What are the different types of chequing accounts?

The humble chequing account: a stalwart of our financial system. Need to hold your money? Need to have access to it quickly via a card and an ATM? Want to write someone a cheque? Well, the chequing account is there for you. It provides a safe place to keep your hard-earned dollars and allows you to access your funds wherever you are — you know it, I know it, we all know it.

But did you know that there are a bunch of kinds of chequing accounts? That’s right! You can find a different chequing account for your phase in life or the goals you’re trying to achieve. From standard chequing all the way to VIP options, there’s something for everyone. Let’s go through a few of the different accounts available and where you can get them. Who knows? You might actually end up signing up for a different type of chequing account.

Are all chequing accounts created equal?

While there are different types of chequing accounts, there are key consistencies. For example, most chequing accounts will offer a debit card that allows you to perform transactions at an ATM or store. Additionally, most will offer cheques or bill payment to allow you to send money to others, including other companies.

Still, some of these benefits are different from account to account and costs vary as well. Some accounts are free and others, particularly those that offer enhanced benefits, cost a monthly fee. Remember that all of these accounts, regardless of type, are insured against loss as well.

Standard chequing accounts

No frills, nothing fancy, just your standard chequing account. These accounts typically offer debit cards from which you can make purchases directly. They also have a network of ATMs where you can withdraw cash, either for free or for a small fee. This often depends on the type of account you have (there are even tiers within tiers!). Banks usually differentiate between tiers in various ways including minimum balance, direct deposit, or the number of products for which you’ve signed up.

For example, a bank may charge a $10 per month maintenance fee for you to have a chequing account but will waive that fee if you keep a minimum balance of $1,000 or have two other products with the bank, like your mortgage and a credit card. Banks will also often waive fees if your paycheque is deposited into the account each month via direct deposit.

These chequing accounts will often have bill payment services as well; as opposed to paying on each individual site, you can consolidate and automate all your bills in one account! They also typically offer the option and ability to write cheques. Finally, these accounts often come packaged with overdraft protection, especially if you have an accompanying savings account. This can be helpful if you forget that you paid that credit card bill and head out to dinner on the same day.

It’s important to note that fees for these services vary widely. For example, you could have an account that works on a monthly payment structure, say $10 a month. This payment entitles you to a certain number of a particular transaction, like three ATM visits or five different electronic transfers. Your account may also be a pay-per-transaction system, where you pay a certain fee for each action you make with your account.

VIP/Premium chequing accounts

For customers who conduct a higher volume of transactions throughout the course of the month, this one’s for you. You will, of course, pay for the convenience of having access to more transactions. If, however, you find that you’re consistently going over your allotted number of ATM withdrawals, it may make some sense to pay the additional monthly fee.

In addition to trading a monthly fee for additional services, these types of accounts often come with other benefits, such as free safe deposit boxes, fee waivers for certain transactions, and special rewards. We often think of rewards points as something only credit cards offer but many Canadian banks also offer rewards such as cash back and have these built into their chequing products.

Student/Youth chequing accounts

Student or youth chequing accounts are a great tool for young Canadians to get a head start on banking. Generally, they offer features like bill pay, savings account links, and debits for free. Students can often pair their chequing account with any student loans they have with the same bank, realizing additional perks. Accounts for minors, such as these, help them learn the value of saving without incurring heavy fees.

Newcomer chequing accounts

New Canadian residents or long-term visitors need Canadian bank accounts too! They may not, however, be used to how Canadian banks work. That’s why newcomer accounts can come in handy. They generally feature low or no fees and plenty of flexible features. They’re also often paired with financial literacy programs to help newcomers better understand the realm of personal finances in Canada.

Senior chequing accounts

Retired Canadians are generally on a fixed income as they pull from Registered Retirement Savings Accounts (RRSP) or pensions. It’s a bit hard to swallow having to pay a high monthly fee just to access your money. That’s why the Canadian government, in conjunction with the country’s banks, has ensured low-cost account options are available for seniors and those who need them. This often takes the form of something called the Seniors Rebate and follows along with the type of account. A more traditional account with fewer transaction options may be entirely free to a senior; a premium account may only cost 50% as much.

Any other accounts?

Absolutely! There are as many types of accounts as financial transactions. In addition to chequing accounts, there are other beneficial accounts you should consider. Looking to hold onto your cash for an extended period while making a bit of money? The savings account is the way to go. An investment account is yet another type of account. It contains your portfolio of investments as well as some liquid cash and allows you to make investment transactions. Escrow accounts are tied to your mortgage and allow you to pay taxes and insurance.

There are plenty of accounts that can meet your needs, whatever they may be. And remember that with fintechs (like KOHO!) you can usually get these needs met, without any hidden fees.

What’s the right one for me?

There are lots of different kinds of accounts and just as many types of chequing accounts. Traditional accounts at big banks allow you to make some basic transactions, transfer money and take money out of ATMs, usually while paying a fee. Extra accounts may allow for more transactions and international transfers or ATM use. Student and senior chequing allow those populations to build or maintain banking relationships while on a fixed income or learning about the system. If you understand the fees and restrictions that come along with your account, you’ll be successful and able to find the right account for you.