There are a number of chequing account options in Canada. So which one is right for you? Here’s a look at the various types of chequing options available. Also, you’ll find a list of the top Canadian chequing accounts that pay a higher than average interest rate.
What is the difference between a chequing account and a savings account?
A chequing account is designed to handle your everyday transactions, such as making purchases, handling monthly payments, and accepting direct deposits. A savings account is designed to hold your money for a long period of time. Usually, it is a good idea to have both a chequing and a savings account.
Types of chequing accounts
Here’s a look at the six major types of chequing accounts that you will find in Canada. Each one of these chequing accounts offers unique benefits to specific types of customers. Carefully consider the benefits of each before making your final decision.
1). Personal chequing account
If you are looking for a standard chequing account, you will want to opt for a personal chequing account. Just about every bank and financial institution offer personal chequing account options. Usually, these types of accounts will come with a monthly fee. The fee can range anywhere from $4 to $30, depending on the level of service provided.
2). No-fee chequing account
Looking to avoid fees? You can also opt to open a no-fee chequing account. With a no-fee chequing account, you will usually forgo some of the features offered by personal chequing accounts. Also, you will have to maintain a minimum balance to avoid paying any maintenance fee. One exception to these rules is Neobanks.
Neobanks are banks that have no physical branches. A Neobank’s low overhead can offer fee-free chequing without a minimum balance requirement and many features.
3). Hybrid account
Due to the new types of financial institutions available in Canada, several hybrid chequing accounts offer unique features. For instance, you can open a hybrid account that offers you money management services along with a pre-paid cheque card.
If you don’t want to use paper cheques, you should consider what a hybrid account offers.
4). Student chequing account
Students trying to save on chequing account expenses will want to look at student chequing accounts. These chequing accounts tend to have lower fees and lower minimum account balances. Usually, student chequing accounts are available to those between the age of 18 and 25.
5). Youth chequing account
An account holder can open a Youth Chequing account with a parent or a guardian as a co-signer for those under adult age. These accounts usually have lower fees, and many come with some unique perks.
6). US dollar chequing account
There are US dollar chequing accounts available for those who make many transactions across the US border. With these types of chequing accounts, you can withdraw your money in US dollars.
Also, you can easily pay for transactions in US dollars and avoid foreign exchange fees.
7). High-interest chequing account
Right now, interest rates are at a historic low. Because of that, you can earn next to nothing on your money. However, some chequing accounts offer a high-interest rate on your money.
Typically, you will want to look at online-only banks – also known as Neobanks – that can pay a high-interest rate due to lower overhead.
Finding the right chequing account for you
Now that you are familiar with the range of Canadian chequing options available, you may be wondering which chequing account is right for you.
Here are some questions that you should consider before making your final decision.
How often do you use your chequing account?
If you don’t use your chequing account often, then you may want to opt for a no-fee checking account that allows you to save a little money. If you use your chequing account often, consider a personal chequing account to a hybrid chequing account.
What is your average daily balance?
If you keep a low average balance on your chequing account, you will want to make sure that you have an account that will not charge you a maintenance fee.
If you maintain a higher account balance, then you may want to consider a no-fee chequing account.
Do you move around a lot?
Do you expect to move across the country in the next couple of years? Then you may want to consider a Neobank that offers a hybrid chequing account.
With a hybrid account from a Neobank, you don’t have to worry about the nearest branch location in a particular part of Canada. All of your services will be available online.
Do you need to access US dollars?
If you visit the United States often, you will want to consider the convenience that a US dollar chequing account offers. Or a credit card with no foreign transaction fee.
Is high-interest important for your chequing account?
Looking to get more money from your chequing account balance? Then you will want to look at high-interest rate chequing accounts. With high-interest chequing accounts, you will usually have to maintain a high balance to qualify.
Do you want cash back rewards on your chequing account?
If you want to get a cash-back reward from your chequing account, then you should carefully take a look at the features offered by various chequing accounts. Some banks offer special accounts with cash-back rewards on certain purchases.
Best chequing accounts in Canada
Looking for the best chequing accounts in Canada? Here’s a look at the best chequing accounts in the country:
- Scotia Ultimate Package
- Tangerine No-Fee Daily Chequing
- HSBC Advance Chequing Account
- BMO Performance
Finding the right chequing account in Canada
Be sure to carefully consider all the features that you are looking for from a chequing account. Don’t be afraid to consider accounts from Neobanks, which may offer you a higher interest rate. The right chequing account can make it easy for you to manage your payments and handle your money.