I was looking at the various tax forms appear this Tax Season and I received my “Interest Earned T4A” forms for a savings account, and I am going to get Taxed on that “income” however, I am not just not as far ahead, I think I am way behind, thanks to bank fees.
Net Growth = Interest Paid – Bank Fee – Tax on Interest
In this instance, it is Net Shrinkage (like my money was in a cold swimming pool (bad Seinfeld reference)). Not only do I lose income thanks to Income Tax on it, thanks to Bank Fees I am losing money by putting it in my bank, due to low-interest rates (1.9%) and high bank fees ($14/month).
No, I am not espousing putting your money in your mattress (although sometimes I wonder), maybe find a lower fee (or no fee) model if you are not going to carry minimum balances in your accounts (where you usually get no fees charged if you leave $5000 as a minimum balance in your bank account). There are plenty of on-line banks and PC Financial that give that to you without having to threaten to leave.
Maybe taxes could be written off against Bank Fees? Don’t make it a full credit, if you don’t have any interest income to write it off against, but it really does seem to be an ever shrinking savings world.