How do chequing accounts work?

What is a chequing account?

What is a chequing account used for?

Out of all your bank accounts, your chequing account is the one you use the most. That’s because it’s for your daily spending. That could include depositing your pay cheque, paying bills, buying items with your debit card, transferring money to others using Interac, writing cheques, making ATM cash withdrawals and deposits, and setting up pre-authorized payments to other bank accounts.

When you open a chequing account, you get a debit card, access to in-person and online banking and transaction limits based on the account you choose.

What are the benefits of a chequing account?

A chequing account offers more flexibility than other accounts, since chequing accounts come with a debit card which can be used as a payment method anywhere Interac is supported. It also doesn't have the potential interest charges associated with using a credit card and carrying a balance.

You can access your money from any of your bank’s ATMs without paying a fee. Plus, you can withdraw your money from other banks ATMs, however this may incur a fee depending on the type of account you have.

Chequing accounts also typically have a higher amount of debit transactions included than other accounts.

They may have a transaction limit of the number of transactions you can make per month and may charge a fee if you go over the set amount (unless you have unlimited transactions).

Your monthly account fee depends on the type of chequing account, but many banks will waive the fee if you keep a minimum monthly balance in your account, so you’ll have all the benefits of a chequing account while also saving money on fees.

If at any point during the month your account balance drops below the monthly minimum balance required, you will be charged the monthly fee for that month.

What is the difference between a chequing and a savings account?

chequing account

Everyday transactions: This account is used for daily transactions from depositing your salary to paying your bills to buying your daily coffee and bagel.

No accumulated interest: Most chequing accounts do not pay interest and if they do it’s typically very low compared to a savings account.

Associated transaction fees: Since your chequing account is used for daily banking, there are a number of transactions like debit payments or Interac eTransfer transactions associated with it that are covered by the monthly fee.
If you go over the amount of monthly transactions included, you pay the associated transaction fee, unless your account has unlimited transactions.
Transactions like bank drafts and wire transfers may have additional associated transaction fees if they’re not covered in the monthly fee.

savings account

Money storage/long-term payment: Savings accounts are typically not used for daily transactions. Instead, they’re suited for holding money for short- and long-term savings goals. They can be used to save for emergency or vacation funds.

Interest returns: Savings accounts typically offer a higher interest rate than chequing accounts.

Low to no fees: Most savings accounts don’t have monthly fees, but they have limited transactions included per month (sometimes only 1 or 2) and have higher associated transaction fees.

How much money should you keep in a chequing account?

Cover expenses

The general rule is to keep enough money in your account to cover one to two months of household expenses, savings, and fun.

Having enough money in your account means you avoid overdraft fees.

50/30/20 Rule

To figure out how much you need to keep in your chequing account, you can use the 50/30/20 budget rule where 50% of your after-tax earnings goes towards your needs like rent, mortgage, and groceries.

Thirty per cent goes to your wants like personal shopping and going out, and 20% goes towards savings like retirement and emergency funds.

So, if you earn $3,000 a month after taxes, you would have $1,500 for your needs, $1,000 for your wants and $500 for savings.

Avoid banking fees

Most chequing accounts will waive monthly fees if you keep a minimum balance in your account.

However, if you can’t keep a minimum balance, there are low- or no-cost chequing accounts, which likely have less transactions included per month.

How to choose a chequing account based on your needs?

Assess account features

Understanding how you bank is key to choosing the right chequing account.

Transaction limit: Count how many times a month you make or use:

  • Debit transactions
  • Cash withdrawals
  • Money transfers
  • Interac e-Transfers
  • Your overdraft
  • Pre-authorized transfers
  • ATM and in-branch transactions

This will help choose the account with the right number of transactions, so you’re not paying for unused services or paying monthly fees.

Overdraft protection: Some chequing accounts offer a small monthly overdraft protection fee. Others charge a larger fee but only when you use it, so choose the one that’s best for you. If you don’t use your overdraft, then you don’t need to pay any interest charges.

Interac e-Transfers: If you use Interac e-Transfers, choose a chequing account that includes them in the monthly fee.

Minimum monthly balance requirements: If you keep a minimum amount in your chequing account, most banks will waive the monthly fee.
If you can’t keep a minimum monthly balance, a low-cost chequing account with less transactions is another option.

What are our TD Chequing Account offers?

TD All Inclusive Banking Plan

This premium chequing account offers perks like a small safety deposit box6 and personalized cheques7 for no extra cost.

  • No TD fees at Non-TD ATMs or Foreign ATMs1
  • Monthly fee of $29.95 waived if you have a minimum monthly balance of $5,0003
  • Unlimited transactions per month.2
  • Fee Rebate on select TD Credit Cards4

TD Unlimited Chequing Account

This account offers unlimited monthly transactions including free Interac e-Transfers2.

  • Unlimited transactions2
  • Fees on select TD credit cards are refunded for the first year4
  • Free Interac e-Transfers2
  • Monthly fee of $16.95 waived if you have a minimum monthly balance of $4,0003

TD Everyday Chequing Account

This budget-friendly option has a set number of free transactions included in your monthly fee.

  • 25 transactions per month2
  • No Interac e-Transfer fees2
  • Monthly fee of $10.95 waived if you have a minimum monthly balance of $3,0003

TD Minimum Chequing Account

For those who have minimal banking needs and transactions. The low monthly fee makes it an option for seniors and those on a fixed income.

  • 12 transactions per month including two full-serve transactions completed in a TD branch or through EasyLine Telephone banking.
  • Monthly fee of $3.95
  • A good account for those on a fixed income (ex. Seniors, ODSP recipients)

TD Student Chequing Account

Designed for students, this account has no fees and offers unlimited transactions.

  • $0 monthly fee and unlimited transactions2
  • Keep the account with no monthly fee until age 23. After 23, you can continue to keep this account with proof of full-time post-secondary enrollment
  • No monthly fees for overdraft protection service5
  • No Interac e-Transfer fees2

Frequently Asked Questions

It is used for daily activities like paying bills, grocery shopping and depositing your pay cheque.

Some chequing accounts offer very low interest rates of 0.01%. Savings accounts offer a higher interest rate.

Yes. Some of our chequing accounts like the TD Student Chequing Account do not have a monthly fee. Other TD chequing accounts have a monthly fee but that is waived if you keep a minimum monthly balance.

A chequing account is a type of bank account. You can deposit money and use it to pay for your day-to-day expenses.

No. Some chequing accounts like the TD Student Chequing Account do not have a monthly fee. Others like the TD Unlimited Chequing Account have a monthly fee of $16.95 but that is waived if you keep a minimum monthly balance.

  • It’s convenient for daily transactions which you can pay for with your debit card.
  • It’s safer to keep your money in a chequing account and pay by debit card than carrying large amounts of cash.
  • Chequing accounts typically include more transactions in the monthly fee.
  • Many banks will waive the monthly fee if you keep a minimum monthly balance.

Both chequing and savings accounts are equally safe. There is a higher risk of theft due to the loss of the debit card associated with your chequing account so keep it safe. If it’s missing, report the loss or theft to the bank as soon as possible.

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