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There are several chequing account options in Canada, ranging from ordinary chequing accounts to hybrid accounts, as well as chequing accounts for specific clienteles (youth, students, seniors, newcomers). Then, there are traditional banks and online banks. So, which one is best for you? In this article, we explore the different bank account options.
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. However, this is not mandatory. Several financial institutions offer chequing accounts, including banks, caisses populaires, credit unions, and trust companies.
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.
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.
Here is an overview of the main types of chequing accounts offered in Canada. Carefully examine the advantages of each before making your decision.
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.
A joint chequing account is shared by two people and allows each account holder to make transactions, deposits, debit transactions and withdrawals.
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.
A hybrid chequing account, also known as a high-interest chequing account, is a relatively new type of account in Canada. It is 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.
A premium chequing account is a type of account that offers exclusive benefits such as:
Premium accounts generally come with high monthly fees. However, these high fees can be waived if you maintain a minimum daily balance.
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).
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.
This type of bank account is aimed at students. As a general rule, these accounts have the following features:
Financial institutions often require proof of full-time enrollment in a post-secondary educational institution.
This type of bank account is aimed, as its name suggests, at newcomers to Canada. Generally, this type of account offers an exemption from monthly fees for a limited period.
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.
US dollar chequing accounts are available for those who make many transactions across the border. With this type of chequing account, you can withdraw your money in US dollars. In addition, you can easily pay for your transactions in US dollars and avoid exchange fees.
This type of chequing account is tailored to the needs of entrepreneurs and businesses, with fee structures that vary depending on the size and needs of the company.
Chequing accounts in Canada generally come with fees. The most common are monthly fees and transaction fees. However, neobanks and online banks offer chequing accounts with no monthly fees and no minimum balance required, in addition to offering unlimited fee-free transactions.
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.
Chequing accounts often have limits on the number of included transactions each month: debit transactions, pre-authorized payments, withdrawals, etc. However, online banks generally offer chequing accounts with unlimited fee-free transactions. Take the time to check your bank’s features and conditions regarding transaction fees.
Deposits in Canadian bank chequing accounts are protected by the Canada Deposit Insurance Corporation (CDIC). The CDIC covers your bank account up to $100,000 in the event of 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:
Deposit insurance does not cover the following types of deposits:
In the specific case of caisses populaires, credit unions (under provincial regulation), and trust companies (under provincial regulation), 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 the complete list of provincial deposit insurers, click here.
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.
Now that you know the different chequing account options offered in Canada, do you know how to find the chequing account that meets your needs? Here are a few things to consider before making your decision:
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.
In summary, a chequing account allows you to carry out your day-to-day transactions, such as purchases, deposits, debit transactions, pre-authorized payments, and withdrawals. Several financial institutions offer chequing accounts, including banks, caisses populaires, credit unions, and trust companies. Take the time to compare chequing accounts offered by Canadian financial institutions to find the account that best meets your needs.
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