Financial literacy 101: Chequing versus savings

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Picture this—you’re 15-years-old and the spring flu has your teacher down for the count. The friendly substitute teacher rolls in a clunky TV and you know Bill Nye is about to drop some knowledge.

If only Bill Nye the Science Guy told us how to balance our budgets.

Most schools don’t offer a class that focuses on smart saving, spending, and budgeting your money. Whether you see yourself as a big spender or seasoned saver, everyone can benefit from a financial refresher.

Today, we are bringing it back to the basics. As part of a three-part series on financial literacy, let’s begin with the differences between the two types of accounts that you’ll likely use the most: chequing and savings.


Your chequing account is your go-to for day-to-day transactions. Think of it as the starting point for the money you’ve got coming in, like your paycheck, and the place you’ll be taking money out of to make purchases or to pay your bills. Your chequing account will also include lots of ways to access your money, from taking out cash at an ATM to making payments online. Because this is the place where your money is coming in and out of regularly, these types of accounts often include a set number of transactions in exchange for a monthly fee.

Financial institutions offer lots of different chequing account options, ranging from no or low-fee accounts with just a few transactions included to all-inclusive packages with no transaction limits. What makes the most sense for you will depend on your individual spending habits, so it’s a good plan to have a sense of how you like to access your money and what you have coming in and out of the account.


Your savings account, on the other hand, is about putting money away and keeping it safe. It’s a great place to save any extra money that you don’t need to access right away—especially because savings accounts allow you to earn interest over time. This means, that on top of what you have saved, you will periodically earn a little extra based on the amount you’ve put away and the interest rate attached to your account.

Your savings account is a good place to put emergency funds or to put away money for a big purchase and, like your chequing account, there are lots of choices available. Most savings accounts don’t charge a monthly fee. Just keep in mind that because savings accounts are meant to be accessed less frequently, most financial institutions will often limit the amount of times you can withdraw from your account for free. But the more money you have and the longer it sits in your account, the more interest you’ll accrue.

Whether you are new to the world of managing your money or see yourself as a budgeting veteran, the smartest money move is talking to a financial expert. Your local credit union can help guide you through your finances and set you up for success.

Contact your nearest credit union to help you ace the basics.