Chequing vs. savings accounts

Paying bills or building your nest egg? Learn about the differences between these two accounts and how they work together.

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Chequing and savings accounts are both used to keep your money safe but one is better for saving, and one is better for spending. Read on to see how these two accounts are related, compare their features, learn about their differences and see how they are often used together to compliment your financial needs.

What’s the difference between chequing and savings accounts?

A chequing account is designed for everyday spending. It comes with a debit card and gives you a convenient access to your money to pay bills, withdraw cash, transfer funds and deposit money. On the other hand, a savings account provides a safe place to store your money for later use while most times giving you the opportunity to earn interest. Compare each account’s features in the table below to see which makes the most sense for your financial situation.

ChequingSavings
Best forSpendingSaving
InterestRarely offeredYes
Cheque writingYesRarely — varies by bank
ATM accessYesYes
CDIC insuranceYesYes
Minimum deposit or balance requiredVaries widely, typically starts at $0Varies widely, typically starts at $0
Withdraw restrictionsDepends on your banking planDepends on your banking plan
Common fees
  • Monthly fee: $0 to $25
  • Overdraft fee: $25 to $40
  • ATM fee: $1 to $3

(Varies by bank)

  • Monthly fee: $0 to $25
  • Excessive transaction fee: $5 to $15
  • ATM fee: $1 to $3

(Varies by bank)

How to compare chequing accounts vs. savings accounts

To find out if you need a chequing account or a savings account, think about features such as:

  • Interest rates. Most chequing accounts don’t pay interest, while you could earn up to 2% or more with the right savings account.
  • Deposit requirements. Initial deposit requirements vary whether you choose a savings or chequing account but most are zero. Although, historically, chequing accounts had lower requirements, most savings accounts now offer zero deposit or minimum balances as well.
  • Features. Chequing accounts often have more features such as overdraft protection and cash back.
  • Fees. Chequing accounts are more likely to have fees, but you should watch out for additional charges no matter which option you choose.
  • Access. Chequing accounts give you more access to your money, but if you’re looking for an incentive to save, savings accounts have sometimes have limits to discourage spending.
  • Security. Both accounts are eligible for CDIC deposit insurance, but only if the issuing bank is CDIC-insured.

Chequing vs. savings account: Which is better for me?

Chequing accounts are transactional and designed for everyday use, while savings accounts are historically have been more restrictive. They serve different purposes, but they can also work together. However, if you’re only looking for one, the best option will depend on what you plan to use it for.

Pick a chequing account if …

  • You need unrestricted access to your money
  • You plan on making multiple transactions per month
  • You want features like overdraft protection

Pick a savings account if …

  • You don’t need easy access to your money
  • You’re looking to save money and earn interest
  • You want to limit your spending

Should I get both a chequing and savings account?

Having both a chequing account and a savings account could help you manage your money and save better. Your chequing account provides flexible access to cover expenses, bills and more, and you can transfer any extra money to your savings account to earn interest. Plus, some banks allow you to set up overdraft protection that uses funds from your savings account to cover chequing transactions.

Should I open a chequing account and savings account at the same bank?

It depends. One of the benefits of keeping your accounts at the same bank is that many institutions will waive monthly fees or provide free overdraft protection for your linked accounts. Plus, it’s easy to transfer funds between accounts almost instantly. But this can work against you if you’re tempted to dip into your savings and spend the money on other things. If you prefer to keep your savings “out of sight, out of mind,” you may be better off keeping both accounts at separate institutions.

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2.00 % APR

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  • Zero everyday banking fees
  • Free transactions
  • No minimum account balance

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With no everyday banking fees and free transactions, open an EQ Bank Savings Plus Account and get an interest rate of 2.00%.

