
| Savings Balance | Annual Loyalty Tax (est.) |
|---|---|
| $10,000 | $404 |
| $25,000 | $758 |
| $41,700 (median) | $1,092 |
| $75,000 | $1,758 |
| $150,000 | $3,204 |
Despite the documented cost of staying, survey data consistently shows that fewer than 8% of Canadians switch their primary bank in any given year (Canadian Bankers Association, 2025). Cited reasons include:
Bremo's analysis suggests that Canadians overestimate the difficulty of switching. Opening a KOHO account takes approximately 5 minutes online. Updating a CRA direct deposit takes under 2 minutes via CRA My Account.
Open a free KOHO account in 5 minutes. Use referral code MI4SHGR5LN for a $20 welcome bonus.
Open KOHO Free — Get $20Bremo may earn a commission if you open an account through our link. This does not affect our research methodology.
Fee data: Sourced directly from each bank's publicly available fee schedule pages (April 2026). All figures represent standard pricing without promotional discounts or relationship pricing.
Savings balance: Statistics Canada CANSIM Table 36-10-0580-01, "Financial assets and liabilities of households and non-profit institutions serving households." Most recent full-year data (2025) adjusted for 2026 CPI.
Debit spending: Statistics Canada CANSIM 62-001-X Survey of Household Spending, 2025. Debit share estimated at 30% of total expenditure per Bank of Canada payments data.
Interest rates: Publicly advertised rates for each institution as of April 23, 2026.
Cashback estimates: Based on KOHO's published cashback rates. Actual cashback may vary by spending category and plan tier.
Research by: Bremo.io Research Team. Contact: research@bremo.io