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Getting the most from your chequing account

January 7, 2020   5 minute read

Here are 8 tips for making the most of your chequing account.

Your chequing account is a hub for your day-to-day financial transactions. There are many chequing account options, with various features and fees. So it’s worthwhile to spend sometime considering your requirements, comparing options, and choosing the account that best meets your needs.

Here are 8 tips for making the most of your chequing account:

  1. Get paid automatically
    Set up direct deposit to channel your paycheque and other regular sources of income into your account. 
  2. Pay bills automatically
    Set up automated bill payments or debits to ensure all your recurring payments are made on time, every time. No more keeping track of due dates or worrying about missed payments.
  3. Save and invest automatically
    Prioritize shorter-term savings goals by setting up automatic transfers from your chequing account to a savings account each month. You can even consider moving funds to more than one savings account to save for distinct goals. For longer-term savings goals, set up automatic payments to an investment account.
  4. Consider having more than one chequing account
    There are many reasons why having more than one chequing account might suit the way you manage your money. For example, it may work best for you and your spouse to have separate accounts. You may want to dedicate a separate account for paying recurring bills. Separate chequing accounts might also help you set and stick to budgets for different spending categories. For example: one account for groceries, another one for entertainment and eating out.
  5. Get online and go mobile
    Sign up for online banking and download your financial institution’s mobile app to your phone or tablet. You’ll love having the freedom to check balances, pay bills, transfer funds, monitor transactions, and more, from anywhere, at any time. You can even deposit a cheque using the app and the camera on your phone.
  6. Stay alerted
    If you’re enrolled in online banking, you can set up alerts to notify you of certain activity, via email, text or both. For example, an alert when your balance drops below a certain level, say $500, can help you avoid an overdraft situation. Other alerts can be sent when a payee is added to your account, or when a withdrawal is made over a certain amount that you can set.
  7. Get overdraft protection
    Life happens. If you spend more money than you have in your chequing account, you’ll be charged an overdraft fee. If you write a cheque but have insufficient funds when it’s cashed, the typical NSF fee is $40-$50. That’s why it’s a good idea to arrange some protection. Depending on the institution, that might be adding a line of credit to your chequing account, linking your chequing account to another account, or some other overdraft feature. Review the terms and fees involved before signing up.
  8. Stash cash elsewhere
    Chequing accounts pay little or no interest so they’re not the place to keep larger amounts of cash that you don’t need in the next few months. Better to set a savings goals and move that cash to a savings account.

Additional tip to consider: Automated bill payments vs. automated debits

Automated bill payments are best suited to recurring payments for fixed amounts, such as an insurance premium, gym membership, or a regular donation to a charity. You arrange for a set amount of money to go from your account to the merchant on a fixed frequency, such as the first or the 15th of the month.

Automated debits are best suited to recurring payments for variable amounts, such as a hydro or gas bill. You give permission to a merchant to debit your account for a variable amount on fixed frequency.