What's the difference between a chequing and a savings account?
Updated 
3 min. read
When it comes to managing your money, it's all about having the right tools. And one of the best tools you can have is a bank account. But what’s the difference between a chequing account and a savings account? And do you really need both?
Compare chequing vs. savings accounts and learn how you can use them both to your advantage.
What's a chequing account?
A chequing account is a type of bank account where you can deposit money (like when you receive your payroll, deposit a cheque or receive a direct deposit) or make withdrawals for your day-to-day expenses, like groceries, meals, gas, and other basic necessities. You can also pay bills, send Interac e-Transfers, withdraw cash from ATMs, and more.
Pros and cons of chequing accounts:
Pros: You can write cheques, pay bills, make debit purchases using your debit card, withdraw cash, send e-transfers and more.
Cons: You usually don’t earn any interest on the money you have in the account.
What's a savings account?
A savings account is a good place to set money aside to earn interest and grow over time. Think of it as a place to build a safety net or to save up for larger expenses like a well-earned vacation.
A savings account is a good place to set money aside to earn interest and grow over time. Think of it as a place to build a safety net or to save up for larger expenses like a well-earned vacation.
You can use your savings account for some of the same things you would normally do with a chequing account (like withdrawing cash from an ATM) but it could lead to extra fees. A savings account isn’t meant for frequent withdrawals. Instead it encourages you to save, so you only have a limited number of free transactions per month.
Pros and cons of savings accounts
Pros: Earns interest so your savings keep growing. You can easily access your money, can set up automatic deposits to steadily build your savings.
Cons: You usually get a small number of free transfers per month, you can’t make debit purchases or write cheques, and you might have to pay higher fees for taking out money at an ATM.
Chequing vs. savings accounts: Why you need both
The combined power of a chequing and savings account can make it easier to manage your money. Both serve a distinct purpose. Think of your chequing account as your "right now" money, while your savings account holds your "future" funds.
One way that your chequing and savings accounts work together is with automatic transfers. They're quick and easy to set up, and allow you to move a little money from your chequing account to your savings automatically each month. That way, you can watch your savings grow without ever having to think about it. It makes budgeting a lot easier and you can even set up alerts to give you a heads-up when you’re running low on money.
Let’s say you set up an automatic transfer of $100 from your chequing account to your savings account every two weeks (to match up with payday). In one year, you could save up to $2,600 plus interest!
Tip: You can open multiple chequing and saving accounts without paying an extra fee with Family Bundle.
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