The Best Chequing Accounts in Canada

Best Chequing Accounts in Canada

Chequing accounts are a bank service people use on a daily basis to manage their cash flow. They can help an individual or company maintain a stable financial life. Even though different banks offer different plans and services linked to their chequing accounts, there are some standard features you’ll find from nearly every provider. Specifically, most chequing accounts help facilitate great banking functions such as money transfers, telephone or online bill payments, electronic salary deposits, and ABM (automated banking machine) transactions, teller transactions, paper cheques, Interac e-Transfers, and debit cards. In most cases, chequing accounts come with minimal or no interest. Their main purpose is to let you easily monitor your cash flow, not necessarily help you save money for future growth.

How Are Chequing Accounts Classified?

Banks in Canada offer six basic types of chequing accounts. Some of their key features vary from bank to bank, but here’s what they generally provide:

Best Personal Chequing Accounts in Canada

A basic or personal chequing account is the most standard type of account. Most come with a set number of transactions per month (a few allow unlimited transactions), as well as some additional functions, depending on your account. In general, the monthly fee ranges anywhere from $4 to $30, based on the number of transactions and features included in your package.

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Best Alternative/Hybrid Chequing Accounts

Some digital banks provide accounts with basic cash management and payment functionality in unison with cashback, earner interest, and other rewards generally associated with credit cards or savings accounts. Like chequing accounts, alternative (hybrid) accounts equip their holder with a prepaid or debit card and support direct paycheque deposits, interact e-Transfers, and bill payments. However, the main differences between alternative (hybrid) accounts and chequing accounts are that the former doesn’t usually support overdrafts, offer paper cheques, provide customer support in bank branches, or render wire transfers. Most customers use alternative (hybrid) accounts along with – and not instead of – traditional chequing accounts, but this may change since the world isn’t relying on actual cash as much as it once did, making cheques somewhat obsolete. KOHO is a great example of an alternative account. It allows its holders to deposit money and later spend it in the form of a prepaid Visa card or through ABM cash withdrawals. KOHO is an attractive option because there are no fees. What is more, prepaid cards allow users to earn cashback the way cashback credit cards do (without the interest penalties affecting customers’ credit scores).

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Best No-Fee Chequing Accounts

No-fee chequing accounts are basic accounts customers can get for free. While they are terrific for clients looking to save some money, no-fee accounts tend to come with drawbacks. To name a few, they have nowhere near as many functions as you’d get with fee-paying accounts, and you can make only a limited number of payments per month. In addition, customers may have to maintain a minimum account balance to avoid being charged a fee. This doesn’t apply to virtual/direct banks because their operational costs are usually lower. As a result, they can offer chequing accounts without monthly fees and few (if any) transactional fees.

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Best Youth Chequing Accounts

These accounts are meant for customers who haven’t reached the age of majority in their province. The holders of youth chequing accounts normally aren’t subject to bank fees and may earn interest over time.

Best Student Chequing Accounts

As the name indicates, student chequing accounts are designed for students, mostly those studying full time. Most of these accounts come with age restrictions that vary from bank to bank, but account holders are generally required to be between 18-25 years old. Student accounts typically charge low or no fees and some of them even include limited rewards and perks.

Best US Dollar Chequing Accounts

U.S. dollar accounts are perfect for people who want to make easy cross-border payments. These accounts typically don’t charge currency exchange fees when withdrawing money in U.S. dollars and allow for simple U.S. dollar transactions.

Who Offers the Best Chequing Accounts in Canada?

There are a bunch of options to choose from when deciding on your chequing account. Apart from the Big Five banks, many other banks offer an online-only account that, nonetheless, has excellent conditions. Here are the five best chequing accounts in Canada:

Scotiabank’s Chequing Account

Scotiabank offers six chequing accounts, including a youth account and a student chequing account. The fees range anywhere from $0 to $30.95 per month, and senior citizens are entitled to a discount. Every Scotiabank account includes a debit card, and customers can select whether they want to earn Scotia Rewards or SCENE® entertainment rewards points for making debit purchases. Out of all the accounts Scotiabank offers, the Ultimate Package stands out. It’s a top-grade combination of advantages geared for people who want to bundle multiple needs under their banking plan. The plan provides significant benefits to its holder:

• Under certain conditions, the chance to earn $300 when opening your Ultimate Package
• Unlimited Interac e-Transfer transactions, Scotia International transfers, and free debits
• Unlimited free withdrawals at ABMs that don’t belong to Scotiabank
• Select credit cards that come with annual fee waivers every year (a maximum of $139)
• One Scotia Rewards or SCENE® point for every $5 you spend on your debit purchases
• Special rate on Scotia’s guaranteed investment certificates (GICs) and additional 0.10% interest on your Momentum PLUS savings accounts
• Waiver of the $30.95 fee if you keep your daily balance at $5,000 or over.