  • Account fee: $0
  • Interest rate: 2.00%
  • Min. deposit amount to open account: $0
  • Account type: Savings
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Pros and cons of chequing vs. savings accounts

Chequing and savings accounts have quite a few things in common. They’re both insured up to $100,000, and they both can have common fees for monthly maintenance, ATM usage, number of transactions and more. But they each have unique pros and cons:

Chequing accounts

Pros
  • Unlimited access. With a chequing account, you can make as many transactions as you’d like within your banking plan’s limit.
  • Low or no opening deposits. Chequing accounts typically have no or low minimum deposit requirements.
  • Features. Many chequing accounts offer features like overdraft protection, bill pay, rewards programs and more.
Cons
  • No interest. This means your balance won’t grow while it sits in your account.
  • Easy to overspend. With no limit on how many transactions you can make, there’s nothing stopping you from spending.
  • Balance can go negative. Most chequing accounts allow you to make purchases even after your balance drops to $0, which could result in costly overdraft fees.

Savings accounts

Pros
  • Limits spending. Savings accounts could have certain withdrawal limits, which can prevent you from spending and encourage you to save.
  • Can’t overdraft. Most savings account don’t offer overdraft which can prevent you from spending money you don’t have.
  • Earns interest. Savings accounts pay interest on your balance, so you’ll earn money simply for holding money in the account.
Cons
  • Limited access. While savings accounts can limit your spending, they could also prevent you from accessing your money when you need it.
  • Higher deposits. Although most offer zero deposit requirements, some savings accounts could have higher deposit requirements than chequing accounts.
  • Lack of features. Unlike chequing accounts that offer perks for using the account, savings accounts typically don’t have as many features.

Compare chequing vs. savings accounts

Use the tabs on the table to explore chequing and savings accounts. To compare multiple accounts side-by-side, click the “Compare” box next to your top picks for an alternative view.

Name Product Interest Rate Account Fee Debit Transactions Interac e-Transfer Transactions
Scotiabank Student Banking Advantage Plan
0%
$0
unlimited
unlimited
Sign up today and get up to 5,000 SCENE or Scotia Rewards Points. Terms apply. Apply by July 31, 2020.
Scotiabank Preferred Package
0%
$15.95 per month ($0 if requirements met)
unlimited
unlimited
Earn $300 cash when you open a new Scotiabank Preferred Package. Terms apply. Apply by July 30, 2020.
Wealthsimple Cash
0.9%
$0
unlimited
unlimited
Earn 0.90% on any money you invest and withdraw your funds at any time.
Scotiabank Basic Bank Account
0%
$3.95 per month
12 free per month
2 free per month
With a low monthly account fee, you can choose between earning points toward the SCENE or Scotia Rewards reward programs.
Scotiabank Ultimate Package
0%
$30.95 per month ($0 if requirements met)
unlimited
unlimited
Earn $300 cash when you open a new Scotiabank Ultimate Package. Terms apply. Apply by July 30, 2020.
Scotiabank Basic Plus Bank Account
0%
$10.95 per month ($0 if requirements met)
25 free per month
10 free per month
Pay no monthly account fee by maintaining a minimum daily closing balance of $3,000 for the entire month.
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Compare up to 4 providers

Name Product Interest Rate Promotional Interest Rate Min. Bal / Min. Deposit Account Fee
EQ Bank Savings Plus Account
2.00%
N/A
$0 / $0
$0
Enjoy zero everyday banking fees, free transactions and no minimum balance with an EQ Bank Savings Plus Account.
Tangerine Savings Account
0.25%
2.8%
$0 / $0
$0
Earn 2.80% interest for 5 months (up to a maximum of $1,000,000) as a new Tangerine client. Offer expires July 30, 2020.
HSBC High Rate Savings Account
0.25%
Up to 2.25%*
$0 / $0
$0
Open an HSBC Canadian Dollar High Rate Savings Account and earn up to 2.25%* interest on new deposits± from April 6, 2020 to August 6, 2020.* *Rates are per annum and subject to change without notice. Terms and conditions apply.
Wealthsimple Cash
0.90%
N/A
$0 / $0
$0
Earn 0.90% on any money you invest and withdraw your funds at any time.
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Bottom line

Open a chequing account to get easy access to your money or a savings account to earn interest and limit spending — or open both to cover all of your financial bases. Either way, compare your options to find the right one for your financial needs.

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