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:
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.
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.
The thing about online-only chequing accounts is that they’re online only. There are no physical branches, which eliminates the option of speaking to someone in person to address any problems you might have. Instead, you’ll rely on the mobile apps, online banking, phone support, and the ATM network. Before you choose your online chequing account, ensure there’s an 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.
- What Features Should I Look for in a Chequing Account?
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