Katie Stiner

Tracking every purchase and transaction to be informed about your account balances could be challenging.

You can easily manage chequing account transactions by phone, through online banking, or by ATMs. Banks also provide you with monthly statements to view your account’s monthly transactions and balances.

With 30% of Canadians citing financial stress as a significant worry over their overall health, managing finances may be stressful and challenging if you do not know what to do.

Chequing accounts will help you be accountable for financial transactions and stay ahead of your financial plans.

Paying attention and keeping track of your chequing account will help you avoid having a negative balance or accumulating interests. You can be charged or penalized, and the bank can suspend your account if the account continues to build up a bad history.

Learning how to manage your chequing account is necessary for you to keep a positive account history. Here are five ways to manage your chequing accounts.

1. Automate Your Finances

Nearly all banks in Canada provide an easy way for you to manage your finances automatically. The first thing you should consider is “paying yourself first” technique. This means building up savings.

Paying yourself first does not mean depositing cash in your savings account, but instead funding TSFA or RRSP investing accounts or investing in different financial goals like saving for retirement.

Set up automatic deposits, indicating the recurring periods and how you want the distribution of funds to be done. Wealthsimple and Nest Wealth let you set up automatic deposits into your investment accounts without any additional costs.

Automatic transfers make it easier for you to make payments and simple to remember every recurring transaction.

2. Avoid Overdraft Fees

Although overdrafts can be nice and help in your financial needs during emergencies, it is costly in the long run. You are required to pay back the amount with interest.

The interests are usually high, and you may end up paying too much. Overdraft protection is just like a loan your bank gives you when you try to withdraw more than your account balance.

Overdraft fees are charges your bank imposes on you for having overdraft protection. In Canada, the amount varies depending on the bank you in, as seen here.

On top of an overdraft fee, you will be charged an overdraft interest on the amount you have ‘borrowed”. The rate is usually between 21% and 22%, just like the credit card interest.

You can avoid overdraft fees by:

  • Switching to a chequing account that does not provide overdraft protection (non-sufficient funds fees can still apply if you go negative)
  • Go with the pay-per-use option that banks offer.
  • Maintain a minimum balance in your chequing account to cover unexpected expenses.
  • Use budgeting apps and financial tools to help you stay on top of your finances and avoid falling short of money in your chequing account.

3. Consolidate your Finances

Having several accounts to manage sometimes makes it difficult and time-consuming to track usage. You have to maintain a record of login information, different account balances, and which account to use to pay which bills.

If you have the same type of chequing account and its purpose is also the same, then it’s best to consolidate the duplicate accounts. You will be simplifying your finances.

It will be easier to monitor your checking account and avoid potential fees.

There are several benefits of having multiple chequing accounts, but only if they each have a unique purpose for your finances.

4. Spend What You Only Have In Your Chequing Account

It is important to learn not to write a check or make purchases without knowing if your account balance will be sufficient for the transaction.

Non-sufficient funds (NSF) fees are charged on accounts without overdraft protection, and an overdraft fee is charged on accounts with overdraft protection.

Both are excessively high and could negatively affect future access to financial services if not sorted on time.

5. Use Your Bank’s ATM

Many Canadian banks charge little or no fees to their customers using their ATMs. Banks can charge up to $5 for every transaction you make at the ATM.

You will be charged for using an out-of-network ATM, an ATM belonging to a different bank. Some banks also refund the fees charged for out-of-network ATMs.

Most people think that bank ATM cards only have a sole purpose; to withdraw money from ATMs. But ATMs have several other uses:

  • You can request a mini-statement for recent bank account transactions
  • You can deposit cash or cheques 
  • Request for new cheque books
  • Transfer funds between accounts in the same bank
  • You can pay utility bills 

Final Thoughts

Managing finances is a massive worry to 30% of Canadians who find it very challenging.

Proper management of your chequing account simplifies your finances and helps you keep track of transactions, bills, and budget. 

Adopting these five ways to manage your chequing account will make it easy for you to achieve your financial goals.

Share your thoughts on managing a chequing account below!

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