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my best money advice

Many Canadians are paying steep bank fees.

During financial literacy month, Canada's top money bloggers are sharing their best piece of advice.

Do you have the right bank account?

Your bank account is the heart of your financial affairs. It's something you use every single day. Although everyone has at least one bank account, I believe most people have what I call the wrong bank account.

What is the right bank account?

In my opinion, the right bank account has two characteristics.

1. It should pay you interest.

Most conventional bank accounts pay little to no interest. Certainly, the majority of the chequing accounts at the five major Canadian banks pay no interest, or if you're lucky, very little. Wouldn't the ideal bank account pay you as much interest as possible?

2. It should not charge high monthly fees.

Most conventional bank accounts charge $10 to $30 a month in service fees. In some cases, banks will waive these monthly fees if you keep a high minimum balance (but they don't pay you interest on that monthly balance). But wouldn't the ideal bank account be free from monthly fees?

Where do you find the right bank account?

Many people have asked me where to find an account with these two characteristics. Well, the right bank account can be found with a lot of the second-tier banks. The common name for these types of bank accounts are high-interest bank accounts.

For example, I have one of these high-interest bank accounts with Manulife Bank (don't worry . . . I do not make money promoting them). My bank account can do everything your bank account does. I have a debit card, a chequebook, deposit slips, statements, online access, etc. The main difference is my bank account is earning 1.55 per cent from the first dollar I insert (interest rates are subject to change) and I pay no monthly service fees.

Another big difference between Manulife and the conventional banks is that you don't see one on street corners. In fact, there isn't a single bricks and mortar Manulife bank in Canada. The whole idea behind these banks is to provide higher interest and lower fees, which is more favourable to you.

What about cash?

When it comes to these high-interest bank accounts, a major concern for people is how to access cash. Here's how it works: You use ATM machines from certain other banks and pay a $1.75 transaction fee. In most cases, paying $1.75 once or twice a month is a whole lot more economical than paying $10 a month (on the low end) and if you keep any sort of balance in your account, the interest you make will more than offset the odd withdrawal here or there. Some of these high-interest accounts are part of a network where you can use select ATMs at no charge. If getting cash is important to you, you simply need to be aware of the details by doing a little homework.

Why should I change bank accounts?

At the end of the day, most people have a bank account that costs them money every day, regardless of whether they use it. Instead of your bank being a cost centre, it's time to look at turning your bank into a profit centre.

Most people I talk to have dealt with the same bank account, paying fees and earning zero interest, for years or even decades. For most people, complacency is the number one reason for keeping these costly bank accounts. But today, there are better places to store your money.

Who are the players?

To find the high-interest bank account that is right for you, do some research. There's all kinds of different options and versions. Some of the most popular examples include President's Choice Financial, ING Direct, and Ally Bank. Ironically, all three of these banks are owned by the major banks. CIBC owns President's Choice Financial. ING was bought by Scotia Bank and Ally was just bought by the RBC. As a result, the interest rate on these three high interest bank accounts have come down a bit (around 1.35 per cent) since their independent days but they still remain a better alternative than paying fees and earning no interest.

The bottom line: It's up to you to make the next move

If you have not reviewed your bank account in a long time, if ever, what are you waiting for? It's time to put money in your pockets instead of adding them to the huge profits of the big banks.

Jim Yih, an Edmonton-based financial educator and former investment adviser, is the blogger behind