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Understanding Chequing Accounts in 2025

We examine the ubiquitous chequing account – its versatility, benefits, types and more – and why it’s so popular

Updated

7 min. read

What is a chequing account?

A chequing account is the most common type of banking account for everyday transactions. Whether you need to send money using INTERAC e-Transfer^®§, deposit your pay cheque, withdraw money from an ATM, pay bills, or shop online, a chequing account facilitates these activities.

Most chequing accounts are typically linked to a debit card and cheques, making it convenient to handle both large and small purchases.

Plus, these accounts often offer additional features such as automatic bill payments, opting into overdraft protection, and the ability to write personal cheques for payments.

How do chequing accounts work?

Chequing accounts are essential tools for managing daily financial activities, offering versatility in transactions. And they can be set up easily.

Opening an account

You can open a chequing account in person at a local branch of your bank or credit union. Most banks also allow you to open a chequing account online, from the comfort of your own home. To open an account, you'll need to provide some personal information, which might vary depending on your chosen method of application.

If you’re opening an account in-person, be prepared to provide some personal information including your Social Insurance Number, and two pieces of government-issued ID which is used for verification. If you don't have any government-issued ID, you can use alternative forms of identification such as a credit card or a tax assessment notice.

For convenient online applications, you may be prompted to provide essential information such as your name, contact details, Social Insurance Number, Canadian address, and employment details.

Once your account is open and you’ve deposited funds, you can start using it.

What can you do with a chequing account?

A chequing account is great for your everyday banking tasks, like:

Cash deposits and withdrawals from ATMs
Debit card purchases
Cheque deposits
Bill payments or pre-authorized payments (PAC)
CRA direct deposit tax refunds and benefit payments
Money transfers
Expense tracking
Writing cheques

Of course, how you use your account will depend on your lifestyle, financial habits, and goals. The good news is that chequing accounts come in different forms to match different needs.

Account fees

When using a chequing account, you may encounter various fees depending on the type of account you choose. Banks often charge monthly account fees, along with additional per-item fees for certain activities, such as exceeding the limit of daily transactions, withdrawing from a third-party ATM or completing Global Money Transfers.

However, many financial institutions offer ways to reduce or eliminate these fees. For instance, maintaining a minimum balance in your account may allow you to waive monthly or annual fees. If that’s not possible, consider a low-fee chequing account.

By understanding banking fees, choosing a suitable account for your everyday banking needs, and managing your account wisely, you can make the most of your chequing account while minimizing costs.

Common chequing account features

While specific offerings may differ from one chequing account to the next, several features are common to most accounts. Here’s a closer look at what you can typically enjoy with a chequing account:

Digital banking access

Once you've set up your chequing account, most banks offer the ease and convenience of managing it online or through their mobile apps. This means keeping track of your finances has never been more accessible. For example, BMO offers a mobile banking app that includes digital features to help you make real financial progress, including BMO Insights, BMO Savings Goals, and BMO Alerts.

Security

Most major Canadian banks ensure chequing accounts are protected by the Canada Deposit Insurance Corporation (CDIC) for up to $100,000 per depositor, per insured bank. This provides an extra layer of security for your hard-earned money.

Overdraft Protection

To prevent the inconvenience of declined transactions, you can apply for overdraft protection and add it to your chequing account. This feature ensures that your transactions can be processed even if your account balance is insufficient, thereby avoiding the associated fees and disruptions.

ATM and branch access

You can use your debit card to withdraw or deposit money at ATMs or in-branch. For instance, BMO provides access to over 3,300 fee-free ATMs across Canada, ensuring your money is within reach.

Cheques and debit cards

Upon opening and funding a chequing account, you're typically equipped to write cheques or use a debit card, seamlessly linking these tools to your new account for easy transactions.

INTERAC e-Transfer service

INTERAC e-Transfer transactions allow you to seamlessly send, request and receive funds – whether paying your contractor, sending a gift to your niece on her birthday or repaying a friend.

Unique benefits of a chequing account

Aside from those common features, chequing accounts can also offer unique advantages. Let’s take a look at two of those distinctive benefits.

Rewards programs

It feels good to earn points just for shopping, doesn’t it? Well, you’ll be pleased to know that some chequing accounts offer reward points on debit purchases which can be redeemed for goods, services or cash. BMO’s AIR MILES ® Chequing Account, for instance, offers 1 AIR MILES® Reward Mile for every $30 spent on your BMO Debit Card.

Multi-Currency Accounts

If you frequently travel abroad, whether for work or pleasure, a multi-currency chequing account can be useful. Take BMO’s U.S. chequing account which can be opened in Canada to help you manage your banking needs on both sides of the border. BMO customers can open both CAD and USD chequing accounts at no additional cost.

Some chequing accounts offer unique benefits such as rewards programs and multi-currency accounts.

Key benefits & limitations of a chequing account

Benefits

Here’s why a chequing account can be an invaluable addition to your financial toolkit:

Easy access to funds: At the top of the list is the flexibility and convenience it offers. Accessing cash is easy with a chequing account, which allows you to withdraw or deposit funds at a branch or ATM.

Simplified payments: Use your debit card to make purchases in-store, online, or in-app, pay bills online, and securely send money via INTERAC e-Transfer.

Transaction versatility: Chequing accounts are ideal for daily banking transactions and purchases. Many accounts offer a set or even unlimited number of transactions per month, providing you with essential flexibility.

Direct Deposit: Employers can deposit your paycheque directly into your chequing account, saving you time and reducing the risk of lost or delayed paper cheque. You can easily access your direct deposit information (such as your account details and a void cheque) through your bank’s online banking portal.

