# How much in chequing account?



## christinad (Apr 30, 2013)

I will be moving from the $5000 td canada trust account to PC financial where you don't need a minimum. What is the minimum I should have? Most of my savings is in my peoples trust tfsa which isn't very accessible. However, I can't really think of anything I'd immediately need money for. Maybe a plumbing emergency? I'd appreciate your input.


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## MRT (Apr 8, 2013)

anything that is truly an unforeseen emergency can be put on a credit card or PLC for the very short period of time it may take to access funds earning a better return (TFSA, cashable GIC, HISA, or whatever your preference is for storing accessible savings).

I have no idea why people keep a ton of cash in a chequing account when they can simply maintain a free, zero-balance PLC or credit card, to be honest.


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## brad (May 22, 2009)

I basically let my chequing account live paycheck to paycheck: I keep enough in there to cover my basic living expenses until the next time I'm paid. All the rest goes to my savings account.

In the US, where even "high interest" savings accounts pay a small fraction of 1%, you might as well keep more in chequing for the convenience. But here in Canada where savings accounts pay more, it makes sense to keep more of your liquid cash in a high-interest savings account and as little as possible in chequing.


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## the-royal-mail (Dec 11, 2009)

I try to keep around $1000-2000 in my everyday account as a minimum basic float. The reason for this is sometimes a large payment such as rent, mortgage or large CC bill payment may come out before the next paycheque goes in. I think it is important to keep that amount there as a minimum. The rest of my savings go to TFSA, HISA etc but I do wait to do the transfer until there is enough money to make a difference in the destination account. I tend to transfer large chunks at a time to minimize the number of transactions. So there will be times when the POSA will have more than the basic float.


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## DayTek (Sep 26, 2013)

brad said:


> I basically let my chequing account live paycheck to paycheck: I keep enough in there to cover my basic living expenses until the next time I'm paid. All the rest goes to my savings account.
> 
> In the US, where even "high interest" savings accounts pay a small fraction of 1%, you might as well keep more in chequing for the convenience. But here in Canada where savings accounts pay more, it makes sense to keep more of your liquid cash in a high-interest savings account and as little as possible in chequing.


+ 1, Same here.

I don't like money just sitting in my chequing account. I prefer it spread out over multiple savings accounts, each with a specific purpose. I like organization in general, so "organizing" my finances is just part of the habit. It also helps me be more disciplined with my money (not that I'm in the habit of impulse buying, but it makes it more difficult to spend if it's in a savings account).

However, some people, exampled by @the-royal-mail, like a float in their chequing account for certain reasons. I know several people who keep around $5000 in their chequing account for emergencies or whatever. They just don't spend it and treat it like a $0 balance. Personally, with my organizational OCD, that would drive me nuts...LOL.


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## MrMatt (Dec 21, 2011)

I keep the minimum to have no fees ($2000 isn't too much)
I do my transactions from my line of credit (no fees)

Otherwise I keep the money in a TFSA at a bank (Scotia has decent high interest options).


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## rikk (May 28, 2012)

I have a chequing and savings accounts with PCF. It's a one day transfer of $$s from the savings to the chequing (and vice versa) so no need to keep much in the chequing ... I keep about $200 in the chequing in case I need cash at an ATM. Most of my bills I pay electronically from the chequing so it's just a matter of making sure the $$s are there to cover the payment. I also have overdraft protection ... came in handy when I forgot to transfer funds to cover a payment. OT: Most of my savings are at Peoples Trust ... currently 1.8% ... and that could take up to 5 days for a transfer.


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## AltaRed (Jun 8, 2009)

Whatever I need to meet 'no fee' requirements plus an amount put into the account the first week of each month to cover that month's bills.


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## christinad (Apr 30, 2013)

Thanks for the responses. I am inclined to keep a float as People's trust is slow to transfer. If PC Savings is fast to transfer, maybe i'll keep some savings in there instead so I can keep it lower.


