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What to Consider When Choosing an Online-Only Chequing Account

There are many factors that go into choosing your financial products, and with the explosion of fintech here in Canada, you’ve never had more options than you do today.

But for each category of online financial product, there are a variety of pros and cons, and you should carefully evaluate your needs before choosing the right product for your unique situation.

This advice holds true when choosing an online-only chequing account. I’ve been using an online-only chequing account for years now. But I didn’t just go out and choose one, I did my research and figured out which account was best for me. Here are some factors you should consider when choosing yours:

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One of the big draws on online-only chequing accounts is that they have low fees or no fees at all. Typically, there will be no fees for cash withdrawals, online purchases, debit transactions, or transfers between your chequing account and any savings account you may have with the same financial institution.

That said, make sure to carefully review the banking agreements for these accounts because there may still be fees incurred. For example, an online chequing account may not have overdraft protection and may charge you hefty fees for overdrawing the account. Other high fees may include insufficient funds fees or failed electronic transfers.

While online-only chequing accounts tend to be well known for not having a monthly fee, they aren’t the only accounts to choose from if this is a priority for you. There are many credit unions and traditional banks that offer no-fee banking. For example, there are several CIBC chequing accounts that offer unlimited transactions with no fees. Just make sure to read the fine print to ensure you qualify for those accounts, as some of them are limited to students or those over the age of 60.

Read:CIBC chequing accounts and chequing account

Interest rates

If you plan to hold a large amount of cash in your online chequing account, you should do your research and prioritize an account that offers a competitive interest rate. Fortunately, online-only chequing accounts are well known for their higher interest rates. Make sure to double check if there are any minimum balances required to earn the higher interest rates, and do your due diligence and check to see if any local banks or credit unions offer chequing accounts with higher interest rates.

Read:How to Avoid Common Chequing Account Fees

ATM networks

Because many online-only banks are still owned by larger financial institutions, you'll still be able to use those ATMs to take out and deposit cash. For instance, Tangerine customers can use their card at any Scotiabank ATM with no fee, as Scotia is their parent company. Before you choose your online chequing account, however, you should ensure there’s a corresponding ATM near your home so you won’t be tempted to use the fee-based machines, which will ding you up to $3.50 per withdrawal.

Most credit unions belong to the Ding Free network, which is a group of 1,800 ATMs across Canada. Traditional banks usually have good coverage in cities, but may be less plentiful in smaller towns.

Brick-and-mortar locations

For some, one big downside to choosing an online-only chequing account is the lack of access to brick-and-mortar locations. Big banks allow you the ability to walk into one of their physical buildings and speak to a representative face-to-face, but online-only institutions can usually only offer help via phone or webchat, which may be a dealbreaker for certain customers who don't want to deal with long wait-times to speak to someone.

That being said, many online-only institutions offer excellent troubleshooting and FAQ sections on their websites, and their customer service is usually just as good as anyone you'd see behind a desk (it just may require a bit more patience).


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