The Basics: What We’re Told Chequing Accounts Are For

• Daily banking: Paycheques get deposited here, and bills get paid from here.

• Unlimited access: You can withdraw, pay, transfer, and use debit cards freely.

• Convenience: One-stop hub for your day-to-day money.

• Low interest isn’t a concern: Because this account isn’t “for saving.”

That’s the pitch. Simple, safe, convenient.

The Pros of Chequing Accounts

High liquidity: You can access your money instantly, whether through debit card, e-transfer, or ATM.
Central hub for transactions: Perfect for handling bill payments, direct deposits, and everyday purchases.
Overdraft protection (optional): A safety net if you dip below zero (though it comes with fees/interest).
Digital integration: Works seamlessly with mobile apps, online banking, e-transfers, and payment systems.

The Cons of Chequing Accounts

Little to no interest: Your money doesn’t grow. In fact, most chequing accounts pay 0% interest.
Fees and charges: Monthly fees ($5–$30) are common unless you keep a minimum balance.
Overdraft traps: While overdraft can protect you, the fees/interest can be steep if you rely on it.
Erosion by inflation: Keeping large sums here means your purchasing power shrinks over time.

What Most People Don’t Realize

Here’s the part banks don’t highlight:

• Chequing accounts are profit centres for banks. Every time you keep money there, the bank lends it out and earns interest—while paying you nothing.

• You’re paying for access, not growth. The monthly fee is essentially a subscription cost to manage your own money.

• Inflation silently eats away. Even if you avoid fees, $1,000 sitting in chequing today will buy less a year from now.

The Reality: What Chequing Accounts Are Really For

• They’re transaction engines, not storage tanks. Chequing is designed for money to move through it, not to sit in it.

• They’re not for saving. If you leave extra money in chequing, you’re losing potential growth (and banks love that).

• They’re best used as a flow-through tool. Income comes in → expenses go out → the rest should be moved to a high-interest savings account, a TFSA, an RRSP, or an investment account.

The Smart Way to Use a Chequing Account

• Keep only what you need for monthly expenses. Don’t park your emergency fund here.
• Automate transfers. Each payday, sweep extra funds into savings or investments.
• Shop for lower fees. Many online banks offer no-fee chequing.
• Use it as a money hub, not a money graveyard.

Bottom Line

Chequing accounts are essential—but not in the way most people think. They’re not meant to grow your wealth. They’re meant to handle transactions smoothly while banks quietly profit from your deposits.

Understanding this difference is the first step toward financial freedom: stop letting your money sleep in chequing, and start putting it where it can actually work for you.