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What is a Chequing Account?

If you need to pay bills or want access to your money quickly, you’ll probably need a chequing account. This type of account is meant for spending and not saving.

Chequing vs. saving accounts

A chequing account can be used for a number of things, such as bill payments, debit transactions, or pre-authorized payments. You can access your money easily through the financial institution’s ATMs and you can also write cheques.

With a savings account—such as a high-interest savings account—you may have limited access to your funds. In other words, you might not have ATM access or it may take one business day to transfer funds from your savings account to your chequing account.

And chequing accounts usually pay little or no interest whereas interest rates on a high-interest savings account can be as high as 2%.

Chequing account fees

Fees on chequing accounts vary depending on the features and the number of transactions you want. For example, the monthly fees on a basic account are less than $10 a month at most financial institutions and come with a limited number of transactions. Or you can spend as much as $30 a month for an account that provides a large variety of features and unlimited debit transactions. These monthly fees can sometimes be reduced or waived if you keep a minimum monthly balance in the account or if you have a mortgage, investment account, or credit card with the same financial institution.

Some of these fees can be avoided if you choose an online bank. For example, both the PC Financial No Fee Bank Account and the Tangerine No Fee Daily Chequing Account have no regular monthly fees and no minimum monthly balance requirements. The accounts also offer an unlimited number of withdrawals.

There are also other fees you may have to pay if you have a chequing account, such as:

  • Additional transaction fee—You may be charged a fee if you have a certain number of monthly transactions and you go over the limit.
  • Withdrawal from another financial institution’s ATM—You’ll usually have to pay a fee when you withdraw money from an ATM not belonging to your financial institution.
  • Monthly statement fee—If you want a paper statement from your bank, it’ll cost you money to receive one.
  • Additional cheques fee—When you run out of cheques and need to order new ones, you may have to pay for more cheques.
  • Non-sufficient funds (NSF) fee—If you write a cheque but you don’t have enough money in your account to pay for it, you’ll pay this hefty fee.
  • Overdraft protection—If you want to avoid paying an NSF fee, you should get overdraft protection but there’s a small fee for this coverage.

The bottom line

Chequing accounts are essential if you want to pay bills or withdraw money easily. Before choosing an account, make sure you shop around for an account with all the features you need. Keep in mind that paying a large monthly fee can end up costing a lot over the long run.

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