What Is a Chequing Account in Canada?

What Is a Chequing Account?

A chequing account is a type of bank account designed to handle your day-to-day transactions, such as purchases, deposits, debit transactions, pre-authorized payments, and withdrawals. Often, a savings account is linked to a chequing account at the same financial institution. But this is not mandatory. Many financial institutions offer chequing accounts, including banks, credit unions, caisses populaires, and trust companies.

What’s the Difference Between a Current Account and a Chequing Account?

A current account is the same as a checking account. They are synonyms. They are used for day-to-day transactions: purchases, deposits, payments, withdrawals, etc.

What’s the Difference Between a Chequing Account and a Savings Account?

As mentioned earlier, a checking account is designed to handle your day-to-day transactions, while a savings account is for saving and earning interest.

Types of Chequing Accounts in Canada

Here’s an overview of the main types of chequing accounts available in Canada. Carefully consider the benefits of each before making your decision.

1. Personal Chequing Account

An ordinary chequing account is often the first type of account a person opens. As a rule, this type of bank account has monthly fees and limited transactions.

2. Joint Chequing Account

A joint chequing account is shared by two people and allows each account holder to make transactions, deposits, debit transactions and withdrawals.

3. No-fee Chequing Account

This type of bank account does not charge monthly fees or fees for day-to-day operations. These are generally offered by neobanks and online banks.

4. Hybrid or High-Interest Chequing Account

A hybrid chequing account, also known as a high-interest chequing account, is a relatively new type of account in Canada. It’s a bank account that also offers a high interest rate on your money. In some cases, these bank accounts also offer rewards and cash back on your daily purchases.

5. Premium Chequing Account

A premium chequing account is a type of account that offers exclusive benefits such as:

• Free international money transfers
• Preferential exchange rates for US dollars
• Discounts on annual credit card fees
• Reduced rates on online brokerage accounts
• Personalized cheques
• Etc.

High-end accounts usually come with high monthly fees. However, these high fees can be eliminated if you maintain a minimum daily balance.

6. Digital Chequing Account

A digital chequing account is a type of bank account that offers the same benefits as a traditional account, with the exception of in-branch services. It is generally offered by online banks, but also by some traditional banks (for example, National Bank’s The Connected banking package).

7. Youth Chequing Account

As the name suggests, this type of bank account is aimed at young people. It is opened with a parent or guardian as co-signer. These accounts generally have zero fees and often come with unique benefits.

8. Student Chequing Account

This type of bank account is aimed at students. As a general rule, these accounts have the following features:

• No monthly fees
• Unlimited number of transactions (including purchases, withdrawals, bill payments, etc.)
• Unlimited Interac e-Transfers

Financial institutions often require proof of full-time enrollment in a post-secondary educational institution.

9. Chequing Account for Newcomers

This type of bank account is aimed at newcomers to Canada. As a general rule, this type of account waives monthly fees for a limited period.

10. Seniors' Chequing Account

As the name suggests, this type of bank account is aimed at seniors. As a general rule, this type of account offers reduced monthly fees or no-fee day-to-day banking.

11. U.S. Dollar Chequing Account

U.S. dollar (USD) chequing accounts are available for those who make a lot of transactions across the border. With this type of chequing account, you can withdraw your money in U.S. dollars. In addition, you can easily pay for your transactions in US dollars and avoid the exchange fees.

12. Business Chequing Account

This type of chequing account is tailored to the needs of entrepreneurs and businesses, with fee structures that vary according to the size and needs of the business.

Chequing Account Fees

Chequing accounts in Canada are generally subject to fees. The most common are monthly fees and transaction charges. However, neo-banks and online banks offer chequing accounts with no monthly fees and no minimum balance requirements, as well as unlimited transactions free of charge.

1. Monthly Fees

Chequing accounts usually carry a monthly fee. Sometimes these fees are waived if you maintain a minimum daily balance in your account. Take the time to check your bank’s terms and conditions regarding monthly fees.

2. Transaction Fees

Chequing accounts often have limits on the number of transactions included each month: debit transactions, pre-authorized payments, withdrawals, etc. However, online banks generally offer chequing accounts with unlimited transactions free of charge. Take the time to check your bank’s features and conditions regarding transaction fees.

