There are many different types of bank accounts you can open up in Canada. One of those options is the chequing account (or checking account). With this account, users can instantly access the funds that they’ve previously deposited. But this account can also be used for payments with account information, checks, or a debit card. In general, people use these accounts for their paychecks and as their main financial hub. All banks in Canada offer chequing accounts. Some of them are free, while others come with fees. Here’s what you need to know about them.
Chequing Accounts Explained
These accounts are deposited accounts offered by various banks and credit unions. Users can freely deposit and withdraw their money as they please without any fees. They offer a lot of liquidity, and you can access them through: Debit cards, ATMs, Cheques, and Electronic Cheques. These accounts are meant to be used daily. Since they have no limitations in terms of deposits and withdrawals, these accounts also rarely offer any interest. There are several types of chequing accounts: Personal or commercial accounts, Business accounts, Student accounts, and Joint accounts. Also See: Banking in Canada
Chequing Account Features
These accounts are probably one of the most popular types of bank accounts in Canada. They come in many shapes and sizes. However, here are some of the most important features to look for in one:
- Automatic Payments. Most accounts offered today let you set up automatic payments. They can be used for recurring expenses like rent, bills, or some monthly installments.
- Security. Banks usually have several security features with these accounts, including account monitoring, chips, photo ID verification, etc. You can even add virtual locks to reinforce security further.
- Debit Card. If you have a chequing account, you need to get a debit card for it. This card lets you pay for anything easily without having to go through the trouble of writing checks or carrying money with you. Whenever you use a card, you will spend money from your account, simple as that.
- Direct Deposits. Direct deposits are an easy and safe way to receive a paycheck into your account instantly. You don’t have to lift a finger.
- Online Banking. All of the top banks in Canada offer online banking. You can even find completely online banks that offer lower fees for chequing accounts.
Benefits of Chequing Accounts
The chequing accounts are very versatile and liquid, which is why they offer lots of benefits:
- Easier Money Management. Adults and kids can quickly learn financial responsibility and see what they are doing with their money. You will see all the bills, payments you’ve made, and how you are spending in general.
- Improve Credit Score. If you maintain a chequing account properly, it can help boost your score. Pay bills regularly, don’t make any bounced checks, and ensure that your balance isn’t zero, and you will demonstrate financial responsibility.
- Get a Debit Card. It’s always a good thing to use a card. Stop carrying cash with you and make your payments easier.
- Earn Through Interest. Some chequing accounts are high-yield, meaning that they offer interest when you earn money. However, this earning potential is only possible if you have lots of money on your balance.
Chequing Accounts Advantages
- Tracking your spending
- Potential to earn through interest
- Low or no ongoing costs
- Get rid of cash
- Easier money management
- Build credit score
Chequing Accounts Disadvantages
- Your account can be blocked
- Not all account activities are reported to credit bureaus
- They can have fees
The Bottom Line
Chequing accounts are essential for money management and payments. If you want to pay with a card, set up recurring payments for bills, and track your spending, you can’t go wrong with this account type. It’s no wonder why they are so popular. These accounts come basically at no cost and make your life a lot easier. However, before getting one, make sure to read all of the conditions set by the bank.