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## HaroldCrump (Jun 10, 2009)

I calculate my chequing account's balance as follows:
Current month's expenses (forcasted 1 month in advance) + Minimum balance required by bank + approx. $500 of "buffer"

The last item is in case of any unexpected auto-debit charges getting posted, such as a long-forgotten magazine subscription, AOL account signed for in 1998, etc.


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## Synergy (Mar 18, 2013)

christinad said:


> I will be moving from the $5000 td canada trust account to PC financial where you don't need a minimum. What is the minimum I should have? Most of my savings is in my peoples trust tfsa which isn't very accessible. However, I can't really think of anything I'd immediately need money for. Maybe a plumbing emergency? I'd appreciate your input.


Why not just set up an unsecured personal LOC at TD and use it as your chequing account? No fees, acts as free overdraft protection, free cheques, etc. I've been set up this way for the past 5 years, never used the LOC, never paid any banking fees, interest charges, etc.

I keep just enough cash in my chequing account in order to cover my monthly expenses.


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## My Own Advisor (Sep 24, 2012)

We keep a few $k for living expenses in our chequing account.

We keep about $1,000-$2,000 or so in our savings account, for new, major purchases or upcoming travel.

We have an emergency fund just over $5,000.

We keep about $1 k in USD for travel.

Everything else is invested.


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## ashin1 (Mar 22, 2014)

I literally just keep enough in my chequings to cover my rent and credit card bills. every dollar i spend is on my BMO world travel elite. rack up some points ahah. but i try and have 90% of my assets invested in the markets.


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## RBull (Jan 20, 2013)

Simple answer. 

Enough to pay 1 month's expenses plus buffer of a few hundred. Everything including cc on auto debit. Very easy.


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## My Own Advisor (Sep 24, 2012)

Simple is good RBull.


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## RBull (Jan 20, 2013)

Thanks My Own Advisor. I agree.


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## travelgeek (Nov 29, 2009)

brad said:


> I basically let my chequing account live paycheck to paycheck: I keep enough in there to cover my basic living expenses until the next time I'm paid. All the rest goes to my savings account.


This is what I do too. Though I will keep an extra $1000 or more in the account if I'm travelling, just in case my other cards don't work.


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## kcowan (Jul 1, 2010)

Our regular cheques go into our investment accounts and I transfer money out to cover expenses as needed. This keeps me aware of our rate of spending. If I die, things will grind to a halt.


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## Eclectic12 (Oct 20, 2010)

christinad said:


> ... If PC Savings is fast to transfer, maybe i'll keep some savings in there instead so I can keep it lower.


Both the PC savings as well as the TFSA savings are "next business day" to transfer to the chequing account. 
So setting up the transfer before 3pm on Monday means the cash is in the chequing account on Tuesday (assuming Tuesday is not a holiday).

So I tend to leave only $200 to $600 (depending on what bills are coming up). For large bills, I pre-program a transfer for the day before I want to pay a large bill and pre-program the bill to be paid the day after the transfer. For example, if the bill is due on a Friday, I program the transfer for Tuesday and the bill to be paid on Wednesday.


Once or twice I've remembered late in the day that I'm short of cash in the chequing account so I've used my LoC to put cash into the chequing account immediately and then programmed the savings/TFSA savings to pay off the LoC on the next business day.

I have to remember at the end of the month to pay off the LoC but in those instances, I paid something like $0.30 to avoid a late payment fee that was much higher. 


Cheers


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## AltaRed (Jun 8, 2009)

Unless you really like that kind of daily management of a chequing account, it is a time consuming effort with little reward. For example, if one assumes a $4000 cash flow each month, that is worth less than $25 per year BT in lost interest ([email protected]%) divided by 2 for half month holding period.


