Banking or Chequing Account
A banking account is also commonly known as a chequing account in Canada. This is a transaction account that you need to open to carry out your basic banking activities. This can be anything from withdrawing and depositing money to paying bills to an account where you can have your salary and benefits paid into. A banking account will pay little or no interest on your money.
When you open a chequing account , you will also receive a debit card. You can use this debit card to withdraw money at the ATM and more also use it to pay for items you buy at a merchant. The money is directly debited from your bank account, so you are not taking on debt.
Banks can charge you a monthly fee on the chequing account, depending on which bank you open your account with. When I first came to Canada, I came from a country that did not charge a monthly fee for such an account. And I was not pleased that I would be charged for this service. But I have now understood that margins on their other products and services does not make up for the cost of transactions on a banking account. And this is the reason these banks charge a fees. Is you want to read more about which bank to choose, go to the Banking page.
There are a range of banking accounts with different features. From a basic banking account that offers a few features and has a limited number of free transactions allowed per month. And then there are fully loaded chequing accounts that offers many more features included along with unlimited transactions. Depending on the account you choose, banks will offer you a way to save on these monthly fees by either maintaining a minimum daily balance or have multiple products with them.
Also ask for the ‘newcomer’ banking packages. When you first come to Canada, you will be eligible for a ‘newcomer’ package that offers you free banking for a certain amount of time. Research the various newcomer packages online offered by the banks and choose the one that suits your needs the best.
I have described below some important features of banking accounts that will decide your monthly banking fee –
1. Debit transactions per month
A debit transaction is when money leaves your account. So withdrawing money from an ATM, swiping your debit card at a merchant outlet to pay for something, paying your bill online, writing a cheque, transferring money are all debit transactions. Depending on the banking account you choose, you are given a amount of free debit transactions per month. If you exceed these transactions, then you pay a fee per extra transaction. If you have too many transactions over you free limit, then the fees for the extra transactions can add up to a large amount. So try to stay within the free transaction limit of your banking account. If you cannot cut down the number of transactions, then upgrade your banking account to a higher limit package, but this will mean a higher monthly fee.
When you first come to Canada, start with the cheapest banking account available. This will help you save on the monthly fees. The most basic option will give you about 15 transactions a month. This may seem like very little, but when you are starting off you can manage it. If you do discover that you are going over your transaction limits and you need to use the other features more regularly, then you can upgrade.
2. Withdrawal at other bank ATMs
Every time you use the ATM of another bank, you are charged a fee by your bank + a fee by the bank whose ATM you use. Some banking accounts come with the feature of allowing you a amount of transactions at other bank ATMs. But the monthly fees on those banking accounts is higher. And there is still a transaction fee from the other company whose ATM is used. As a rule, don’t use ATMs of other banks. Open you account with a bank that has conveniently located ATM and use those only. You rather save the money on the monthly banking fees.
Even though banking accounts are also called chequing accounts, to get a cheque book you will be charged a fee (approx. $40) if you take a basic banking account. One of the only reasons you may need a cheque book is to pay your rent. But many apartment buildings also accept payment of rent via debit card. All other expenses can be paid with your debit card, credit card or than cash. Negotiate with your bank to offer you a free cheque book (50 cheques) as an incentive to open the account with them. Most of them will agree, they want your business.
4. E-mail money transfers
This is a great feature offered by Canadian banks. You can transfer money to anyone with a Canadian bank account and all you need to know is their e-mail ID. And the entire process can be completed by logging into your online banking. So if you need to send money to someone in Canada, then use e-mail money transfers instead of drafts or cheques. Some banks are not offering this feature free of cost to customers. If your bank does not, then use this facility as ‘pay per use’. If you use it regularly, check the cost of upgrading your chequing account to one that offers a few e-mail money transfers free of cost.
5. International remittance
If you need to send money back home to your loved ones, this is a great feature to use. And since it available in the online banking, you can do it any time from the comfort of your home. Again, use this facility as ‘pay per use’ if you need to do this infrequently. If you use it regularly, check the cost of upgrading your chequing account to one that offers you a few international remittances free of cost.