Common types of bank accounts in Canada<\/h3>
In its most basic form, there are only two types of bank accounts in Canada: a chequing account and a savings account. But why two? What\u2019s the difference between a chequing account and a savings account?<\/p>
A chequing account is designed for daily banking needs \u2014 depositing your paycheque, paying bills, buying groceries, etc. A savings account is designed to let you earn interest on every dollar deposited into your bank account \u2014 helping you save more.<\/p>
In recent years the arrival of digital banks and fintech apps meant hybrid bank accounts, making the decision between opening a chequing vs savings account far more challenging.<\/p>
To help, here\u2019s a breakdown of the 11 types of bank accounts found in Canada, along with an explanation of when to use this type of account:<\/p>
Bank accounts at a glance<\/h4>- Chequing accounts<\/a><\/li>
- Savings accounts<\/a><\/li>
- High-interest savings accounts<\/a><\/li>
- Online bank accounts<\/a><\/li>
- Money accounts or money apps<\/a><\/li>
- Seniors\u2019 bank accounts<\/a><\/li>
- Kids\u2019 banking<\/a><\/li>
- Student bank accounts<\/a><\/li>
- Registered accounts<\/a><\/li>
- Joint accounts<\/a><\/li>
- Business bank accounts<\/a><\/li><\/ol>
Chequing accounts<\/h3>
Chequing accounts are for your day-to-day banking needs. They provide fast and easy access to your money via online and mobile banking, plus a linked debit card for your daily spending.<\/p>
You can use a chequing account to:<\/p>
- Deposit paycheques, e-transfers and cash<\/li>
- Pay bills<\/li>
- Send Interac e-transfers<\/li>
- Withdraw money at an ATM or branch<\/li>
- Write cheques<\/li>
- Shop using a linked debit card<\/li><\/ul>
You can also find variations on the chequing account. For instance, you can open an individual or joint chequing account, while US dollar and business chequing accounts are also available. Many chequing accounts charge a monthly fee \u2014 although you can find no-fee chequing accounts<\/a>. In some cases, the monthly fee is waived if you meet certain criteria, such as a minimum account balance or multiple products with the same bank.<\/p>In most cases, a chequing account allows you to perform unlimited or a large number of monthly transactions \u2014 assuming you will do your day-to-day banking through this type of account. Keep in mind that if you exceed your account\u2019s monthly limit, any further transactions you make will attract additional fees.<\/p>
Find the best day-to-day banking account for your needs using the Finder guide to the best chequing accounts<\/a>.<\/p>Savings accounts<\/h3>
A savings account is designed to help you save money. It lets you earn interest on the money you deposit into your account, allowing your bank balance to grow as you save. You can further boost your savings by setting up a regular automatic deposit from your chequing account.<\/p>
Because this type of account is not intended for daily spending, typical savings accounts often don\u2019t include features like ATM access or unlimited monthly transactions. In most cases, this type of bank account does not charge you a monthly fee. Like chequing accounts, expect to pay transaction fees if you use your savings account to complete certain banking transactions, such as bill payments or e-Transfers, and, in most cases, these transactions are not included in the monthly account package.<\/p>
Find out more through the Finder guide to savings accounts<\/a>.<\/p>High-interest savings accounts<\/h3>
High-interest savings accounts are like savings accounts on steroids. They offer higher interest rates than standard savings accounts, allowing you to grow your balance faster. To get these higher rates, you will need to forego some features or meet a requirement, for instance:<\/p>
- Keep a minimum account balance to get a higher interest rate<\/li>
- Special high-interest rate is for an introductory period, such as 3 to 6 months, and once the intro period ends, you earn at a lower interest rate<\/li>
- No withdrawals each month<\/li>
- Add multiple products with the same financial institution<\/li><\/ul>
The best high-interest savings accounts don\u2019t have any monthly fees and can be linked to your chequing account for regular deposits. Just watch out for any transaction limits or additional transaction fees that may apply.<\/p>
To learn more about these types of savings accounts, check out our guide to the best high-interest savings accounts<\/a>.<\/p>Online bank accounts<\/h3>
Basically, every bank in Canada allows you to manage your account through an online web portal or a mobile banking app. But digital banks take it a step further and operate completely online. That\u2019s right: Digital banks don\u2019t have physical branches. So, when you want to open an account, manage your money or get customer support, you need to chat online, go through a smartphone app, call customer service or go online to their banking portal. The advantage is that most online banks offer low or no fees, and you can do your banking whenever convenient.<\/p>
Online banks tend to offer flexible banking options and may sometimes partner with brick-and-mortar banks to offer services \u2014 like ATM access \u2014 that would otherwise be difficult to provide.<\/p>
While they don\u2019t offer the same broad range of products as traditional banks, many online banks offer:<\/p>
- Chequing accounts<\/li>
- Savings accounts<\/li>
- USD accounts<\/li>
- Credit cards<\/li>
- Prepaid cards<\/li>
- Student bank accounts<\/li>
- GICs<\/li>
- TFSAs and RRSPs<\/li><\/ul>
And, like traditional banks, many online banks like EQ Bank, Tangerine and Simplii Financial are CDIC insured for up to $100,000 per account, so your savings are protected in the unlikely event of a bank failure (check to see if any bank you\u2019re interested in is CDIC insured<\/a>).<\/p>Just make sure the digital bank you choose has a reputation for great customer support so that if you ever need help, it\u2019ll always be within easy reach.<\/p>
Find out more about<\/strong> online banks and digital banking in Canada<\/a><\/p>Money accounts or money apps<\/h3>
Traditionally, you would have to log into a computer at home or in your office or visit a branch to complete a banking transaction. However, with the introduction of digital banking, mobile banking has become faster and easier. Using online money accounts and mobile apps gives you the convenient option to manage money while on the go.<\/p>
For example, Mydoh<\/a> is an app designed to teach kids about managing money. It allows parents to pay their children\u2019s allowance and monitor spending, while kids can use a prepaid card linked to their accounts to pay for purchases. To learn more about banking services to help kids manage money, check out the Finder guide on kids\u2019 banking<\/a>.<\/p>Find out more about the<\/strong> best banking apps in Canada<\/a>, or check out the Finder guide on the best savings apps in Canada<\/a>.
