So I had a meeting with a financial advisor not long ago, and she strongly recommended i set up a chequing account for my payroll to go into, as opposed to it going directly into my savings account like it always has been. I said yes without really thinking it through, but…before I talk to HR about where they deposit my payroll, what is the difference between a chequing account and a savings account? This is for Canadian banking btw.
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In Canada: chequing is where you spend money from savings is where money sits and collects dust.
If you want to make money on your savings, that’s where investment accounts (TFSAs, RRSPs, stocks) come into play while your savings is for something like your emergency fund – it’ll make nominal interest monthly and as easy to access as the funds in your chequing account.
HOWEVER, if your savings account is linked to your debit card and that’s where you do your spending from? You are very likely being charged astronomical fees to do that, which is why having a chequing account would be beneficial: usually you get a certain amount of free transactions a month. Unlimited free transaction accounts are also an option, but may require a minimum account balance if you’re at a major bank; smaller and online banks are a cost effective work around though.
Lastly, your “financial advisor” is a sales person, opening up a new bank account for you goes towards her sales, so keep that in mind before making any decisions or deciding to open a chequing account at your current financial institution.
so TL;DR: you can give HR a void cheque for your savings account but if you are spending from that savings account, you may want to look into if that’s the best deal for you.
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