Tangerine’s No-Fee Daily Chequing Account

Unlike Scotiabank, which offers as many as six chequing accounts, Tangerine doesn’t have a wide range of accounts for its users. In fact, there’s just one chequing account you can open, and it’s called Tangerine No-fee Daily Chequing Account. Nevertheless, the fact that Tangerine has focused on just one account has allowed them to provide great value for their customers. More specifically, account holders aren’t subject to any fees, and the interest earned works through tiered rates, starting at 0.15% for any balance. Other benefits of this account include unlimited money transfers, Interac e-Transfers, and daily transactions. You can also carry out banking operations online or by phone. Moreover, using Scotiabank’s ABM machines comes without fees worldwide. Customers can also access contactless payment, and Apple Pay with their debit cards. Lastly, once you open your chequing account, you get one cheque book for free.

BMO’s Chequing Account

BMO has quite a diverse portfolio of chequing accounts, and all of them allow you to make unlimited Interac e-Transfers. The lowest fee is $4, whereas the highest fee sits at $30 per month. The fee can be waived, provided you keep the minimum account balance BMO stipulates. The bank also provides a free chequing account and special discount rates for the following groups:

• Children younger than 13
• Students
• Youth between 13 and 18
• Canadian Defence Community members
• Canada’s new immigrants

Out of all five plans, the Performance Plan might be the best option from BMO. The monthly fee stands at $15.95, but it can be waived if your monthly balance is a minimum of $4,000. In addition to the abovementioned perks, the plan includes one free withdrawal from non-BMO ABMs per month. There’s also standard overdraft protection that costs $5 a month.

TD’s Chequing Account

On top of four personal accounts, TD also has a student and a youth chequing account. The basic plan goes for $3.95 per month, while the most expensive plan stands at $29.95, but there are rebates if you keep your account balance at a minimum of $5,000 or $2,000, respectively. The youth and student accounts charge no monthly fees. One of the reasons why TD is a good choice is that it offers terrific U.S. dollar accounts. TD provides two types of chequing accounts, which isn’t common in Canada: the Borderless plan and the TD U.S. Daily Interest Chequing Account. The latter charges no monthly fees while facilitating cross-border transactions, exchanges, and bill payments. The threshold for calculating daily interest is $1,000 and starts at 0.01%. The interest increases in tiers (up to 0.05$) on all balances over US$60,000. There are no monthly fees for this account which gives you access to 10% savings for your TD Travel and Medical Insurance. Additionally, there are no transaction fees if your account’s minimum balance is $1,500.

RBC’s Chequing Account

RBC offers five chequing accounts, one of which is meant for youth. The fees range anywhere from $4 to $30, with senior citizens eligible for discounts. The most expensive account comes with many handy features and excellent rebates. Moreover, all five accounts contain rebates on credit card fees or multiple products. Furthermore, chequing account holders receive debit cards, access to overdraft protection, and a mobile app. We highly recommend that you check out their Day to Day Chequing Account. The fee stands at just $4 per month. The plan includes 12 free monthly debits, unlimited Interac e-Transfers, additional transactions for $1 each, and the option to connect an RBC debit card to earn Petro-Points and save money at Petro-Canada. You can waive the fee, fully or partially, if you meet one of the following three conditions:

• You have at least two products from RBC in one region.
• You’re a senior citizen.
• You’re a beneficiary of the Registered Disability Savings Plan.

Why Should You Open a Chequing Account?

The main reason why you should open a chequing account is to make your transactions more secure. Chequing accounts are efficient tools for receiving payments and holding them securely. Storing cash around your house isn’t safe, as the chances of losing or misplacing your money are high. On the other hand, chequing accounts are a simple way for your friends and employers to send you money, and you don’t need to worry that the funds might be lost somewhere during the process Most people are eligible for basic chequing accounts, but banks might reject applicants with a record of prior account mismanagement at previous banks. In this case, you should consider some other payment options, such as a prepaid debit card. If you want to apply for a chequing account, don’t forget that different types suit different individuals better. To select the best account for you, compare your options carefully and see if the accounts have some features you particularly need.

Expected Chequing Account Features

Although the features offered by different personal chequing accounts may vary, one underlying factor to keep in mind is that any transaction you conduct that is not included in the original package will incur an additional transaction fee. Depending on the type of account you have, you may receive facilities that include a fixed number of transactions each month or an unlimited number of debit transactions.

Typical Chequing Account Fees

In case you conduct additional transactions than the allotted limit per month or different kinds of transactions that are not included in the personal chequing account package, you’ll incur an extra service fee. Like, for instance, charges like non-bank ATM fees or Interac e-Transfers fees. You should learn how to avoid common chequing account fees.