Chequing accounts<\/h3>
Chequing accounts are for your day-to-day banking needs. They provide fast and easy access to your money via online and mobile banking, plus a linked debit card for your daily spending.<\/p>
You can use a chequing account to:<\/p>
- Deposit paycheques, e-transfers and cash<\/li>
- Pay bills<\/li>
- Send Interac e-transfers<\/li>
- Withdraw money at an ATM or branch<\/li>
- Write cheques<\/li>
- Shop using a linked debit card<\/li><\/ul>
You can also find variations on the chequing account. For instance, you can open an individual or joint chequing account, while US dollar and business chequing accounts are also available. Many chequing accounts charge a monthly fee \u2014 although you can find no-fee chequing accounts<\/a>. In some cases, the monthly fee is waived if you meet certain criteria, such as a minimum account balance or multiple products with the same bank.<\/p>
In most cases, a chequing account allows you to perform unlimited or a large number of monthly transactions \u2014 assuming you will do your day-to-day banking through this type of account. Keep in mind that if you exceed your account\u2019s monthly limit, any further transactions you make will attract additional fees.<\/p>
Find the best day-to-day banking account for your needs using the Finder guide to the best chequing accounts<\/a>.<\/p>
Savings accounts<\/h3>
A savings account is designed to help you save money. It lets you earn interest on the money you deposit into your account, allowing your bank balance to grow as you save. You can further boost your savings by setting up a regular automatic deposit from your chequing account.<\/p>
Because this type of account is not intended for daily spending, typical savings accounts often don\u2019t include features like ATM access or unlimited monthly transactions. In most cases, this type of bank account does not charge you a monthly fee. Like chequing accounts, expect to pay transaction fees if you use your savings account to complete certain banking transactions, such as bill payments or e-Transfers, and, in most cases, these transactions are not included in the monthly account package.<\/p>
Find out more through the Finder guide to savings accounts<\/a>.<\/p>
High-interest savings accounts<\/h3>
High-interest savings accounts are like savings accounts on steroids. They offer higher interest rates than standard savings accounts, allowing you to grow your balance faster. To get these higher rates, you will need to forego some features or meet a requirement, for instance:<\/p>
- Keep a minimum account balance to get a higher interest rate<\/li>
- Special high-interest rate is for an introductory period, such as 3 to 6 months, and once the intro period ends, you earn at a lower interest rate<\/li>
- No withdrawals each month<\/li>
- Add multiple products with the same financial institution<\/li><\/ul>
The best high-interest savings accounts don\u2019t have any monthly fees and can be linked to your chequing account for regular deposits. Just watch out for any transaction limits or additional transaction fees that may apply.<\/p>
To learn more about these types of savings accounts, check out our guide to the best high-interest savings accounts<\/a>.<\/p>
Online bank accounts<\/h3>
Basically, every bank in Canada allows you to manage your account through an online web portal or a mobile banking app. But digital banks take it a step further and operate completely online. That\u2019s right: Digital banks don\u2019t have physical branches. So, when you want to open an account, manage your money or get customer support, you need to chat online, go through a smartphone app, call customer service or go online to their banking portal. The advantage is that most online banks offer low or no fees, and you can do your banking whenever convenient.<\/p>
Online banks tend to offer flexible banking options and may sometimes partner with brick-and-mortar banks to offer services \u2014 like ATM access \u2014 that would otherwise be difficult to provide.<\/p>
While they don\u2019t offer the same broad range of products as traditional banks, many online banks offer:<\/p>
- Chequing accounts<\/li>
- Savings accounts<\/li>
- USD accounts<\/li>
- Credit cards<\/li>
- Prepaid cards<\/li>
- Student bank accounts<\/li>
- GICs<\/li>
- TFSAs and RRSPs<\/li><\/ul>
And, like traditional banks, many online banks like EQ Bank, Tangerine and Simplii Financial are CDIC insured for up to $100,000 per account, so your savings are protected in the unlikely event of a bank failure (check to see if any bank you\u2019re interested in is CDIC insured<\/a>).<\/p>
Just make sure the digital bank you choose has a reputation for great customer support so that if you ever need help, it\u2019ll always be within easy reach.<\/p>
Find out more about<\/strong> online banks and digital banking in Canada<\/a><\/p>
Money accounts or money apps<\/h3>
Traditionally, you would have to log into a computer at home or in your office or visit a branch to complete a banking transaction. However, with the introduction of digital banking, mobile banking has become faster and easier. Using online money accounts and mobile apps gives you the convenient option to manage money while on the go.<\/p>
For example, Mydoh<\/a> is an app designed to teach kids about managing money. It allows parents to pay their children\u2019s allowance and monitor spending, while kids can use a prepaid card linked to their accounts to pay for purchases. To learn more about banking services to help kids manage money, check out the Finder guide on kids\u2019 banking<\/a>.<\/p>
Find out more about the<\/strong> best banking apps in Canada<\/a>, or check out the Finder guide on the best savings apps in Canada<\/a>.