How to Choose a Chequing Account in Canada
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To choose a chequing account, compare monthly fees, included transactions and Interac e-Transfer costs first, then check how your deposits are protected. A no-fee account like EQ Bank's or Tangerine's covers everyday banking; a paid plan only pays off if you keep a high balance.
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. An online bank is probably not the best option for you either. 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.
| Account | Monthly fee | What's included | Condition to remember |
|---|---|---|---|
| EQ Bank Personal Account | $0 | Free Interac e-Transfers, no overdraft fees, free ATM withdrawals in Canada | Canadian ATM operators' fees are refunded up to $5, 5 times a month. The rate rises from 1.50% to 2.75% with direct deposits of at least $2,000 a month |
| Tangerine No-Fee Daily Chequing Account | $0 | Unlimited daily transactions and Interac e-Transfers, free access to 3,500+ Scotia ATMs | A withdrawal at any other ATM in Canada costs $1.50 |
| TD All-Inclusive Banking Plan | $30.95 ($22.45 for customers 60 and over) | Unlimited transactions | The monthly fee is rebated with a minimum monthly balance of $6,000 |
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 chequing 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.
CDIC protects your eligible deposits up to $100,000 per deposit category, interest included, at each member institution. An account in your name, a joint account and a registered plan such as a TFSA or RRSP each count as a separate category. Among provincial insurers, the AMF protects up to $100,000 per category in Quebec, while FSRA insures up to $250,000 of non-registered deposits at an Ontario credit union, and registered plans without limit. Bank failures remain rare, thanks to the stability of the Canadian banking system and its 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 task. 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. Create a free member account to see member-only offers. We update the 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.
Frequently Asked Questions
What are the advantages of a chequing account?
A chequing account puts your purchases, deposits, debit payments, pre-authorized payments and withdrawals in one place. Each type of account has its own strengths and limits, so compare them against your profile and needs.
What's the difference between a current account and a chequing account?
There is none: the two terms are synonyms. Both describe the account you use for day-to-day transactions such as purchases, deposits, payments and withdrawals.
How do I open a chequing account?
You can open a chequing account at a branch, or online if the bank offers that option. Opening takes little time, but you must have reached the age of majority in your province (18 or 19, depending on where you live). Younger customers can open a youth account with a parent or guardian's authorization.
Is my money protected if my bank fails?
Yes, within deposit insurance limits. At a CDIC member bank, your eligible deposits are protected up to $100,000 per deposit category, interest included. At a credit union or caisse, the limit depends on your province's insurer: $100,000 per category in Quebec (AMF) and $250,000 for non-registered deposits in Ontario (FSRA).
Is a no-fee account really free of fees?
Monthly fees are zero, but watch for withdrawals at other networks' ATMs. With Tangerine, a withdrawal at an ATM outside the Scotia network costs $1.50 in Canada. EQ Bank refunds Canadian ATM operators' fees up to $5 per withdrawal, five times a month.
Can a monthly-fee banking plan be worth it?
Yes, if you keep a high balance. The TD All-Inclusive Banking Plan costs $30.95 a month ($22.45 for customers 60 and over), but TD rebates the fee when you keep a minimum monthly balance of $6,000. Below that threshold, a no-fee account costs less.
Can a chequing account earn interest?
Yes, some hybrid accounts pay interest on your whole balance. The EQ Bank Personal Account earns a 1.50% base rate, and 2.75% when you set up recurring direct deposits of at least $2,000 a month. A traditional chequing account usually pays little or nothing.
Can I have more than one chequing account?
Yes, and it often pays off: one account at a bank with branches for in-person services, and a no-fee online account for everyday banking. Keep in mind that CDIC adds up your deposits in the same category at the same institution: two accounts in your name alone at the same bank share the $100,000 limit.
