In Canada, every citizen is legally entitled to a bank account as long as they show proper identification. The chances are high that you’re here not because you’re looking to open your first bank account but because you feel that your current bank may not be the right one for you.
In this article, we’re going to help you decide if you should be searching for a new bank to help handle your finances.
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The Best Canadian Bank Will Be Different for Everybody
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Before we talk about whether your current bank account fits your needs, we do want to point out that there is no such thing as the absolute best Canadian bank. A bank account that may be right for one person may not be the best choice for another. This is why you’ll likely have to compare various banks in Canada to find the perfect one for your needs. That said, we’ve detailed a method at the end of this page to help you to save a huge amount of time while doing this.
Let’s briefly discuss the different features of bank accounts.
Bank Account Type
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In Canada, you can apply for two types of accounts. These are:
- Chequing accounts: This is your standard day-to-day bank account. You can use it to be paid by your employer and to pay for bills and purchases.
- Savings account: With a savings account, your money will collect interest. While accessing the money in your savings account is not impossible, it will be a bit harder to do than with a chequing account. Savings accounts usually come with withdrawal limits to encourage saving and discourage spending.
Ideally, you should have access to both types. If your current bank does not allow you to easily hold both a chequing and a savings account with them, then it may be the right time to switch banks. This is because, ideally, you should have both your savings and chequing accounts with the same bank. This makes managing your money a lot easier, plus you get to avoid inter-bank fees.
Banks may have several different account options available, but pretty much all of them will boil down to being either a savings account or a chequing account. There are other account types dedicated to students or the elderly. If you fall into those categories, you may want to see a better bank account for your needs.
Savings Accounts
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When looking for savings accounts, there are a lot of things that you will need to consider.
The most important will be the interest rate. You want to ensure that the interest rate is as high as possible. If you think your current savings account’s interest rate is too low, then it may be high time to carry out a rate comparison and switch bank accounts.
You may also wish to find out whether your savings account has:
- Minimum deposit requirements
- Minimum balance requirements
A lot of savings accounts will require that you deposit a certain amount into them each month. In most cases, you are not allowed to let your balance to drop below a certain number. If you fail to meet the requirements, you will either be charged a penalty or be paid interest. Holding the savings account is effectively worthless at that point.
Savings accounts with minimum requirements do tend to have higher interest rates. Therefore, if you know that you can meet those requirements, then opt for one of those accounts.
It is also likely that there will be fees for withdrawing money from your account. If you are withdrawing money from savings accounts quite frequently, you may want to shop around and get a better deal on those fees.
Chequing Accounts
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When you’re searching for chequing accounts, the same principles apply. The only major difference is that you do not need to check interest rates.
We do want to point out that you can obtain low-fee bank accounts. As the name suggests, these bank accounts have low fees, so they are cheaper to maintain. However, with these bank accounts, you may be missing out on certain features.
Fees and requirements typically attached to chequing accounts include:
- A maintaining balance
- Minimum deposit requirements
- Cash withdrawal fees
- Direct debit fees
If you feel as if there is more money coming out of your bank account than you are happy with, it may be worth searching for a new bank account. A lot of bank accounts will waive certain fees if you hit pre-determined limits. Some may try to keep the fees as low as possible. While it is unlikely that your bank account will be completely free of fees, you can always work on bringing them down. That way, you can save yourself a little bit more money each month.
Your chequing account should (hopefully) allow ATM withdrawals. However, you will be surprised at how many bank accounts do not come with online banking as standard. You may not be able to access it without paying a fee, or the bank does not offer it. In our opinion, having online banking is vital as it makes dealing with your money so much easier.
Other Bank Account Features
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These are the features you should be looking at when looking for the best bank for your needs:
- Access to physical branches. While it may be cheaper to have an online-only bank account, sometimes there is no substitute for walking in and talking to somebody in a branch. This is even more important if you have more complex banking needs.
- Foreign currency support. Some of us will need to make and receive payments in foreign currencies. All banks will allow this to an extent, but fees will vary wildly.
- Overdraft protection. If going over your bank account limit before your next paycheque arrives is a regular occurrence for you, you might want to look into bank accounts with overdraft protection.
- Cheque books. Because, yes, some people still prefer to deal with cheques.
Other Financial Products
While you may not need access to other financial products right away, it’s good to know if your selected bank has these products available just in case. It will be infinitely easier to apply for financial products at the same place you hold your bank account. Such products include:
- Mortgages
- Loans
- Credit cards
Finding the Best Bank in Canada
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If you feel as if your current bank doesn’t meet your needs, it may be time to look for a new bank.
While it may be tempting to hop between bank websites to pursue the best bank account deals, it’s not the most efficient way to find the best bank for your needs. Not only is it time-consuming, but it makes it difficult to compare products between banks. As a result, you may end up settling for a bank account that isn’t right for you.
Our suggestion is to use a comparison website like Rate Genie. On this website, you can quickly find the best bank accounts in the country. It will allow you to compare bank account features swiftly as well. You’ll be able to accomplish in minutes what would typically take hours.
So, do you think you’d benefit from switching banks? What is bank account features most important to you? Share your thoughts below!