How To Choose a Chequing Account

Your choice of bank vs. credit union will depend on your personal needs. If you want access to in-person service and advice in your community, you might prefer to join a credit union. If you travel frequently, you may benefit from the large branch and ATM networks of the major banks. If you want to save on monthly fees but don’t mind giving up in-person service, a digital bank may be best for you.

What features should I look for in a chequing account?

When choosing a chequing account, you’ll want to consider the features of the account itself.

• Everyday transactions such as point-of-sale purchases, transfers, and bill payments. Look for an account that includes a sufficient number for your needs.
• Other transactions such as Interac® e-Transfers. Look for an account that lets you perform these types of transactions easily. For example, if you frequently use money orders or bank drafts, you may find a digital bank doesn’t meet your needs.
• Banking options. Most providers offer some combination of in-person, telephone, and online service. Some accounts charge a small fee to perform transactions in-person. Choose an account that allows you to do your banking in the way that you most prefer.
• Overdraft. Most chequing accounts allow you to subscribe to overdraft protection, which allows you to overdraw your account on a temporary basis. If you expect to use overdraft frequently, look for an account with low overdraft fees.
• Rebates. If you intend to carry a balance in your chequing account (more than a few thousand dollars), look for accounts that offer a rebate on your monthly fee.

What fees do I need to know about?

Every provider and account charges different fees for different services. The most commonly charged chequing account fees include:

Many banks also charge fees to access an ATM outside of your home network or outside the country, use a teller to perform a transaction, order additional cheques, buy money orders and bank drafts, close your account, and receive a monthly statement by mail. For more details about all the different fees that may apply, read our chequing account fees page.

How to calculate monthly cost

In order to find out what a particular chequing account will cost you, you need to estimate your total monthly cost. This is done by estimating the number of transactions you’ll perform in a given month, adding the monthly fee, and subtracting any rebates.

To estimate your monthly transactions, think about each different type of transaction separately. Ask yourself how many times you:

• Make a point-of-sale payment with your debit card
• Withdraw cash at an ATM
• Transfer money to another account
• Pay bills directly from your bank account

Add these up and subtract the number of transactions included in the account. For example, if you make 15 transactions a month and the account includes 10, you’ll pay a transaction fee 5 times.

Once you’ve done this, add in any other transactions that are counted or charged separately. Interac® e-Transfers are the most notorious example of transactions that aren’t included in your monthly limit and are charged at a higher rate than other transactions

Once you’ve determined how much you’ll pay in transaction fees, add the monthly account fee to this total.

Next, subtract any rebates that might apply. For example, some chequing account providers offer a rebate if you keep a minimum balance of at least $2,000 in your account at all times. Others might give you a discount for having other products with the same institution.

Choosing an account that has a slightly higher monthly fee but includes additional transactions or Interac® e-Transfers could help you save money in the long run. Based on this example, an account with a monthly fee of $9.95 that included 15 transactions and 4 email money transfers would save you $4 a month or $48 a year.

What else should I consider when choosing a chequing account?

You’ve thought about what type of account to choose, what kind of financial institution to go with, the features you need, and the fees you’ll be charged. What other determining factors do you need to be aware of when choosing an account?

• What branches are closest to you? Will you be able to go to the bank at hours that are convenient for you?
• Will you have restrictions on accessing your money? What are the daily allowances for point-of-sale purchases or ATM withdrawals?
• What signup bonuses are offered? Some banks pay cash bonuses or even offer incentives like iPads and TVs to new customers.
• Which accounts allow you to collect reward points? Which ones pay interest on the money you deposit?
• Which financial institutions support your community? Local credit unions can be more active in their communities than big banks.

Conclusion

It can take some time and effort to find the right chequing account for your individual needs. And as time goes on, it’s a good idea to continue comparing chequing accounts on a regular basis to make sure you still have the best account for you. To make this process easier, use Ratehub.ca’s chequing account comparison tool to see accounts side by side and estimate the total monthly costs based on your unique spending profile.