Chequing Account: 4 Reasons Why you Should Keep a Minimum Balance
Article revised on 26 July 2018
According to the Financial Consumer Agency of Canada, a chequing account is a deposit account that’s used for managing day-to-day financial transactions. Why, then, would you allow your deposits and savings to dwindle if you need to use only a portion of the amount?
Here are 4 reasons why you should keep a minimum balance in your chequing account. If you’ve lost track of your spending, are you ready to get a handle on it again?
1. Resist temptation
If you have a large amount in your chequing account, it will be more tempting to dip into it, without considering the balance. Needless downsizing, impulse spending, decrease in savings are all negative consequences of giving in to temptation.
2. If you don’t need it, it’s not necessary!
Unless your bank requires a minimum balance to waive bank fees, only need to leave enough in your chequing account for necessary day-to-day transactions, such as paying your rent, buying groceries and gas for your car, paying debts, etc. What about pocket money? Allow yourself a weekly amount for coffees and lunches, and withdraw it in advance. Do so, and you will quickly see that paper is more tangible than plastic. It will be easier for you to stick to your budget.
3. Save money!
By transferring to a savings account any monthly sums you don’t need to maintain your lifestyle, you can save faster and more easily, while making a definite distinction between “present needs” (as in day-to-day transactions) and “future needs” (as in savings).
4. Make your money work for you!
Since chequing accounts rarely offer interest, your money will grow more in an online high-interest savings account. This type of account is accessible, user friendly and charges no service fees. It is designed to help you save your money. The earlier you start making contributions, the more they will grow! Lack self-discipline? Set up automatic transfers, and the work is done!
If you are not able to save, even by keeping a minimum balance in your chequing account for your activities and day-to-day transactions, perhaps it’s time to take a look at your lifestyle and make a new budget that’s in sync with your means.
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