When you walk into a Canadian bank to open an account, you'll immediately be asked: chequing or savings? If you're used to a system where one account does everything, this can be confusing. Here's the breakdown.
Chequing Accounts: Your Everyday Wallet
A chequing account is your day-to-day transactional account. It's designed for frequent use:
- Receive your paycheque via direct deposit
- Pay bills and set up pre-authorized payments
- Use your debit card for purchases and ATM withdrawals
- Send and receive Interac e-Transfers
- Write cheques (if needed for rent or other payments)
Chequing accounts usually have unlimited or high-volume transactions included. The tradeoff: they pay little to no interest on your balance, typically 0% to 0.01%.
Savings Accounts: Your Money's Home Base
A savings account is where you park money you're not spending day-to-day. It's designed for accumulating funds:
- Higher interest rates than chequing (ranges from 0.5% to 5%+ at online banks)
- Fewer free transactions per month (some have limits)
- Not meant for frequent debit card use
Interest Rate Comparison (2026)
| Institution | Chequing Interest | Savings Interest | |---|---|---| | RBC | 0% | 0.5–1.5% | | TD | 0% | 0.5–1.5% | | Scotiabank | 0% | 0.5–1.5% | | EQ Bank | 0% | 3.5–4.5% | | Tangerine | 0% | 1–2% |
How to Use Both Together
The most efficient setup for newcomers:
- Chequing: Receive your paycheck here. Pay all bills from here. Keep 1–2 months of expenses as a buffer.
- Savings: Transfer excess money here immediately after payday. Let it sit and earn interest.
This "pay yourself first" system is a common personal finance strategy. Automating the transfer from chequing to savings every payday means you save without thinking about it.
TFSAs: The Ottawa Savings Cheat Code
Once you've been a Canadian resident for a year, look into opening a Tax-Free Savings Account (TFSA). The interest you earn inside a TFSA is completely tax-free, which makes it significantly better than a regular savings account for most people. Ottawa residents can contribute up to $7,000 per year in 2026, with cumulative room available if you haven't used it before.
Which Should You Open First?
Open a chequing account first: you need it to function financially. Add a savings account as soon as you have money to set aside. If you're at an online bank like EQ Bank, their account functions as both (high interest on your balance plus unlimited transactions), which simplifies things.
The Cheque Thing
Many newcomers are surprised that Canadians still use paper cheques. Landlords, employers (for final payouts), and government entities sometimes send cheques. You don't need a cheque book on day one, but know that your bank can order one and that depositing cheques through your mobile app (by photographing them) is standard in Canada.