Tailored benefits for specific groups: Some chequing accounts offer additional benefits to certain groups. For example, students may be eligible for student bank accounts, while seniors, kids and teens can take advantage of bank accounts with special discounts. We also offer personalized services and special offers for Indigenous communities. Additionally, newcomers to Canada can access special welcome programs to help them get set up for banking in Canada.

BMO, for its part, also provides specific chequing product benefits.

Limitations

Naturally, chequing accounts come with certain limitations that you should be aware of. Some of the key restrictions include:

No or low interest rates: Unlike savings accounts, chequing accounts generally do not earn interest on the funds deposited. This means your money is not working to generate additional income while it sits in your account. Opening a savings account can help grow your funds and support your personal savings goals.

Monthly fees: Depending on the type of chequing account you have, you might incur monthly fees. These fees vary but can add up over time if not managed properly.

Transaction fees: Exceeding a specified number of transactions per month or performing particular transactions, such as using out-of-network ATMs, may result in additional charges. It’s important to be aware of your chequing account’s fee structure to avoid unexpected costs.To help reduce transaction fees, customers should regularly review their account statements to identify patterns in their banking activity.

If they notice frequent fees for exceeding transaction limits or other charges, they can consider reaching out to their bank to discuss switching to an account type that better fits their needs.

Check out BMO’s Family Bundle Program which allows family members to open up to 20 individual chequing accounts under eligible plans - for only one monthly plan fee.

Minimum balance requirement: You may be required to keep a minimum balance in your chequing account to waive the monthly fee.

Different types of chequing accounts in Canada

In Canada, there are several types of chequing accounts available, such as:

Basic chequing account

Also referred to as a personal chequing account, a basic chequing account is the most popular type available. They’re used to manage everyday banking interactions and, like the name states, offers all the basic features one needs.

Low-fee chequing account

Low-fee chequing accounts are an economical choice for those looking to reduce their monthly fees and who don't need additional features.

Youth/Student chequing accounts

Created for those under the age of majority, youth chequing accounts have no monthly fees until you turn 18. After that point, you can switch to a student account which typically has low or no monthly fees, unlimited transactions, access to student programs and other benefits.

U.S. chequing account

If your pay cheque is in American dollars or need the currency for another purpose, this account is for you (avoiding the inconvenience of converting funds to Canadian dollars).

Business chequing account

Business chequing accounts are specifically designed to help manage a business’s day-to-day transactions.

Joint chequing account

If two or more people want to share an account, they can open a joint chequing account. Every account member has equal access to the funds, making the account particularly popular among spouses and family members.

Senior chequing account

For individuals aged 60 and above, these accounts provide reduced monthly fees and additional benefits such as discounted safety deposit box rentals.

What’s the difference between a chequing and savings account?

The main difference between a chequing account and savings account is how many transactions you can make per month, fees and interest earning potential. Chequing accounts are primarily used for managing daily transactions, while saving accounts are more suitable for short- and long-term savings goals.

Additionally, most chequing accounts do not pay interest on deposited funds, whereas savings accounts offer returns at varying interest rates depending on your account.

How to choose the right chequing account for your needs

Not sure what features you need in your chequing account? Start with how often you’ll use it, and how much you intend to keep in it. Consider things like:

Number of account transactions: If you move money frequently, pay attention to transaction limits. A transaction is a financial transaction conducted through the bank, such as sending money, making a purchase, or transferring funds between accounts.
INTERAC e-Transfer transaction limits: Do you often send money? Ensure you choose a chequing account with an adequate number of INTERAC e-Transfer transactions included in its plan, if you frequently transfer funds. If so, make sure to select a chequing account that includes sufficient INTERAC e-Transfer transactions in its plan.
Account overdraft protection: If you’re worried you may not have enough funds to cover upcoming expenses, overdraft protection can help you avoid the inconvenience of extra fees and declined transactions.
Monthly fees and minimum balance waiver: Chequing accounts typically come with a monthly fee. Moreover, customers can often reap more benefits and better features if they choose an account with higher fees. But those monthly fees are typically waived if one maintains a minimum balance throughout the calendar month. The question is whether you believe you can maintain that amount. If not, another account type may be a better choice.
Product bundle offers: Some banks offer product bundles with chequing accounts. They include various benefits when you combine a chequing account with other products like savings accounts or credit cards.

You can begin by comparing the features of chequing accounts, or you can use our tool to help you choose.

Final Thoughts

If you’re looking for a safe and convenient account to keep money destined for day-to-day transactions, a chequing account is a good bet. Whether depositing your pay cheque, paying your bills, withdrawing funds or making purchases, a chequing account is flexible and easy to use.

Despite not commonly made to earn interest, it’s no surprise that chequing accounts are one of the most popular accounts in Canada.

With a variety of chequing accounts to choose from, it’s always important to compare chequing accounts before choosing one. Check out BMO’s chequing account overview to find the best one for your daily transactional needs.

Chequing FAQs

A chequing account is not the same as a debit card. A chequing account is a type of bank account while a debit card is a payment card that gives you access to funds from that account.
Chequing accounts are not free - most come with monthly fees. However, some banks offer no-fee options or waive fees as long as you maintain a minimum balance in the account.
It’s uncommon for a chequing account to pay interest on deposited funds, however there are some cases where a chequing account may earn interest at low rates.
Yes, a chequing account comes with a complimentary debit card which allows you to access your money at ATMs and make purchases where INTERAC is available.