Chequing accounts

From: Financial Consumer Agency of Canada

You can use a chequing account to manage your day-to-day transactions. It usually has lower transaction fees than a savings account.

Chequing accounts usually:

  • include the use of a debit card to access your money at ATMs
  • include the use of a debit card to make purchases in-store at a merchant
  • include cheque-writing privileges
  • don’t pay interest on deposits

Types of chequing account transactions

Some financial institutions may charge higher fees for transactions done with the help of a teller or bank employee.

Contact your financial institution to learn about what fees apply to different types of transactions.

Teller-assisted transactions

Teller-assisted transactions are those made with the help of a teller, usually in-branch, such as:

  • withdrawals
  • transfers between accounts
  • bill payments

Self-serve transactions

Self-serve transactions are transactions that you make without the help of a teller, such as:

  • withdrawals at an automated teller machine (ATM)
  • transfers between accounts at an ATM, by telephone or on the Internet
  • bill payments at an ATM, by telephone or on the Internet
  • writing cheques
  • debit card purchases at the point of sale (for example, at a store)
  • deposits at an ATM
  • pre-authorized debits

Some financial institutions consider transactions made over the phone with the help of a customer service agent to be teller-assisted. Ask your financial institution about its policy on self-serve transactions.

Find out what fees you'll pay at an automated teller machine (ATM).

Monthly account fees

Your monthly banking fees will largely depend on your account or package.

Paying a set monthly account fee

With a monthly fee account, you pay a set fee each month. This allows you to make a certain number and type of transactions each month. The number and type of transactions included in your monthly account fee depend on your account. You must pay for every extra transaction over the number of transactions that your monthly banking package allows.

Some accounts will waive the monthly fee if you keep a minimum monthly balance in your account. This can be a good way to save on banking fees. For example, if you pay $12 per month in fees, and your bank will waive this cost if you maintain a minimum balance of $2,000, you could save $144 per year.

You may also qualify for a multi-product discount if you have more than one banking product with your financial institution. For example, you may get a discount if you have both a mortgage and a credit card with the same financial institution.

Check with your financial institution to find out if you qualify for one of these service packages or discounts.

Paying per-transaction

With a “per-transaction” or “pay-as-you go” account, you pay for every transaction you make. Fees can add up fast. Consider the number of transactions you make per month before deciding if a per-transaction account is right for you.

Low-cost and no-cost accounts

Certain financial institutions have signed an agreement with the federal government to offer low-cost accounts with basic features and lower pricing.

Find out if you’re eligible for a low-cost account.

Changes to your account service fees

A financial institution can change its account service fees at any time. However, federally regulated financial institutions must tell you ahead of time of any increases to existing fees or new fees.

Financial institutions must also make available to you a list of all the service charges that apply to your account. For example, these may include fees for non-sufficient funds (NSF) cheques. Ask for a copy of this list.

If your financial institution didn’t tell you about these changes, file a complaint.

Learn how to make a complaint.

Save money on banking fees

Consider the following when trying to save money on your banking fees:

  • stay within the number of transactions allowed by your service package
  • keep a minimum monthly balance at all times during the month if your service package waives your monthly fees when you do so
  • know that you may be charged the full monthly fee and a transaction fee for every transaction you make if your balance drops below the minimum balance you need to keep, even if only for one day
  • use services, such as electronic and self-serve transactions (online and telephone), that usually cost less than in-branch transactions
  • use the ATMs of your own bank or credit union to avoid paying a fee for withdrawals made at another financial institution’s ATM
  • keep enough money in your account to cover bill payments and cheques written on your account because this will help avoid charges for NSF cheques or overdraft protection

To save money on ATM withdrawal fees consider doing the following:

  • consider how much cash you need to carry
  • consider using your debit card for in-store purchases because you're not usually charged a fee when paying by debit in-store
  • ask for cash back from your account when making a debit card purchase in stores that offer cash back free of charge

Talk to the staff at your local branch if you need help understanding your account charges.

Shopping for a chequing account

Before you start shopping around for a chequing account, consider:

  • what types of services you’ll use
  • how you’ll want to access the money in your account
  • how often you’ll want to access the money in your account

Step 1: Identify your banking habits

Figure out how you bank to learn what type of chequing account will work best for you.

Consider how often you bank

Think about how many transactions you make in a typical month. Review your records.

Count how many times you make each of the following transactions:

  • cash withdrawals
  • bill payments (online, by cheque, over the phone, or in person at a branch)
  • debit card purchases
  • email money transfers
  • pre-authorized debits
  • pre-authorized transfers to a savings account such as a Tax-Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP)

Adding up each type of transaction can help you figure out how many monthly transactions you need to have included with your banking package.

For example, if you make only a few transactions each month you may not need to pay more for a package that offers unlimited transactions.

Consider where you bank

Note how many of your transactions you make using:

  • ATMs
  • online
  • telephone
  • in-branch

If you mostly use ATMs: search for a financial institution that gives you access to ATMs in places you'd use them regularly.

If you mostly use online or mobile banking: find out what options are available through the bank you're considering.

If you mostly bank in-branch: look for a financial institution that has branches in your area and business hours that fit your schedule.

Think about what features you need

Paying extra money for a service you use regularly can be costly.

Look at how often you need services that cost extra, such as:

  • email money transfers
  • personalized cheques
  • overdraft protection
  • safety deposit boxes
  • money orders

Search for a chequing account that includes services or products you use often as part of the monthly fee or offers them to you at a discount.

Think about other features that may be of value to you. For example, you may be willing to pay a little more for an account that offers services such as:

  • an online spending tracker
  • email alerts when money is withdrawn from your account
  • no annual fee on a credit card

Step 2: Shop around

Once you’ve thought about the services you need, find out how much it will cost to get those services.

Start by looking at no-cost or low-cost accounts to see if they meet your needs. Consider the benefits of these accounts if you make very few monthly transactions or don’t need many extra services.

Compare if it would cost less for you to:

  • get an account package for a fixed fee that includes an unlimited or specific number of transactions each month, or
  • pay for each individual transaction

Use the Account Comparison Tool to find the account that best suits your needs.

Step 3: Make the final decision

Make sure you understand what is included in the account and how much you'll pay.

Ask about:

  • the monthly fees
  • the number and types of transactions included in the monthly fees
  • extra fees for certain types of transactions, such as transactions made with a teller
  • fees that apply to transactions that are more than the monthly transaction limit
  • fees if you go into overdraft
  • the interest rate if you go into overdraft
  • reducing or waiving fees if you keep a certain balance in the account
  • a discount on fees if you have other products with the financial institution
  • a discount on fees if you're a youth, senior, newcomer to Canada or a student
  • extra fees you pay if you use another financial institution’s ATM

Make a choice based on the services that are important to you, including:

  • cost
  • customer service
  • ease of use

Review your needs and preferences from time to time. Find out if your financial institution, or another one, offers a chequing account with similar features to your own. Another financial institution may offer a similar account for a lower monthly fee or no monthly fees.

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