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## GreedIsGood (Dec 4, 2013)

And here I am sitting with 20k in my chequing... lol


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## Moneytoo (Mar 26, 2014)

GreedIsGood said:


> And here I am sitting with 20k in my chequing... lol


I've been begging my husband to keep less than 30K in our TWO chequing accounts each - we compromised on 17K... lol


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## jamesbe (May 8, 2010)

LOL yeah, was reading the first page then I'm like wow, I feel like I have to have $15-$20k min.


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## gardner (Feb 13, 2014)

I keep way too much in my chequing account, which is also where my ETF payments go. The problem is that rent payments, tax refunds, pay cheques and so on pile up in there and I have to do work to transfer it into my brokerage account and get it in a HISA or ETF or whatever. I need a direct deposit to my brokerage account that is conditionally driven by the balance in my chequing acct -- maybe anything over $20K spills over into my brokerage and buys HISA units. I have never seen this to be possible.


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## JordoR (Aug 20, 2013)

Similar to others, I only keep the minimum required to cover my rent and other monthly regular payments as they all come out of my chequing account. Usually it sits around 3-4K.


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## wendi1 (Oct 2, 2013)

PC Financial has a low-cost overdraft protection. I take my chequing account down to almost zero most months, and pay a trivial amount for overdraft if I miscalculate (doesn't happen very often).

However, hubby and I have full TFSAs, and my corporation (which pays my salary) has a large float of cash. So I don't really need an emergency fund. If you need a little sumpin' for emergencies, you might want to leave a few K in your chequing account, assuming you don't have a ready source of extra cash.


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## Eclectic12 (Oct 20, 2010)

AltaRed said:


> Unless you really like that kind of daily management of a chequing account, it is a time consuming effort with little reward...


I'm not sure where the time consuming effort is thought to be coming from.

There's the transfer from chequing to savings every two weeks when the pay comes in and I typically program the bill payments at the same time.

Then it's keep on eye on if there is any additional cash withdrawals that need a top up to the chequing account.


Cheers


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## Sherlock (Apr 18, 2010)

Mine sits at $1500-2000, enough to avoid fees plus a small buffer. Most of my bill payments (rent, car insurance, club memberships, etc) come out of my line of credit, which I've found is much nicer than using your chequing accoutn directly.


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## OnlyMyOpinion (Sep 1, 2013)

If you have money going out of chequing monthly to buy etf units or some other investment that's great.
We don't have monthly purchase plans so new cash tends to accumulate in the chq account until we periodically move it into the trading acc.
Once there it is as likely to go into a HISA until a long term investment is made.
With interest rates as low as they are (even in a HISA), and because it's taxable int, we don't get too fussed about keeping the chq account low.


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## RBull (Jan 20, 2013)

gardner said:


> I keep way too much in my chequing account, which is also where my ETF payments go. The problem is that rent payments, tax refunds, pay cheques and so on pile up in there and I have to do work to transfer it into my brokerage account and get it in a HISA or ETF or whatever. I need a direct deposit to my brokerage account that is conditionally driven by the balance in my chequing acct -- maybe anything over $20K spills over into my brokerage and buys HISA units. I have never seen this to be possible.


No offense please but sounds like you just need to get and stay organized. This is pretty simple stuff!


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## NorthernRaven (Aug 4, 2010)

I've got a high-interest savings account with Hubert, and one thing I do to reduce volatility in my TD chequing account is have all my pre-authorized debits (rent, car payments when I had them, etc) done from the Hubert account. With fewer big transactions on the chequing account, it is easier to stay closer to the minimum amount. This works because Hubert doesn't have transaction fees - I don't know what other HISAs are without fees - most of the other Manitoba CUs charge $1 after the first transaction. ING/Tangerine doesn't have fees, but I'm not sure if you can set up PADs against their savings account.


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## GalacticPineapple (Feb 28, 2013)

I keep $12,000 because that's what Liz Lemon does.


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## marina628 (Dec 14, 2010)

We keep just a few hundred over the minimum amount.


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