When it comes to managing your finances, the first step to take is opening a chequing and savings account. Whether it’s for personal use or to help run your business, there are many benefits to having both accounts. But what are they?
A chequing account is primarily used to facilitate daily transactions, where money is constantly moving in and out of the account. The access is almost seamless and can be done through the use of a debit card, cheque, or mobile banking. Chequing accounts are for essential day-to-day spendings like gas or groceries, but fees are tied to these accounts unless you’re a minor or student.
Monthly chequing fees are pretty standard across most banks and prices vary depending on how much access you need to your money. Before selecting what type of chequing account, you want, you should assess how many transactions you make on a monthly basis, the amount of money you usually withdraw, and how many times you send e-transfers. The pricier chequing accounts give you more fluid access while transactions can be limited when you have a more basic account.
It’s important to choose what’s right for your finances. Doing the research and cross-referencing account rates from big-name banks such as TD, Scotia, CIBC, and RBC, or smaller named banks such as Tangerine, will help you narrow down what is best for you.
A savings account is typically in place to put money away for the long haul. This low-risk account is accessible and can be transferred into your chequing account if needed, but some banks have a limit on the number of times you can take money out of your savings account per month.
Your savings account provides a safe spot for future investments and as an added bonus you pay no fees while accumulating a small interest rate on your balance. A savings account is the first step to managing the money you’re willing to invest in and helps maintain a stable financial foundation before building a bigger portfolio.
What’s the Difference?
Chequing accounts are for everyday use and usually have monthly fees, while savings accounts are intended for long-term savings where minor interest is accrued yearly. It's beneficial to have both of these accounts when building your financial portfolio and in the age of digital finances, mobile banking had made it easier to access and manage both chequing and savings accounts.
By Surina Nath