Chequing Accounts: a comprehensive guide

Do you want to have all the information about chequing accounts? From Responsible Economy, we show you what chequing accounts are, what they’re for, and everything you need to know. Let’s get started!

What are Chequing Accounts?

A chequing account, known in some regions as a checking account, is a type of bank account that is primarily used for everyday financial transactions. In Canada, these accounts allow individuals to deposit their money, withdraw funds, pay bills, and conduct other routine financial activities. They come equipped with chequebooks, and, in today’s digital age, often have associated debit cards and online banking features.

Chequing Accounts vs Savings Accounts

While chequing and savings accounts are both fundamental financial tools, they serve different primary purposes:

  • Purpose: A chequing account is mainly for daily transactions, while a savings account is designed to hold money and accrue interest over time.
  • Interest Rates: Chequing accounts typically have lower interest rates compared to savings accounts. Some may not offer interest at all.
  • Transaction Limits: Savings accounts in Canada might have limitations on the number of withdrawals or transfers you can make each month without incurring a fee. Chequing accounts generally provide more flexibility in this regard.

Best Chequing Accounts

We have compiled a ranking of the best chequing accounts you can open in Canada:

Logo BMO Canada
  • $0 monthly fee with $4,000 balance.
  • Welcome bonus up to $450.
  • Unlimmited transactions.
  • More than 2,200 ATMs in Canada
TD Bank logo Canada
  • $0 monthly fee with $5,000 balance.
  • Welcome bonus up to $450.
  • More than 2,600 ATMs in Canada.
  • Unlimmited transactions.
RBC logo
  • $5-16,95 monthly fee.
  • Welcome bonus up to $599.
  • More than 4,200 ATMs in Canada.
  • Unlimmited transactions.
National Bank of Canada Logo
  • $0 monthly fee with $6,000 balance.
  • More than 2,300 ATMs in Canada.
  • No Welcome bonus.
  • Unlimmited transactions.

Common Requirements

Opening a chequing account in Canada often requires the following:

  • Proof of identity: A valid driver’s license, passport, or other government-issued ID.
  • Social Insurance Number (SIN): While not always mandatory, it’s commonly requested.
  • Initial deposit: Some banks require a minimum deposit to open the account.

Factors to Consider When Opening a Chequing Account

When selecting the right chequing account, consider:

  • Fees: Be aware of monthly fees, transaction fees, and other hidden charges.
  • Features: Look for additional features such as online banking, mobile apps, or overdraft protection.
  • ATM Network: A vast ATM network can save you money on withdrawal fees.
  • Customer Service: Choose a bank with a good reputation for customer service, especially if you value in-person banking.

Functions of Chequing Accounts

Here is a list of the main functions of Chequing accounts:

  • Deposit and Withdrawal of Funds: Chequing accounts allow users to deposit their salary, income, or other funds and withdraw them as needed.
  • Bill Payments: Users can set up automatic or manual payments for utilities, rent, mortgages, and other regular bills.
  • Personal Cheques: Chequing accounts come with chequebooks, allowing users to write cheques as a form of payment.
  • Debit Card Transactions: Most chequing accounts provide a linked debit card, which can be used for point-of-sale transactions or ATM withdrawals.
  • Electronic Funds Transfer: Transfer money to other accounts, whether within the same bank or to other institutions.
  • Direct Deposit: Employers can deposit salaries or wages directly into a chequing account.
  • Overdraft Protection: Some accounts offer overdraft protection, allowing users to spend slightly more than the account balance without incurring hefty fees.
  • Mobile and Online Banking: Access account information, make transfers, pay bills, and manage finances through online platforms or mobile apps.
  • Alerts and Notifications: Receive updates about account activity, balance thresholds, or potential suspicious activities.
  • Interac e-Transfers: In Canada specifically, Interac e-Transfers are a popular feature that allows users to send money to others via email or mobile phone.
  • Safety and Security: Funds in chequing accounts are usually insured up to a certain limit, offering protection against bank failures.

Conclusion

Chequing accounts are an integral part of everyday financial life in Canada. While there’s no one-size-fits-all answer, understanding the key differences, features, and requirements can guide you to the account that best fits your needs. Whether you prioritize no fees, a vast ATM network, or excellent customer service, there’s likely a chequing account in Canada that’s right for you.

Actualizado el día 2 September, 2023 por Alfredo Barandiarán

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