A chequing account is the bank account most people use for everyday money.
It is where your pay can be deposited, where bills can come out, and where you can use a debit card, send e-Transfers, withdraw cash, and move money around.
In simple terms, a chequing account is your day-to-day bank account.
It is not usually designed to grow your money. It is designed to help you use your money.
How Does a Chequing Account Work?
A chequing account lets you deposit money and spend it when needed.
You might use it to:
- Receive your paycheque by direct deposit
- Pay rent, mortgage payments, or condo fees
- Pay bills
- Use a debit card
- Send and receive e-Transfers
- Withdraw cash from an ATM
- Move money to savings or investing accounts
For many Canadians, a chequing account is the central hub of their financial life.
Money comes in, money goes out, and hopefully some of it gets moved somewhere useful before it disappears into snacks, subscriptions, and quick trips to the shop.
Why Is It Called a Chequing Account?
The name comes from cheques.
Before online banking, debit cards, and e-Transfers became common, people often used paper cheques to pay for things.
Cheques are less common now, but the name stuck.
Even if you never write a cheque, your everyday bank account will often still be called a chequing account.
Do Chequing Accounts Pay Interest?
Some chequing accounts pay a small amount of interest, but many pay little or none.
That is because a chequing account is mainly built for access and convenience, not growth.
That does not mean you should keep your chequing account empty. You still need enough money there for bills, spending, and a buffer.
But if you have extra money sitting there for months, it may be worth asking whether that money should be moved to savings, debt repayment, a TFSA, an RRSP, or another goal.
Common Chequing Account Fees
Chequing accounts can come with fees.
Some common ones include:
- Monthly account fees
- ATM fees
- Overdraft fees
- Non-sufficient funds fees
- Extra transaction fees
- E-Transfer fees, depending on the account
Some banks waive the monthly fee if you keep a minimum balance in the account. Others offer low-cost or no-fee chequing accounts.
The key is to understand what you are paying for.
A $16 monthly fee may not sound huge, but that is $192 per year. If you are not getting real value from the account, that money could be doing something better.
What Is Overdraft?
Overdraft is when your bank allows a payment to go through even though you do not have enough money in your account.
That might sound helpful, and sometimes it can be.
But overdraft can also be expensive.
You may pay overdraft fees, interest, or both. It is not free money. It is more like a short-term safety net with a cost attached.
If you use overdraft, make sure you understand the fees and how quickly you need to pay it back.
How Much Should You Keep in a Chequing Account?
There is no perfect number for everyone.
A good basic approach is to keep enough in your chequing account to cover:
- Upcoming bills
- Regular spending
- A small buffer
- Any minimum balance needed to avoid fees, if that applies
You probably do not need your full emergency fund sitting in chequing.
You also probably do not want your chequing balance so low that one forgotten bill causes stress.
The sweet spot is usually enough to keep life running smoothly, without letting too much cash sit idle.
Fresh Tip
Not all chequing accounts were created equal.
Shop around, check the fees, and pick the account that is best suited for your individual circumstances.
What Should You Look For in a Chequing Account?
When choosing a chequing account, look at:
- Monthly fee
- Minimum balance requirement
- Number of included transactions
- E-Transfer access
- ATM access
- Online and mobile banking
- Overdraft options
- Customer service
- Whether it fits how you actually bank
The best chequing account is not always the one with the most features.
It is the one that fits your real life without charging you for things you do not use.
Learn More
- What is a float?
- What is a TFSA?
- Why your first financial goal should be boring
- Why I use more than one bank account
- What is a budget?
The Bottom Line
A chequing account is your everyday bank account.
It is useful for receiving money, paying bills, using a debit card, sending E-Transfers, and managing day-to-day spending.
But it is not usually the best place to grow your money.
Use your chequing account as a practical hub, keep enough there to stay organized, and make sure the rest of your money has a job.