How to choose a bank account that’s right for you

Knowing what to look for will help you find an account that fits.

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Bank accounts come with a lot of jargon. Learning to sort through and compare them can keep you from getting stuck with an account that doesn’t meet your needs.

EQ Bank Savings Plus Account

EQ Bank Savings Plus Account

2.45 % APR

rate

  • No monthly fees
  • Unlimited transactions
  • No minimum account balance

EQ Bank Savings Plus Account

With no monthly fees and unlimited transactions, open an EQ Bank Savings Plus Account and get an interest rate of 2.45%.

  • Account fee: $0
  • Interest rate: 2.45%
  • Min. deposit amount to open account: $0
  • Account type: Savings
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Is there more than one type of bank account?

In Canada, there are generally 2 main types of bank accounts: chequing accounts and savings accounts.

Chequing account icon representing everyday spending

Chequing accounts

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Savings accounts

Chequing accounts

A chequing account is available for frequent and immediate access and is most commonly used as an everyday transaction account. If you want to purchase something, you would typically use this type of account. Chequing accounts commonly come with:

  • A linked debit card. Usually either Visa debit or Mastercard debit card.
  • ATM access. Though some accounts will charge a fee if you use an out-of-network ATM.
  • Internet banking. This feature allows you to go online to access your account details and make transactions.
  • Branch access. This feature allows you to process transactions in a bank branch.
  • Cheque book. This feature allows you to make purchases with cheques. Subsequent checque books usually have to be purchased for a fee. Cheques can also be voided (cancelled) and given to employers or companies to set up automatic withdrawals from your chequing account.

Chequing accounts with special benefits

There are several special benefits attached to some chequing accounts such as:

  • Earn points for gifts: With a Scotiabank SCENE debit card, you can earn points from everyday purchases and redeem those points for free movies, meals and more. You receive 1 SCENE point for every $5 spent and 5X the points on purchases at Cineplex.
  • Get travel rewards miles: Earn 1 mile with every dollar spent using a BMO debit card when you have a BMO Air Miles Plan. This plan also includes unlimited transactions, Interac e-transfers and point-of-sale transactions on the worldwide Maestro and Mastercard network. Couple your debit card with a BMO AIR MILES World Mastercard or a BMO AIR MILES World Elite Mastercard and get 25 Bonus Miles each month.
  • Promotional cash bonus or gift card: This is a form of incentive offered to customers where they receive a cash bonus, gas card or some other free gift after opening an account.

Top 10 factors to consider when choosing an everyday chequing account

1. Fees. Are there any monthly fees?

2. ATM access. Does your bank have a large number of ATMs?

3. Branches. If you prefer to bank in person, does your bank have a national network of branches?

4. Special account needs. If you’re a student, look for a bank that offers fee-free student accounts.

5. Eligibility criteria. You’ll typically need to be at least the age of majority in the province or territory in which you reside (either 18 or 19 years old) to open an account independently. Other eligibility requirements may include being a Canadian resident with a Canadian mailing address.

6. Currency conversion fees. Look into how much it’ll cost to use your debit card overseas.

7. Minimum deposits. Check if the account has a minimum opening deposit or if you need to meet a minimum ongoing balance to avoid fees. Learn more about minimum balance and deposit requirements in our guide.

8. Debit card access. Look into what kind of debit card the bank offers and how easy it is to freeze your account and get a replacement if you lose yours.

9. Bonus offers. Some bank accounts offer a cash bonus when you sign up. But don’t get an account just because of a freebie — look into all of the other features first.

10. Earning capabilities. Some chequing accounts earn cashback bonuses or even interest.

It’s okay if you don’t find the right bank account right away. It may take some time to sort through all the features offered by different banks, but it’s worth it to find an account that suits you.

How do I open a chequing account?

Most banks will allow you to open an account online. You’ll need to supply your personal information, including your Social Insurance Number (SIN), and government ID such as a passport or a driver’s license.

To get started, visit the website of the bank you’re interested in, navigate to the application page and follow the onscreen prompts. When your application has been processed and approved, you’ll be notified and given the details of your new account so that you can transfer money into it.

Savings accounts

These accounts earn interest to help you save. Most also put restrictions on your withdrawals, which can give you motivation to save — but the fees can also eat into your savings if you make too many withdrawals.

To find the account that’s the best fit, compare based on:

  • Interest rate. Even a small difference in interest rate can start to add up over time.
  • Minimum and maximum account balances. Not every account will be the right fit for the nest egg you’re tucking away.
  • Ongoing fees. Check what fees you’ll need to pay, and if fees can be waived by meeting certain account requirements.
  • Account requirements. Some savings accounts will require a linked chequing account. Credit union accounts can require you to work at a specific place, live in a specific area or meet other membership requirements.

What are some of the best savings accounts?

The best savings account is the one that fits your needs, and every person will have a different best account. Our top picks include:

Tangerine Savings Account

This interest-earning account charges little or no fees and offers a competitive interest rate. Earn 2.75% interest for 5 months when you open your first Tangerine Savings Account (up to a maximum of $1,000,000).

  • $0 monthly fee
  • 1.05% APY
  • Eligible for CDIC coverage up to $100,000

EQ Bank Savings Plus Account

Enjoy free and unlimited daily transactions, no fees and no minimum balance with an EQ Bank Savings Plus Account.

  • $0 monthly fee
  • 2.45% APY
  • $0 insufficient funds fee
  • Eligible for CDIC coverage up to $100,000

Compare more savings accounts

Name Product Annual Interest Rate Promotional Interest Rate Minimum Balance Account Fee
Tangerine Savings Account
1.05%
2.75%
$0
None
Earn 2.75% interest for 5 months when you open your first Tangerine Savings Account by April 30, 2020. (up to a maximum of $1,000,000).
EQ Bank Savings Plus Account
2.45%
N/A
$0
None
Enjoy free and unlimited daily transactions, no fees and no minimum balance with an EQ Bank Savings Plus Account.
Wealthsimple Cash
2.40%
N/A
$0
None
Earn 2.4% on any money you invest and withdraw your funds at any time.

Compare up to 4 providers

What are the downsides of savings accounts?

These accounts can help you save, but there are disadvantages too.

  • Variable interest rates. If your account has a variable interest rate, your APY could drop in the future — but it could also rise. Interest rates on variable accounts are influence by the economy and the prime rate set by the Bank of Canada.
  • Withdrawal limitations. If you make more than amount of withdrawals your account allows you to make per month, you could be charged fees amounting to as much as several dollars per transaction.
  • Watch out for introductory rates. Some accounts offer a higher interest rate for an introductory period. If you sign up for one of these accounts, check what your long-term interest rate will be.

Compare different types of bank accounts

What other types of savings accounts exist?

Online savings accounts are popular because they’re convenient. You can make your deposits from the comfort of your living room. These accounts typically offer competitive interest rates due to the lower overheads associated with online-based institutions.

Encouraging children to start saving early can greatly benefit their financial habits in the future. Many banks offer savings accounts specifically for children. Most require a parent or guardian to open the account on behalf of the child or as a joint account holder.

  • Retirement accounts

These can include Registered Retirement Savings Plans (RRSPs) or any other account with the main purpose of saving for retirement.

Bottom line

If you’re looking for a new place to bank, it’s worth taking the time to compare savings accounts or chequing accounts to find one that’s the perfect fit. To avoid any nasty surprises, read all the fine print before signing up for a new account.

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