Want to find the best chequing account?
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Whether you’re new to Canada, new to banking, or looking to make a change from your current bank, there’s a lot to think about when you’re choosing a new chequing account. Dozens of banks operate in Canada, each offering multiple accounts with different fees, and services.
It’s not impossible to navigate, however. If you take some time to simplify your banking habits, you can pinpoint what kinds of features you need in a new chequing account.
There are many different types of chequing accounts (or checking accounts if you're American), and a good place to start is by figuring out which type of account best suits your needs. The most common type of account is a personal chequing account held alone or with another person (e.g. your spouse). There are also accounts geared toward youths, students, and seniors. Note that even if you are a student or senior, you might still get the best deal with a personal chequing account.
There are also chequing accounts with differing levels of service. Basic chequing accounts usually offer a limited number of monthly transactions (10-12) for a small monthly fee (typically under $5). Premium chequing accounts charge much higher monthly fees (up to $30) for unlimited transactions and other special privileges. There are also no-fee chequing accounts that offer unlimited transactions without a monthly fee, but for these you usually have to give up access to premium features or in-person service. Finally, there are also a few interest-earning chequing accounts.
Think about what kinds of transactions you perform most and how many you will need in an average month. Depending on your needs, it might make more sense to go with a premium chequing account to save on fees or get access to certain features.
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In Canada, chequing accounts are offered by several different types of financial institutions. Banks and trust companies are the most popular, followed by credit unions and caisses populaires. Each type of institution has its own unique advantages and disadvantages to consider.
|Type of institution||Pros||Cons|
|Credit unions / Caisses populaires||
Your choice of bank vs. credit union will depend on your personal needs. If you want access to in-person service and advice in your community, you might prefer to join a credit union. If you travel frequently, you may benefit from the large branch and ATM networks of the major banks. If you want to save on monthly fees but don’t mind giving up in-person service, a digital bank may be best for you.
When choosing a chequing account, you’ll want to consider the features of the account itself.
Every provider and account charges different fees for different services. The most commonly charged chequing account fees include:
|Monthly fee||Charged once a month to keep your account in good standing||$5 - $30 per month depending on the features included in the account|
|Transaction fee||Charged per transaction such as point-of-sale purchases||$1 -$3 per transaction|
|Interac e-Transfer fee||Charged to send an Interac e-Transfer||$1 - $2 per transaction|
|Overdraft fee||Charged to allow your account to enter a negative balance||$5 per month - $5 per day your account is in overdraft|
|NSF fee||Charged if your account enters a negative balance in excess of your overdraft limit||$30 - $50 per transaction|
Many banks also charge fees to access an ATM outside of your home network or outside the country, use a teller to perform a transaction, order additional cheques, buy money orders and bank drafts, close your account, and receive a monthly statement by mail. For more details about all the different fees that may apply, read our chequing account fees page.
In order to find out what a particular chequing account will cost you, you need to estimate your total monthly cost. This is done by estimating the number of transactions you’ll perform in a given month, adding the monthly fee, and subtracting any rebates.
To estimate your monthly transactions, think about each different type of transaction separately. Ask yourself how many times you:
Add these up and subtract the number of transactions included in the account. For example, if you make 15 transactions a month and the account includes 10, you’ll pay a transaction fee 5 times.
Once you’ve done this, add in any other transactions that are counted or charged separately. Interac® e-Transfers are the most notorious example of transactions that aren’t included in your monthly limit and are charged at a higher rate than other transactions
Once you’ve determined how much you’ll pay in transaction fees, add the monthly account fee to this total.
Next, subtract any rebates that might apply. For example, some chequing account providers offer a rebate if you keep a minimum balance of at least $2,000 in your account at all times. Others might give you a discount for having other products with the same institution.
Choosing an account that has a slightly higher monthly fee but includes additional transactions or Interac® e-Transfers could help you save money in the long run. Based on this example, an account with a monthly fee of $9.95 that included 15 transactions and 4 email money transfers would save you $4 a month or $48 a year.
You’ve thought about what type of account to choose, what kind of financial institution to go with, the features you need, and the fees you’ll be charged. What other determining factors do you need to be aware of when choosing an account?
It can take some time and effort to find the right chequing account for your individual needs. And as time goes on, it’s a good idea to continue comparing chequing accounts on a regular basis to make sure you still have the best account for you. To make this process easier, use Ratehub.ca’s chequing account comparison tool to see accounts side by side and estimate the total monthly costs based on your unique spending profile.