Canadians could soon stop paying to move their own savings between banks, after Ottawa published draft rules that would ban the exit fees banks charge when an investment account is transferred to a competitor.

The Department of Finance draft regulations would stop banks charging a fee when a client moves an investment account to a different financial institution. The rules would cover registered accounts, including RRSPs, TFSAs and RESPs, as well as non-registered investment accounts at Canadian banks. The fees typically run to $150 per account.

A review of banking fees published by the Financial Consumer Agency of Canada on 23 October found banks charge $50 to $150 to move everything out of a registered account, and $25 to $75 for a partial transfer. The agency said the cumulative cost of moving several accounts can be substantial and, in some cases, prohibitive, and that the fees can discourage switching and weaken competition.

There is a catch: the ban is not law yet and has no start date. A department official said a 30-day consultation period will begin after Saturday, and final rules will not come until after that. The Financial Consumer Agency of Canada would enforce the ban, which would apply only to federally regulated banks.

The Department of Finance estimates the ban would save consumers about $1.1 million a year. It says about 90 per cent of investment account transfers go to challenger institutions, many of which already reimburse the fees banks charge. The proposal follows a commitment in Budget 2025, and it targets the flat administrative fee only: trading commissions, early-redemption penalties on guaranteed investment certificates and mutual fund sales charges would still apply if investments are sold during a move.