When Should You Opt for a Personal Chequing Account

Under certain conditions, opting for a personal chequing account is a smarter option. Like, for instance,

• You need a premium account: Getting a premium account may cost you higher monthly fees but it is ideal if you have extensive banking needs that can be covered in the fee. In this way, you can avoid the additional service charges you’ll have to pay for the different transactions you need to make each month.
• You don’t qualify for a seniors’, youth, or student account
• You’re looking for economical banking services: You can use the personal chequing account to make major savings on the service fee by restricting the number of monthly transactions to the allocated number. You’ll pay additional fees only if you make more transactions.

When Should You Not Opt for a Personal Chequing Account

Given your particular needs, you may find that a personal chequing account is not viable for you. For example:

• You qualify for youth, student, or seniors’ account.
• The savings account is sufficient for the transactions you need to make and other banking requirements.

How Do You Choose Your Chequing Account?

Before you decide on a chequing account, consider the following details:

The Number of Monthly Transactions

If you plan on making a large number of transactions every month, Scotia’s Ultimate Package might be the best option. It gives you access to unlimited monthly transactions for a $30.95 fee. You can even avoid paying the fee if you keep your balance over $5,000. Conversely, customers who make fewer transactions may be better off with the Everyday Chequing Account offered by CIBC. The number of transactions is limited to 12, and the fee stands at $3.90.

The Means of Carrying Out Your Banking Transactions (in Person, via Phone, or the Internet)

This is another aspect that varies by bank. Some financial institutions offer multiple ways of making your payments. For instance, Tangerine’s No-fee Daily Chequing Account comes with no monthly fees for unlimited email and daily transfers, online banking, and e-statements. Nonetheless, the bank offers limited in-person services, which is why it’s more equipped to serve customers who prefer doing banking online. Other providers have in-person services. A good example is RBC’s No Limit Account, where the unlimited transactions are assisted by a teller and come with a $10.95 monthly fee.

The Expected Monthly Balance

Some accounts offer tremendous benefits for keeping a minimum balance every month. For example, TD’s Minimum Chequing Account revokes monthly fees if you maintain your minimum balance at $2,000 or more. Additionally, BMO has a Premium Plan that’s a bit more demanding – the minimum balance is $6,000, which is also the point where the bank waives your $30 fee. There are also substantial perks to opening your account with BMO, making this option quite attractive.

Fees or No Fees

Another detail you need to take into account is whether or not you have to pay monthly fees, regardless of your account balance. If you want to avoid paying fees, you may want to try Tangerine’s No-fee Daily Chequing Account. It charges no fees for your unlimited self-serve payments.

Interac e-Transfers and Other Features

If you expect to make many Interac e-Transfers, you want to get an account that won’t subject you to a high fee for doing so. To that end, we suggest checking out BMO’s chequing accounts since all of them come with no fees for Interac e-Transfers. There’s also their simply named Practical Chequing Account that includes a $4 monthly fee.

US Dollars Availability

People who travel to the U.S. often may want to open an account that’s designed for their needs. For instance, TD’s Borderless Plan provides quick exchange between Canadian and U.S. dollars for a $4.95 fee, as well as unlimited transactions. Another great option is RBC’s US Personal Account. It lets you make six transactions per month in Canadian or U.S. dollars for $2 a month.

Earning Cashback/Rewards on Purchases vs. Earning Interest on Your Chequing Balance

Whether you want to make money on purchases or the account balance, open your account with a bank that offers the desired features. For example, Tangerine’s No-fee Account offers 0.15% interest on account balances. In contrast, Scotiabank’s chequing accounts earn reward or SCENE® points on your debits.

FAQs

What Is a Chequing Account?

Chequing or everyday accounts are cash accounts customers hold with banks or other financial institutions. These accounts give the holder the right to make immediate transactions, such as deposits, money transfers, bill payments, debits, and withdrawals. You can make your transactions in person (at a branch) or online.

Are Chequing Accounts Free?

The institution administering your chequing account may charge you a monthly fee and fees for making too many monthly transactions. But if the holder keeps a minimum balance every month, there are few, if any, fees for using their chequing account.

Does a Chequing Account Earn Interest?

Only a few Canadian chequing accounts may earn some interest. Still, their levels pale in comparison to interest you can make from some savings accounts. Also, you’re more likely to find a chequing account that earns interest in an online bank than in a brick-and-mortar one.

Are Savings and Chequing Accounts the Same?

On the one hand, a chequing account’s main purpose is to facilitate banking transactions, such as cheque deposits, debits, and ABM withdrawals. On the other hand, people set up a savings account to gain access to long-term cash repositories they can use in emergencies. The money in your savings account is used when making loans, and the banks reward holders of these accounts with interest payments.

Final Thoughts

Today’s world of banking offers Canadians a large number of attractive chequing account options. If you want to stop being charged fees for making basic transactions, you should consider various competitive offers by banks vying for more customers. Opening a chequing account will give you remarkable benefits, including reliable security. Consider the features you need from your account to determine which plan offers the most favorable conditions.