Choosing between a chequing account and a savings account often causes confusion for newcomers to Canada. In fact, they are not alternatives: most Canadians use both types of accounts for different purposes. A checking account becomes a financial “control center” for everyday transactions, while a savings account serves as a tool for accumulating funds at interest and achieving financial goals.
The main difference between a checking and savings account
A checking account is designed for everyday transactions: receiving paychecks, paying bills, making card purchases, withdrawing cash from ATMs, and sending Interac e-Transfers. It provides easy access to money but typically does not earn interest or offers a meager 0.01-0.10% per year.
A savings account is designed to hold money you don't need on a daily basis and earn interest on the balance. Current rates for high-yield savings accounts (HISAs) range from 2.5% to 5% per year, depending on the bank and promotional offers. However, these accounts have limits on the number of transactions per month and may charge fees for exceeding limits.
Comparison table: checking vs. savings
| Criterion | Checking account | Savings account |
|---|---|---|
| Main purpose | Daily transactions, bill payments | Accumulation and earning interest |
| Interest rates | 0-0.10% per annum | 1.5-5.0% per annum (HISA) |
| Monthly fee | $0-30.95 CAD depending on the package | Usually $0 |
| Number of transactions | Unlimited or 12-60 per month | Limited, fees for exceeding the limit |
| Access to funds | Instant via card, ATM, online | May take 1-2 days for transfers |
| Debit card | Included | Rarely included |
| Checkbook | Available | Usually not available |
| Minimum balance | $0-6000 CAD to waive fees | Usually no requirements |
How fees and interest work
Checking accounts: fee structure
- Basic accounts — $3.95–4.00 CAD/month, 12 transactions, $1.25 per additional transaction.
- Mid-range packages — $11.95–16.95 CAD/month, 25–60 transactions or unlimited, fee waiver with a balance of $3,000–4,000 CAD.
- Premium packages — $25-30.95 CAD/month, unlimited transactions, free international ATMs, additional benefits, no fees with a balance of $5000-6000 CAD.
Savings accounts: how to earn interest
High-yield savings accounts use compound interest. Promotional rates:
- Scotiabank MomentumPLUS — up to 5% for the first 90 days.
- CIBC eAdvantage — 4.90% for the first 3 months.
- Tangerine — 4.50% for the first 5 months.
Specifics of provincial and local banks in Calgary
ATB Financial: Alberta advantages
- Unlimited transactions with a balance of $2,000 CAD.
- HISA — 2.30% per annum.
- Local solutions, faster responses.
Servus Credit Union: a cooperative approach
- Profit sharing for members.
- $3.95–16.95 CAD/month, 15–60 transactions, free with a balance of $4,000 CAD.
- Flexible lending.
Online banks: an alternative to traditional institutions
Tangerine and Simplii
- Tangerine — No-Fee Daily Chequing, up to 4.50% on HISA for the first 5 months.
- Simplii Financial — 4.25% on HISA for the first 4 months, free e-Transfers.
Disadvantage — no branches.
Account combination strategies
Basic “two accounts” scheme
Checking account at a large bank + HISA at an online bank.
Extended “multiple goals” scheme
- Main checking account.
- Emergency HISA.
- Targeted savings accounts.
- TFSA investment account.
Practical tips for newcomers
First steps
Open a checking account at a major bank with a program for newcomers. After 2-3 months, add a HISA.
Automate savings
Automatically transfer 10-20% of your salary to a savings account.
Monitor fees
Track transactions to avoid exceeding limits.
Special cases and exceptions
- Students — free student accounts (CIBC, TD, BMO).
- Seniors — discounts (ATB 59+ Banking, Servus Senior Unlimited).
- Multi-currency needs — USD accounts (ATB, RBC, Scotiabank).
Conclusion
You need both accounts: a checking account for daily transactions and a savings account for passive income. Combine products from different banks, take advantage of promotions, and review the terms and conditions regularly.