What is a chequing account? Discover details and how to use it

In the financial world, the chequing account is a fundamental tool for many people. 

However, despite being present in all banks, not everyone has a complete understanding of what a chequing account is and how to make the most of it. 

In this article, we will bring you what a chequing account is and how you can open yours. Follow along and find out.

So, what is a chequing account?

A chequing account is a type of bank account offered by financial institutions to facilitate the daily management of an individual’s or company’s money. 

It serves as a central hub for financial transactions, allowing deposits, withdrawals, transfers, and bill payments. 

Essentially, a chequing account is a fundamental tool for managing everyday finances. 

It offers easy access to money, whether through ATM withdrawals, online bill payments, or electronic transfers. 

Additionally, many chequing accounts come with a linked debit card, allowing purchases in physical and online stores. 

Chequing accounts also often offer additional features such as checks (for payments and transfers), bill payment services, and access to apps and online platforms to monitor and manage finances. 

It is important to note that chequing accounts can have different features and associated fees, depending on the financial institution and the type of account chosen. 

Some accounts may charge monthly maintenance fees, while others may be free as long as certain requirements are met, such as maintaining a minimum balance or making a minimum number of transactions per month.

Know the monthly fees of the account

The fees associated with chequing accounts can vary significantly depending on the financial institution and the type of account chosen. 

Here are some of the most common fees you may encounter:

Fixed monthly fee

Many chequing accounts charge a monthly maintenance fee, which is a fixed amount that the bank regularly charges for providing services associated with the account. 

This fee may vary depending on the type of account and the services included, but typically ranges from a few dollars to several tens of dollars per month.

Transaction fee

Some chequing accounts may charge a transaction fee, which is a fee applied each time you make a specific transaction. Such as ATM withdrawals, electronic transfers, check issuance, or bill payments. 

These fees may vary depending on the nature of the transaction and the bank’s policy.

Free accounts

Some financial institutions offer free chequing accounts, which do not charge monthly maintenance fees or transaction fees. 

These accounts are usually available to customers who meet certain criteria, such as maintaining a minimum balance, and making a minimum number of transactions per month. 

Or even linking other financial products, such as credit cards or investments, to the chequing account.

Learn about the types of chequing accounts

There are several types of chequing accounts available in the market. Here are some of them and the differences between them:

• Traditional Chequing Account: The most common option, ideal for day-to-day transactions such as payments, transfers, and withdrawals. It offers a debit card for purchases and access to online and mobile banking services. It may have monthly or per-transaction fees, depending on the bank and the chosen service package.
• Interest-Bearing Chequing Account: Similar to the traditional account, but offers interest on the available balance, usually in the form of interest. It may have lower yields than savings accounts but allows greater flexibility for money movement.
• Digital Chequing Account: Managed exclusively through digital channels, such as apps and internet banking, without physical branches. It generally offers lower fees and greater convenience in accessing services.
• Joint Chequing Account: Allows two or more account holders to share the same account, with joint access to resources and services. Useful for couples, families, or friends who wish to manage finances together.
• Student Chequing Account: Aimed at university or high school students, with specific fees and benefits for this audience. It may offer tuition discounts, access to promotions, and additional services.
• Business Chequing Account: Designed to meet the needs of businesses and self-employed professionals. It offers tools and specific services for business financial management, such as checkbook issuance and transfers to suppliers.

Differences between the chequing account and the savings account

Chequing and savings accounts are two types of bank accounts with different purposes. 

The chequing account is ideal for daily transactions, offering easy access to money and facilitating deposits, withdrawals, and bill payments. 

The savings account is intended for long-term saving, providing a higher interest rate and being suitable for accumulating funds for future goals. 

In this way, the chequing account is for daily transactions; the savings account is for saving. The chequing account offers immediate access to money; whereas savings may have withdrawal restrictions. 

Chequing accounts may have monthly and transaction fees; savings accounts generally have fewer fees. 

Another issue is that chequing accounts offer low or no interest rates; savings accounts offer higher interest rates. 

Both accounts have their benefits and are often used together to meet individuals’ varied financial needs.

How to open a chequing account?

Opening a chequing account in Canada is a relatively simple and quick process, which can be done online or in person at a bank branch. 

Compare the available options and choose the bank that best suits your needs. Then, access the chosen bank’s website and look for the section on opening chequing accounts. 

Fill out the online form with your personal information, such as name, SIN, address, and contact details. 

Submit photos of your identification documents (passport or Canadian driver’s license) and proof of residence (utility bill, water, internet, etc.). Create a strong password to access your online account. 

The bank will analyze your data and documents and inform you of the analysis result shortly. If your account is approved, you will receive instructions to finalize the opening, such as setting a date to receive the debit card. 

To open your account at a branch, go to a branch of the chosen bank with your documents in hand. 

Inform the manager that you want to open an account, and he will give you the necessary instructions. 

Present your identification documents (passport or Canadian driver’s license) and proof of residence (utility bill, water, internet, etc.). Fill out the account opening form with your personal information. 

Remember that the requirements and procedures for opening an account may vary depending on the bank. 

Check the website or contact the chosen bank for more information. With these tips, you’ll find out what a chequing account is and how to get yours. Check out more tips for you on our website.