How to Choose a Chequing Account in Canada
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In Canada, we’re fortunate to have a wide range of bank account options. From regular chequing accounts to hybrid accounts, online banking, and chequing accounts tailored towards specific audiences (youth, students, seniors’, newcomers, business, etc.). But do you know how to choose the right chequing account for you? In this article, we explore the elements to consider when choosing your chequing account.
What Is a Chequing Account?
A chequing account allows you to carry out your day-to-day transactions. These include purchases, deposits, debit transactions, bill payments, and withdrawals. Many financial institutions offer chequing accounts, including banks, credit unions, caisses populaires, and trust companies. Each financial institution has its own advantages and disadvantages, as well as a services that may be completely different from the others. So, there are many things to consider and evaluate before choosing a chequing account.
Things to Consider When Choosing a Chequing Account
Do you know how to choose a chequing account? Here are the most important factors to consider.
Your Profile and Needs
You may be surprised by the number and variety of chequing account types in Canada. There are accounts for specific profiles: young people, students, newcomers, seniors, business, and more.
Here are the main types of chequing accounts available in Canada:
- Personal chequing account
- Joint chequing account
- No-fee chequing account
- High-interest chequing account (Hybrid account)
- Premium chequing account
- Digital chequing account
- Youth chequing account
- Student chequing account
- Chequing account for newcomers
- Seniors’ chequing account
- U.S. dollar chequing account
- Business chequing account
Choosing the right chequing account for your profile and needs is essential. For example, if you’re a student or newcomer to Canada, look at the chequing accounts in your profile for benefits such as unlimited transactions and waived monthly fees.
To find out more about the different types of chequing accounts, consult this guide:
Branch and ATM Locations
Consider the location of bank branches and ATMs to avoid additional charges.
For example, if you regularly need in-branch banking services, choose a bank with branches nearby. Otherwise, you’ll pay withdrawal fees at other banks’ ATMs. Online banking are probably not the best option for you. If you regularly go on vacation, find out how accessible ATMs are elsewhere.
Bank Charges
Bank charges are another key factor in choosing a chequing account. So consider the following fees before making a decision:
- Monthly fees – Chequing accounts usually carry a monthly fee. Sometimes these fees are waived if you maintain a minimum daily balance in your account. Alternatively, you can choose a No-fee chequing account with no monthly fee such as the EQ Bank Personal Account.
- Transaction fees – Chequing accounts generally have a limit on the number of free transactions. After that, you must pay a fee for each transaction. Alternatively, you can choose a checking account with unlimited transactions, such as the Tangerine No-fee daily Chequing Account
- ATM fees – Banks generally charge fees for withdrawals from other banks’ ATMs. So choosing a chequing account with a bank that has ATMs nearby may be a good option.
- Interac transfer fees – Some banks charge fees for your Interac transfer transactions. However, many banks offer free and unlimited Interac e-Transfer transactions (often with online banks).
- Overdraft fees – Financial institutions charge overdraft fees when you don’t have enough money in your account to cover a transaction. However, some offer free overdraft protection.
Products and Services
Do you have other banking needs? A savings account, a car loan, a line of credit, a mortgage, a brokerage account for online investing, insurance, etc.? Some financial institutions, such as neo-banks, offer rather limited products and services. Traditional banks and most online banks, on the other hand, offer a more comprehensive range of financial products and services.
In short, before choosing a chequing account, make a list of the products you need. Then, when comparing chequing accounts, make sure the bank in question offers these products.
Customer Service
Before choosing a checking account, make sure the bank offers quality customer service. Read consumer reviews on review sites like Google and Trustpilot. Then find out whether the bank has good customer service, and whether drawbacks are minor. Finally, consider the opinions of financial experts, such as:
Promotional Offers
Many financial institutions are launching promotional offers to attract new customers. These may include cash rebates or gifts (e.g. iPad). However, before choosing a chequing account based on these promotional offers, be sure to read the related terms and conditions. Direct payroll deposit and pre-authorized payments are often required. These offers are generally very attractive, and can be combined with credit card offers.
Protections
Deposits in Canadian bank chequing accounts are protected by the Canada Deposit Insurance Corporation (CDIC). Deposits in caisses populaires, credit unions and trust companies (provincially regulated) are 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.
This protection covers your bank account for up to $100,000 in the event of bank failure. However, bank failures are rare, thanks to the stability of the Canadian banking system and strict risk controls.
Choosing and Opening a Bank Account
Choosing a chequing account is, of course, the first step. But then you need to open your new chequing account and take a number of steps. In particular, you’ll need to contact your employer to change the banking information on your paycheck deposit. You’ll also need to contact your government for family allowances and other transfers. Then, with your service providers for your monthly bills and much more.
This is a time-consuming markdown. So we recommend that you keep your old chequing account open for a few months. This way, you can make sure you haven’t forgotten anything.
Once all the steps have been completed, you can close your old chequing account to avoid paying any monthly fees or inactivity charges.
Best Banks in Canada
The best chequing account offers in Canada vary regularly. That’s why we update a list of the best bank account offers in Canada every month.
Bottom Line
In short, choosing a chequing account can be quite complex because of the large number of bank account options available in Canada. So, consider and analyze several elements before choosing and opening a chequing account. For example, your profile, your needs, bank fees, and protections. Then, take the time to compare the chequing accounts offered by Canadian financial institutions to find the account that best suits your needs.
What are the advantages of a chequing account?
A chequing account allows you to carry out your banking transactions: purchases, deposits, debit transactions, pre-authorized payments, and withdrawals. Several types of chequing accounts exist, each with its own advantages and disadvantages. Compare chequing accounts to find the one that best suits your profile and needs.
What’s the Difference Between a Current Account and a Chequing Account?
A current account is the same as a checking account. Both are synonyms. They are used for day-to-day transactions: purchases, deposits, payments, withdrawals, etc.
How do I get a chequing account?
You can open a chequing account at a branch, or online at an online bank. The account opening process is fairly quick. However, you must have reached the age of majority in your province of residence. Otherwise, you can open a Youth chequing account with the authorization of a parent or guardian.
