Chequing vs. Savings Accounts

You may notice that at banks (and credit unions) you can open and use 2 different types of bank accounts: a chequing account and a savings account. 

Both accounts can be easily created and used, but there are some differences between them that you should know. 

Chequing account

This is the most common type of bank account that most people use in their daily lives. You can deposit money (cash, cheque, paycheque, or direct deposit) and withdraw money. You can also pay bills, send Interac e-Transfers, withdraw cash from ATMs, and more.

The only bad thing is that you usually don’t earn any interest on the money you have in the account.

Savings account

This bank account is good if you want to save up some money. This account is good because you can earn interest from the money you have saved in the account. So, this type of account is good if you want to save money for larger purchases (like vacations, cars, mortgages, etc.).

A savings account is not meant for frequent withdrawals or purchases and you usually have a limit of how much you can withdraw or purchase from this account each month (or you could be charged extra fees). These accounts encourage you to save, as you only have a limited number of transactions each month.

Conclusion

Thus, chequing accounts are good to use for your daily expenses and savings accounts are good for saving, and only using them when you buy something very expensive, or for emergencies.

It is a good idea to have both types of bank accounts and to have money in each.