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Bank fees driving you crazy? Here’s how to pay them with dividends

Banking fees can add up especially when you are buying and selling stocks, but here's how you can use your ownership in banks to make back your bank fees.

Canadians complain about their high bank fees. Most of my bank fees originate from buying and selling stocks, since some are for short-term trades.

I pay my bank $22 a month on general fees, and $10 per trade. Assuming I trade 10 times per month, that results in $122 of fees per month, totaling to $366 per quarter, or $1,464 per year. Yikes! It sure accumulate fast.

Here are a few real-life examples of how to use your ownership in banks to pay for your bank fees.

The largest banks in Canada are Royal Bank of Canada , Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, and Canadian Imperial Bank of Commerce.

 

Ticker* Price* Market Cap* YieldS&P Credit RatingDebt to EquityRY$79114B3.9%AA-0.2TD$55.3102.2B3.7%AA-0.1BNS$65.479.1B4.2%A+0.1BMO$7850.2B4.1%A+0.1CM$9537.7B4.5%A+0.3

 

Method 1: Buy the same dollar amounts
It might be overkill to own all five banks, but let\’s see what happens when we consider this scenario. Investing the same dollar amounts in every bank gives an average yield of four.08%, indicating that I must invest $7,177 in every bank to get enough dividends to pay the bank fees. This is a total investment of $35,883. This is a lot of money in advance.

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