A chequing account is what most people consider to be their main account for day-to-day banking. You will use this account to deposit your earnings, withdraw cash, pay bills or make debit card purchases. Because of all these transactions, chequing accounts are referred to as “transactional” accounts.
There are different types of chequing accounts, most of which come with monthly fees, as explained in more detail below.
Since your chequing account is used for transactions, the expectation is that there will be a lot of money movement: money in from paycheques, money out for expenses. As such, a chequing account usually has lower transaction fees than a savings account.
The tradeoff, however, is that chequing accounts don’t accumulate much, if any, interest on deposits. That’s why it’s important to have both chequing and savings (or multiple savings) accounts.
Yes, there are several types of chequing accounts. These are the most common:
Personal chequing accounts are the most common and basic type of chequing account out there. Individuals use personal chequing accounts to manage their everyday banking interactions.
Senior chequing accounts are designed to be a little more helpful for the older members of the community. Typically, these accounts include free monthly paper statements, teller-assisted transactions and discounted services such as safety deposit box rentals.
Youth chequing accounts are for young Canadians under the age of majority who open a bank account. Typically, these accounts are free and allow you to hold the account until the age of 18. After this point, you can look to switching to a student account if you meet the requirements.
Similar to youth accounts, student chequing accounts are free. This is to help students save money on fees. However, there are specific requirements to open and maintain a student account. Each bank will have its own rules, but all require you to be enrolled as a full-time student in a recognized post-secondary educational institution to qualify.
U.S.-dollar chequing accounts are specifically designed to hold U.S. dollars. These types of accounts are handy for those who get paid in USD and don’t want to convert to Canadian dollars because they travel or do business in the United States.
Business chequing accounts work the same way as a personal chequing account but for business purposes.
Joint accounts are chequing accounts that two or more individuals can share. Everyone on the account has equal access to the funds within the account. These accounts are helpful for their convenience and popular with spouses, family members or even business partners.
You can open a chequing account in person at the bank or, in some cases, banks will allow you to open one online as well. It’s a relatively quick and simple process. You will need to provide personal information such as your name, phone number and home address. You will also need to know your social insurance number (SIN) so make sure to have that handy. If you are going into a branch to open your account, bring two pieces of identification with you as well, just in case. For individuals who don’t have two pieces of ID, another banking card or credit card with your name on it can do the trick.
As long everything is in order, financial institutions will approve chequing accounts instantly. If you apply in person, you will receive a temporary banking card until yours arrives by mail. If you applied online, you can use the online platform but will have to wait a few days for your card to arrive by mail.
Earning interest on a chequing account is rare in Canada. However, there are a couple of exceptions, mostly with no-fee accounts offered by digital banks. Keep in mind rates are pretty low, so it’s not a substitute for savings accounts.
Most big brick-and-mortar banks charge a small fee even for their basic chequing accounts. Some online banks such as Tangerine, Wealthsimple, and Motusbank do have free chequing account options.
Free is always best. However, even banks without free accounts often have a loophole. If you have multiple accounts with them — for example, chequing, Tax-Free Savings Account (TFSA) and a credit card — then you might be able to get the chequing fees waived. It’s always worth asking, even if it’s not offered!
Hannah Logan is a writer and blogger who specializes in personal finance and travel. You can follow her personal travel blog EatSleepBreatheTravel.com or find her on Instagram @hannahlogan21.