In Canada, chequing accounts are offered by most banks for a minimal fee or no fee at all. The introduction of advances in electronic banking has prompted many people to use chequing accounts to enable them to set up automatic payments for routine monthly expenses through a one-time setup system.
Chequing accounts are basically transactional deposit accounts that are held at a financial institution and allow withdrawals and deposits. They are different from bank accounts in that they allow for both numerous withdrawals and unlimited deposits. With savings accounts, these provisions are limited at times. Chequing accounts are also cheap to operate because they do not charge high-interest rates.
We recommend the below chequing accounts
Specification: TD Bank Every Day Chequing Account
Benefits of opening a Chequing Account
Chequing accounts can benefit you in a number of ways. They can help you pay bills, allow you to use the debit card and also help you write a cheque. Online chequing accounts are even better than ordinary chequing accounts. They offer similar services at lower bank service charges plus they come with additional bonuses. Here is how you can open a chequing account online:
- Start by conducting research to find out the services being offered by different banking institutions in Canada and then decide which one suits you best. Some banking institutions charge a monthly fee for their chequing account while others are free.
- The next step would be for you to sign up for an online account.
- You would need to complete an application form. Have your Social Insurance Number and an email account ready.
- Set up a login username and a password
- When applying for a chequing account online, you need to be very careful. Ensure that you have read the terms and conditions. This will help you avoid any with hidden fees. There are some online chequing accounts that charge interest fees, therefore, ensure that you’ve fully understood the terms and conditions.
How to Open a Chequing Account
Opting for a chequing account for your banking needs is a smart idea because it’s easy to open and begin using. Banks typically need you to submit some kind of identification and a few other details. They might also allow you to open an account by logging on to their website. Read ahead for information on the possible snags you could encounter and how to get over them.
Who can open a Bank Account?
The law gives you the right as a Canadian citizen to have and maintain at least one personal bank account so you can keep your money safe in a bank instead of cash in hand. To open a chequing account, you need not go through credit checks or hold a regular job or even keep a minimum balance in the account. Even users that have declared bankruptcy in the past or have a little cash to deposit can make use of this banking product.
Bank account application requirements
You can open a chequing account by visiting the bank’s physical or virtual branch. Here’s how:
- Submit an online application by logging on to the bank’s website.
- Alternatively, you can visit a branch close to you and submit the application.
Here’s the information they’ll request.
- Your name
- Date of Birth
- Contact information such as a phone number, address, email ID.
- Two proofs of identification
What type of ID can be provided?
Should you choose to apply online, you’ll need to submit your social insurance number that serves as identification. The second mandatory ID can be any one of the following documents:
- Driver’s license
- Old Age Security card
- Valid Canadian passport
- Birth certificate issued in Canada
- Permanent Resident Card or Certificate of Canadian Citizenship
- Provincial or territorial health insurance card
- Certificate of Indian Status
In case you cannot provide any of the identification listed above, you can submit a debit or credit card that carries your signature. As a final option, have the bank official contact someone who can verify your identity.
Do I need money to open a chequing account?
You need not make an initial deposit to open a chequing account with most of the banks in Canada. However, many banks levy a monthly fee so you might have to deposit enough cash to cover the fee or you could be held liable to pay an NSF fee.
What if I’m new to Canada?
If you have just moved to Canada, the procedures for opening a bank account may vary according to the stage of your moving procedure.
- If the move is still in progress, you can apply for the opening of a bank account 75 days before you’re due to arrive. Request your current bank for two documents such as the Certificate of Identity and Letter of Directions. Get your lawyer to sign the forms and mail them to the bank branch in Canada where you intend to open a new account.
- If you have already moved to Canada or have spent some time here, you’ll need to apply for and get a social insurance number so you can open a bank account. Along with this document, you’ll need a second proof of identification such as your passport. After submitting both documents, you can visit the bank branch nearest to you and open an account.
Information provided to you about your bank account
As part of the procedure for opening a bank account, your provider will send you a written or electronic document explaining the terms of the service and proof that you requested the opening of the account. Here is the complete information included in the agreement:
- Copy of the account agreement
- Details of the fees and charges applicable for the account
- Details about how the bank will inform you in case there are changes in the account
- Customer service information in case you need to register a complaint
The provider or bank must send this information to you within a week of opening the account.
Bank account application approval time
Having completed and submitted the application and given your consent to the terms of the bank’s account services, you should be able to get your application approved right away. In case, you’re personally present on site, you’ll receive the debit card right away. However, if you’ve applied for the account over the internet, you can begin using the online account. Your debit card should arrive by mail within a few days. Once you receive it, you only need to call a toll-free number and it will be activated.
What happens if a lender declines my application to open a bank account?
While the law gives you the right to open a bank account, the provider can choose to deny services depending on certain conditions. If the bank refuses to open your account, you can request for a written statement declaring that they will not open an account. They must also provide you with contact information for the Financial Consumer Agency of Canada (FCAC). Here is the typical criteria for denying you services:
- Submitting false identification
- Harassing or threatening the teller
- The suspicion that you might use the account for fraud or conducting illegal business
- A suspicion that you have been involved in a crime concerned with a bank at some prior date
I’ve opened a chequing account. What now?
Once your account is functional, you can use it for an extensive range of transactions. For instance, you could set up direct deposit and use it to make bill payments. Here’s a list of the functions you may need to set up right after you open a chequing account.
- Receiving Payroll Deposits: Your employer will likely ask for your bank number, account number, and transit number. You can find this information by checking the bank’s website or contacting them over the phone. If needed, you may have to provide your employer with a void cheque from the bank account you have.
- Pre-authorized debits: If you regularly make withdrawals like for example to a high-interest savings account you own, you can use your chequing account for pre-authorizing the transfers. You’ll be required to provide your account number, transit number, and bank number along with an authorization form to set up the functions.
- Recurring bill payments: You can use your chequing account to make payments towards the bills you pay each month. Set up the payees by personally visiting the bank branch, logging on the bank website or over the phone. Submit the name of the recipient company and its bank account and set up auto payments.
How are Chequing Account Fees calculated?
Before opening a bank account, it is very important to consider the banking fees and charges as there are many options available to Canadians. Whenever you plan on opening a bank account, start by conducting a research of different banking institutions and find one that best suits your needs. In Canada, banks offer accounts with different options and specials. Therefore making a comparison between them especially when it comes to account fees is important.
Chequing accounts are very convenient for daily banking needs. The best thing about chequing accounts is there are many banks and financial institutions offering no-fee chequing accounts.
The different types of chequing account fees
Before opening an account it is very important to know and understand what fees you’ll be paying for the services. These are the 4 types of fees one is likely to pay when opening a chequing account:
- Transaction fees – is the amount charged to account holders that are associated with purchasing a debit card, paying bills and withdrawing cash. Individuals who are known to transact a lot within a month are advised to be paying a flat monthly fee as opposed to being charged every time they transact.
- Service fees – this refers to the amount charged to account holders for moving money between accounts, requesting for monthly statements and for updating your balance.
- Minimum balance fee– some banks charge a certain fee in situations where your account balance falls below a certain predetermined amount. However, if you maintain your account above the stipulated minimum balance, you do not get to pay any fees.
- Fees for NSF cheques – this is the amount charged to your chequing account in case you write a cheque and do not have enough money in your account. Most people refer to it as a bouncing cheque. In Canada, account holders are not allowed to write cheques knowing very well that it will bounce eventually. In fact, it is illegal by law.