If you are planning to move to Canada, or you are already here, then you have probably heard of a chequing account. Why is this so popular in Canada? Well, a chequing account is necessary for a variety of reasons. Most importantly, it’s a place to store your daily spending money without carrying around a wad of cash. It is also beneficial to have when you obtain a job.
What is a Chequing Account?
As we mentioned, a chequing account stores your spending money. However, it also makes accessing your money easy. Account-holders are provided with a debit card and cheque book, and they can make frequent deposits and cash withdrawals. This increases the convenience of paying bills, transferring money, and making regular purchases. In addition, many people deposit their paycheques into their chequing account or receive their payroll through direct deposit, which automatically appears in their chequing account so they can use their hard-earned money quickly.
Even though a chequing account is not a great place to store your money for an extended period of time, it pays little to no interest. Moreover, their monthly account fee may be waived if you maintain a minimum balance, so you can save money on bank fees.
Why Do You Need a Chequing Account?
A chequing account is necessary when you find a part-time or full-time job because it provides you with a place to safely store your money. It also makes paying bills and daily spending easier.
Depending on your age and status, there are a number of chequing account options. For example, there are:
- Youth Chequing Accounts: For children under 18-years-old.
- Student Chequing Accounts: However, you must show proof of enrollment.
- Newcomer Chequing Accounts: Waive monthly fees, access a premium savings account, free safety deposit box, and free international money transfers.
- Senior Chequing Accounts: For persons 60 years or older.
- Hybrid Chequing Accounts: Combining savings and chequing abilities.
- No Fee Chequing Accounts: Offering unlimited free transactions with online banks.
- Business Chequing Account: For businesses including partnerships, non-profit organizations, corporations, and sole proprietorships.
- Basic Chequing Account: Entry-level chequing accounts your bank will offer.
- Premium Chequing Account: An expensive option that consists of free ATM transactions, access to premium credit cards, drafts, free cheques, safety deposit boxes, and an unlimited number of debits.
Research your choices and benefit from the option that makes the most sense for your financial situation.
Most people do not carry cash on hand anymore. In fact, having a debit card enables you to do online banking and make purchases online from the comfort of your home. This is appealing during a pandemic. However, in order for this to work, your debit card needs to connect with your chequing account because a debit card is what allows you to access the money in your account. So you can spend it.
Now that you are hired for a job, how do you receive your pay? Is it hourly or salary? Is it a direct deposit or a physical paycheque?
Instead of using a physical paycheque, direct deposit transfers your money electronically to your chequing account. Therefore, it requires an electronic network that allows these deposits to move between banks. The funds appear in the recipient’s account so there is no need to wait for it to clear (as one might do when depositing a paycheque). This is also useful for tax refunds.
Depending on your job and the company you work for, especially if you earn hourly wages, you might receive a physical paycheque. The easiest place to deposit this cheque would be in your chequing account.
Having a chequing account is essential for many financial matters such as receiving job paycheques and paying your bills. If you are planning to move to Canada, then you need to consider your options when it comes to choosing a chequing account. Find one that is best suited for your situation because you will need a chequing account for most financial matters in Canada. Good luck!
*Opinions expressed are those of the author, and not necessarily those of Student Life Network or their partners.