As a new resident of Canada, you want to integrate yourself into its society. There are several steps to do this. There is getting a driver’s license. Enrolling in health insurance is also a must. And, last but not the least, you need to get yourself a bank account.
Signing up for a bank account in a foreign land could be intimidating and daunting. This is the case especially when you have only done it in your country. Many questions abound:
“Will I be allowed to open a bank account?”
“Which bank do I choose?”
“Do I open a savings or a checking account?”
“What documents do I need?”
“Is there a minimum maintaining balance?”
“Will my deposits be insured?”
These are just some of the questions that new residents ask. In this article, we will answer each one to help you get your first (and hopefully, not last) Canadian bank account.
Could Newcomers (You) to Canada Open Bank Accounts?
People who go to Canada fall into two groups. There are those who will permanently stay and those who will not. Whichever group you belong to, you are legally eligible to open a bank account.
There are some differences in who Canadian banks consider “newcomers”. But, almost all will classify you as such. Proving your status is very straightforward. All you need to do is to present some of the immigration documents that you have! Easy! More on this in another section.
Many of the big banks in Canada will allow even temporary workers and international students to open accounts. In fact, they would be very happy about you doing so, regardless of your immigration status.
Now that you have been given a resounding “yes” to this question, let us go over things to consider when you choose a bank.
Considerations for Choosing a Bank
So, how do you choose a bank? Simple – do it in the same way you would in your homeland. In other words, despite some possible differences on your part, you do not have to change how you pick a bank. The way you do it at home could be pretty much the same as how you do it in Canada.
No need to worry about too many unfamiliar things to deal with.
Nevertheless, a list always helps with decision-making. So, here is a list of 4 things to consider when choosing a bank.
Physical Location
Before arriving in Canada, you might already have a list of banks to choose from. But, remember that you will be doing the following things:
- Getting a checkbook
- Taking out money
- Making inquiries about your balance or account
- Setting other appointments related to your finances
There is nothing wrong with doing these tasks remotely. But, it will always be better and easier to carry these things out face-to-face. Besides, for emergencies, a bank with a branch nearby would be very helpful.
This applies to the actual bank branch. This also applies to ATM availability.
Hence, when choosing a bank, try to go for one that has a physical presence in the city or town you will be living in.
Minimum Balance
Especially for students, this is a very common consideration. Most Canadian banks have a minimum maintaining balance of about $1,000. However, many banks offer great savings and checking accounts with no minimum balance. Before arriving, you could look at the account offerings of banks like Scotiabank, RBC, and TD.
A bank that offers a bank account with $0 maintaining balance would be a safe option for any newcomer.
No Monthly Fees
Canadian banks charge monthly fees along with other transaction-relation fees. However, the biggest banks in Canada waive bank monthly charges for a year. This means that you do will not be charged a monthly fee for a whole year.
Besides, after a year, you will have already become familiar with other Canadian banks. So, by that time, you will also have other banking choices and afford the minor monthly fees!
Online Banking
Despite the importance of a physical location, the option to conduct transactions normally is also useful. To avail yourself of this, try to check whether a bank account under a bank offers an online banking feature.
This will make transactions and banking in a foreign land like Canada much more convenient for you!
The Types of Accounts
In any bank, there are two types of openable accounts: savings accounts and checking accounts.
Savings accounts in Canadian banks often pay higher interest rates. In fact, some offer a 2% interest rate and are tax-free! These types of accounts will also help you save to make big purchases later on in the future. Having this account, you may withdraw money using an ATM or debit card from a machine.
For everyday purposes, you could also opt for a checking account. Although the interest rate is (just slight) lower, a checking account handles many more transactions that you will perform on most days. These include paying bills, ATM transactions, and wire transfers, or sending money to another account. Your employer will most likely require you to open a checking account. This is where your wages will be deposited.
Whichever one you choose, you will find that your money will be in the safe hands of the Canadian banking system- a banking system ranked highly all over the world.
Cards, Chips, or Cheques?
Depending on which of the above accounts you choose to open, the bank will give you the corresponding instrument (or object) of payment.
Whether you open a checking or savings account, the bank will issue you a debit card. This card comes with your identification number or PIN. This allows you to withdraw money from ATMs as well as make cashless payments in restaurants and shops.
Besides your debit card, you will receive personalized cheques. These cheques will bear your name, address, and contact number, and can be used for many transactions. Each cheque comes in certain amount denominations like $50 and $100.
Besides paying for usual items, Canadians often use cheques to pay for other monthly expenditures like rent. In most cases, if you work, your employer will ask you for a voided cheque. Also, as mentioned, a bank transfer to an overseas bank account is possible with a checking account.
You may also apply for a credit card if you wish. Like in your country, the chance of you getting one depends on your credit score or rating. However, so long as you do not have any debts or outstanding payments, having a credit card from your Canadian bank is almost guaranteed!
The Best Banks for Newcomers
Due to their presence across Canada (among other things), these banks are considered the best ones for newcomers.
These banks provide the same offerings and level of protection. Accounts in each are protected by the Canada Deposit Insurance Corporation. The insurance from this corporation guarantees you up to $100,000 if your bank fails for some reason.
So, if you are opening an account, the following banks will surely be more than happy to accommodate you:
- Scotiabank – has a competitive student banking checking account that offers numerous perks and benefits like free teller-assisted transactions
- Toronto Dominion Bank – not only for people within the Toronto area but in many other parts of Canada as well
- Canadian Imperial Bank of Commerce – its checking account offers free unlimited transactions and online banking
- Bank of Montreal (BMO)– branches are present in many other parts of Canada outsideMontreal. This debit card from this big bank also allows you to sync the account to your smartphone. So, you could still pay even without your card!
These banks are, to many, the “big five” as they are commonly chosen by everyone in Canada including immigrants, temporary workers, and international students. But, if you are looking for banks that offer competitive online banking (apart from the banks above), look no further than:
And, recently, the following banks have also become increasingly popular choices:
- HSBC – this bank has an international presence. So, if you have an account with this bank in your country, you could easily transfer your money. This bank also provides newcomers $500 as a welcome bonus for opening an account and making a deposit.
- National Bank – perks keep adding up with every year. Some of the benefits include a wide range of free transactions and financing (e.g. car loans)
What Documents Do You Need?
Opening a bank account in Canada is a very easy process. Like applying for health insurance or getting a driver’s license, it is all about the documents you present.
In most cases, you just need pieces of identification. You could choose two of any of the following possible documents:
Your Visa or Passport
As a safety and security measure, banks will want to verify who you are and the nature of your stay in the country. They could gather these pieces of information from your passport and your visa.
These are important proofs of your identification and immigration status. So, these need to be untampered and in good condition.
Picture Identification
Besides your passport and visa, you may also present proofs of your identity and status with valid picture identification. Some examples would include:
- Canada driver’s license
- Health card (if you have already applied for health insurance in your province)
- School ID (if you are a student)
Proof of Residency
This is especially important for new permanent residents. This could be:
- Any bill sent to your home in Canada with your name and address
- A permanent residency card
- A certificate confirming your permanent residency
That is pretty much it! We did say that the process would be straightforward!
Though 2 is sufficient for most banks, you could bring all documents just to be safe. This will surely make it easier for the bank to give you an account with them!
Conclusion
By now, you are surely more confident to open your own bank account here in Canada.
Doing it here, you will see first-hand why banking here in the Great White North is easy and safe!
