Everyone needs somewhere to stash their cash. Some may choose to side with age old wisdom and hide it in their mattress. Others may store it in barrels and hide it in the desert. The majority of law abiding citizens will opt for a chequing account with an established financial institution. A chequing account is the vehicle used to access your money quickly and easily; they are used for everyday transactions such making purchases and paying bills.
All chequing accounts are fundamentally the same but they are not created equal. With the many different accounts options available, each with their own specific set of features, it can be difficult to narrow down which one to choose. Here are a few things to consider when looking for a chequing account.
Number of Transactions
How many monthly transactions do you make? If the number of transactions is limited, consider the basic no frills accounts which offer 10 monthly transactions. On the other hand if you have a high number of transactions, you will want to consider an account that offers unlimited transactions.
Account Features
Certain chequing accounts come with extras- from discounts on credit cards with annual fees to free safety deposit boxes. Some accounts allow for the accumulation of loyalty rewards points while others include free additional US accounts. There are many useful features that can be taken advantage of with the right account. Determining the features you plan on using can steer you in the right direction. If you aren’t making use of the features, it may be time to shop around.
Daily Minimum Balance
Many accounts offer the option to waive the monthly account fees when a minimum balance is maintained, however, keeping the balance isn’t right for everyone. Those unable or unwilling to maintain a minimum balance may be better off selecting an account with less features- especially if many of the features go unused- to avoid paying the high account fee. If the intention is to use an account’s features and/or have account fees waived, be sure that you’re able to maintain the minimum balance.
Customer Service
Some people like face-to-face interactions and building relationships with their banks; putting a name to a face builds an aspect of trust that can lead to confidence in where your money is being held. Other people prefer banking online and never having to physically go to the bank. Consider your banking style and what level of customer service you want from your bank.
I’m comfortable with never having to actually step foot into a branch to do my banking. With that said, I also loathe being on hold while being berated with the promise that my call is important and will be answered in priority sequence.
Institution Stability
What happens to the money when a bank goes bankrupt? The Canadian Deposit Insurance Corporation (CDIC) insures bank deposits against the loss of up to $100,000 in each eligible personal account in the case of a failure of a given financial institution. Credit unions are extended protection programs backed by provincial legislation. Double check that your institution is covered by the CDIC. Institutions are required by law to disclose that they aren’t covered. Picking a financial institution covered by debitor insurance is comforting, however, note their coverage does not protect against fraud or theft.
Security
With the prevalence of identity theft through phishing and skimming scams, it’s important to ensure that the money in the account is protected from fraudulent activity. After returning home from a trip to Italy, I received a call from the fraud prevention department of my bank; $1000 had been spent without our knowledge. Luckily my account was protected and the lost money was reimbursed. Make sure that you’re comfortable with the security measures in place by checking to see if the bank offers constant monitoring of their systems to proactively identify unusual account activity.
Interest
As a differentiator, some banks and credit unions pay interest on the balance in the chequing account. Chequing accounts, however, typically accrue interest at a lower rate than a savings account. When deciding on an interest bearing chequing account, it’s best to have a look around to see if there are competitive interest rates being offered.
Convenience
Depending on where you live, you may have access to several different bank branches within walking distance or be limited by the one branch in town. Look for a bank that has a branch your area, provide access to ATMs in places you frequent, and has business hours that fit your schedule. Not interested in visiting a physical location to do your banking? Check out the online and mobile banking options available. Wouldn’t it be nice to pay your buddy back for the drink by sending an email money transfer from your phone?
The Verdict
The most important thing when considering a chequing account is to ensure that the services offered best fit your personal needs. Accounts with monthly fees offer many nice to have features that can make banking much more comfortable. There are also accounts that cater to the needs of those who aren’t interested in extra features. It’s not that one account is better than another per se, but the case can definitely be made as to which account is better for you.
What factors are most important to you when it comes to choosing your chequing account?
Image Source: Business Insider
1. Free. That it’s free. I HATE paying fees for what I consider to be for nothing.
(This is why I am with PC Financial)
2. Convenient (I use CIBC machines)
3. No tellers and overhead to deal with (read: pay for)… which is why I like PC and ING depending on who is giving me a better interest rate. I don’t need a teller. I just need to be able to do everything with an ATM or over the phone.
4. Free cheques (see #1)
Agreed. I’m starting to realize that there’s probably better things that can be done with the money that’s currently tied up in the minimum balance; especially since I don’t use that many of the extra features that come with the account.