Deposit Insurance

Deposits in Canadian bank chequing accounts are protected by the Canada Deposit Insurance Corporation (CDIC). CDIC covers your bank account for up to $100,000 in the event of a bank failure. If you have more than $100,000 in a chequing account, you may consider opening a second chequing account at another financial institution. However, you should know that bank failures are rare in Canada, thanks to strict risk controls.

Deposit insurance protects the following types of deposits:

• Chequing accounts
• Savings accounts
• Guaranteed Investment Certificates (GICs)
• Term deposits
• Foreign currency accounts (e.g. US dollar accounts)

Deposit insurance does not cover the following types of deposits:

• Stocks
• Bonds
• Exchange-Traded Funds (ETFs)
• Mutual funds
• Cryptocurrencies
• Fraud or theft

In the specific case of caisses populaires, credit unions (provincially regulated), and trust companies (provincially regulated), deposits are instead protected by provincial insurers. For example, the Financial Services Regulatory Authority of Ontario (FSRA) in Ontario and the Autorité des marchés financiers (AMF) in Quebec. For a complete list of provincial deposit insurers, click here.

Online Chequing Accounts

Chequing accounts are offered by both traditional and online banks. Often, the best terms, such as no monthly fees and unlimited transactions, are offered by online banks. What’s more, online chequing accounts are protected by the Canada Deposit Insurance Corporation(CDIC), or by the provincial deposit insurer in the case of a caisse, cooperative or trust.

If you’re interested in online chequing accounts, make sure they meet your needs. For example, if you regularly require in-branch services, cheques or bank drafts, online chequing accounts may not be the best option for you.

How Do You Find the Right Bank Account For You?

Now that you’re familiar with the various chequing account options available in Canada, do you know how to find the chequing account that’s right for you? Here are a few things to consider before making your decision:

• Frequency of use: Many banks limit the number of transactions on their chequing accounts. Otherwise, opt for an account with unlimited transactions. For example, the Tangerine Chequing Account.
• Daily balance: Many banks waive monthly fees if you maintain a certain daily balance. Otherwise, opt for an account with no monthly fees. For example, the EQ Bank Personal Account.
• Currency: Many banks offer U.S. dollar (USD) chequing accounts. For example, the Tangerine US Dollar Savings Account.
• Interest: Many banks offer hybrid accounts, also known as high-interest chequing accounts. Examples include the EQ Bank Personal Account and the Wealthsimple Cash Account.
• Rewards: Many banks offer bank accounts with cash rebates on your purchases. For example, the Neo Everyday account (up to 6% cash back) and the Wealthsimple Cash Account (1% cash back).

How Do I Open a Bank Account?

Opening a bank account is easy. If you choose a bank account with a traditional bank, you can open your chequing account online or directly at the branch. If it’s an online bank, then account opening is done online, of course. The online account opening process usually takes about 15 minutes. Make sure you have all your documents on hand, such as proof of identification. Before you do, take the time to compare the chequing accounts offered by Canadian financial institutions.

Bottom Line

In short, a chequing account allows you to carry out day-to-day transactions such as purchases, deposits, debit transactions, pre-authorized payments and withdrawals. Many financial institutions offer chequing accounts, including banks, credit unions, caisses populaires, and trust companies. Take the time to compare the chequing accounts offered by Canadian financial institutions to find the account that best suits your needs.

What is a chequing account?

A chequing account, also known as a current account, is a bank account designed to handle your day-to-day transactions: purchases, deposits, debit transactions, pre-authorized payments and withdrawals. Many financial institutions offer chequing accounts: banks, caisses populaires, credit unions and trust companies.

Who can open a chequing account?

Anyone with the age of majority in their province can open a chequing account. Most Canadian banks will also allow young people to open an account with the authorization of a parent or guardian.

Which bank accounts have no monthly fees?

A no-fee checking account is a type of bank account that charges no monthly fees or charges for day-to-day operations. These are generally offered by neobanks and online banks, such as Banque EQ, Neo, Tangerine and Wealthsimple.