With there being so many chequing account options to choose from, choosing which one is right for you can get complicated.
What is a chequing account?
Most of our day-to-day banking gets carried out through our chequing or savings accounts. From ATM transactions, deposits, money transfers, and paying bills, you can accomplish most of your banking needs with a chequing account.
Each bank has its services and fees, so you must evaluate all aspects of the account before joining.
It is essential to select a bank that you have access to regularly. If you like to have access to cash often, you don’t want to pay the extra withdrawal fees from other banks’ ATMs.
Consider where the bank is located and the number of ATMs available to the consumers, so you don’t have to worry about adding extra fees. If you go on vacation in nearby cities, find out how accessible ATMs are to you. While you won’t always have your bank nearby, it’s still important to look into how widely spread their reach is.
The Type of Account
What type of chequing account are you looking to get?
- A personal chequing account is the most common and used for everyday uses such as bank deposits, bill pay, cash cheques, and transfers. Some let you earn a bit of interest, and others have a monthly service charge and enable you to make a limited amount of transactions per month. Regular chequing accounts usually have a monthly service fee unless you maintain a certain amount of money in your account.
- Online chequing accounts are from online banks with the same features as a typical chequing account, but it only gives you access to your account online. There is no in-person banking. You can do most things as a regular chequing account, such as cashing cheques, direct deposits, and money transfers.
- A hybrid chequing account – A savings account can act as a chequing account at certain financial institutions. This account provides perks, such as earning interest on your funds – something that’s not available with a regular cheque account. With a hybrid chequing account, you can do everything in one account, so you can avoid opening a separate savings account.
- A USD chequing account – If you often transact with US Dollars, consider a USD chequing account to help you save with exchange fees. This account lets you deposit and withdraw USD funds with zero exchange fees.
What Fees to Expect with a Chequing Account
Fees are an essential part when choosing a chequing account. There are many other fees to consider besides your regular monthly fee.
- Transaction fees – Chequing accounts can come with limits to the number of free transactions. After that, you can end up paying $1.25 per transaction. You might want to consider an unlimited transaction chequing account depending on your transacting needs.
- ATM fees – It will benefit you if you understand the costs involved when making withdrawals from your bank’s ATM, as well as from 3rd party ATMs. You can avoid costly fees with the additional knowledge!
- Interac e-Transfer Fees – You can save a few hundred dollars a month on fees if you find a bank that offers unlimited e-transfers.
- Overdraft fees – Consider a chequing account with overdraft protection to protect you from going into an overdraft.
- Non-Sufficient Fund Fees (NSF) – An NSF charge will get applied if your bank account falls below zero. The cost can easily get to an astounding $40, depending on the bank!
Additional Chequing Account Features
Now that you understand what kind of account will suit your needs, you can begin to narrow down your options according to other features:
- Availability and convenience – Do you like to bank in person and using ATMs or online and mobile functionality? Each bank has unique features that make them convenient for the user. If you bank online, there must be no glitches in their software and online paying systems. When you bank in-person, you will want to decide based on how many branches are in your area.
- Customer service – We live by reviews these days. Have you read a list of bad reviews for a restaurant and decided instead to go to a fast-food restaurant because that way you know what you’re going to get? Read consumer reviews and see whether you can live with the cons and determine whether they have good customer service.
- Product selections – Compile a list of the features the bank offers. If you intend to invest, save, or take out a loan, you want to ensure that the bank provides all those features. What’s great about adding other features, you may qualify for lower rates.
- Minimum balance rates – Many banks require that you pay a monthly service fee unless you meet their monthly balance requirement. This means that you must have the minimum amount set by the bank in your account. Access better features and save money on these service fees!
- Promotions – Banks tend to offer promotions throughout the year. You could win cash bonuses or free giveaways when you join the bank or as an existing customer.
Choosing a chequing account can get quite daunting, as there are so many options available to Canadians. Think of your chequing account as a mobile plan, and only get what you need.
Avoid paying costs towards transactions that come as additional add-ons, which will become costly over the long-run. Consider making a list of what’s important to you in a chequing account, such as payments, withdrawals, deposits, etc., and plan how many of these transactions you could potentially make in a month.
By doing this type of planning, you can see how much you can afford on monthly banking costs and essentially help you make the right choice for yourself.