Banking for Newcomers to Canada
Opening a bank account is necessary for successful settlement in Canada. This is because a bank account allows you to receive your income, as well as carry out financial transactions such as paying your bills and transferring money. Explore more about Canada’s banking system below.
Table of Contents
- Overview
- Can I open a bank account before I arrive in Canada?
- Which bank is best for newcomers in Canada?
- How can a new immigrant open a bank account in Canada?
- What service languages do Canadian banks offer?
- Are there special banking packages available for newcomers in Canada?
- What are the main bank accounts?
- Can I open a USD account in a Canadian bank?
- Do Canadian bank accounts charge fees?
- What services do Canadian banks offer?
- How safe is the Canadian banking system?
- Glossary of key Canadian banking terms
- Contact CanadaVisa and Cohen Immigration Law for Assistance
Overview
All Canadians need a bank account to store, grow and handle their money. In this guide, CanadaVisa will outline key information about many topics to do with banking in Canada.
First, this page will provide pre-arrival information related to sending or bringing your money to Canada as well as opening a bank account before coming to this country.
Secondly, an overview of the documents required to open a bank account will be given. This will be followed by information about choosing the right bank for you and more about opening a bank account.
Following that discussion, this page will review the service languages offered by banks in Canada as well as the newcomer-specific banking packages that are available at these financial institutions.
Account types, fees and services will be discussed in the next section of this page.
Finally, this page will conclude with a discussion on the safety of the Canadian banking system, including deposit insurance, on-site lockers and safety deposit boxes made available at banks.
Can I open a bank account before I arrive in Canada?
Yes, but there is also another way to bring money into Canada prior to arrival in this country.
Newcomers to Canada may send money into this country through trusted friends/family prior to their arrival. This is a particularly good option for those who do not want to physically bring the funds with them from their home country.
Newcomers choosing to carry cash into Canada with them will need to declare any amount exceeding $10,000 with the Canada Border Services Agency (CBSA) upon arrival.
For example, many international wire transfer services exist in Canada, which allow newcomers to electronically move money using the recipient’s details (name, bank account number, transferred amount etc.).
Many banks in this country also offer newcomers the opportunity to open a bank account before arriving in Canada, which can be initiated with a simple application form available on the institution’s website. It is important to note that each bank is likely to have its own restrictions and limits pertaining to this process such as the countries from which an account can be opened or the amount of money that can be stored in the account prior to arrival in Canada.
Which bank is best for newcomers in Canada?
The answer to this question is that the best bank for you as a newcomer to Canada depends on your most important priorities as an account holder.
Canada has a variety of banks with offices and branches in most Canadian cities, as well as regional banks, credit unions, and international banks. Most Canadian banks offer similar quality services such as online banking and automatic banking machines (read more in the section of this page titled “What Services do Canadian Banks Offer?”). Additionally, many of the major banks offer programs for newcomers with specific newcomer incentives (more on that later as well).
Therefore, it is likely that other factors will determine what bank you choose to open an account with.
For instance, the distance from your home to a bank’s branch, the service languages offered, and/or the availability of a locker/safety deposit box may contribute to this decision. Additionally, the fit between someone’s ability to visit a bank (outside of working hours) and the bank’s own hours of operation is typically an important consideration when selecting a financial institution to bank with.
How can a new immigrant open a bank account in Canada?
Opening a basic (non-interest-earning) bank account in Canada can be done in three ways. Each method requires newcomers to present the bank with different pieces of identification (see the bulleted list below). All identification presented to a bank must be original documents (not photocopies).
Only interest-earning accounts require prospective account holders to present their Social Insurance Number (SIN) at the bank.
Newcomers to Canada can open a bank account with a variety of combinations of documentation.
The following list provides an example of documentation you may be able to provide to open your Canadian bank account. Please note each bank has its own requirements so you will need to check with them to confirm which documents they accept.
Example documentation you may be able to provide (depending on your bank):
- Two pieces of identification from List A
- One document from List A and one from List B
- One document from List A (only if someone in good standing with the financial institution or someone in the community can also confirm your identity)
List A | List B |
Valid Canadian driver's license (as permitted by provincial law) | Employee ID card with your picture on it that has been issued by an employer well-known in your area |
Current Canadian passport | A debit card or bank card with your name and signature on it |
Birth certificate issued in Canada | Canadian credit card with your name and signature on it |
Social Insurance Number (SIN) card issued by the Government of Canada | Client card from the Canadian National Institute for the Blind with your picture and signature on it |
Old Age Security card issued by the Government of Canada | Current foreign passport |
Certificate of Indian Status | |
Provincial or territorial health insurance card that can be used as ID under provincial or territorial law | |
Certificate of Canadian Citizenship or Certification of Naturalization | |
Permanent Resident card or an Immigration, Refugees and Citizenship Canada (IRCC) form IMM 1000, IMM 1442, or IMM 5292 | |
A document or card with your picture and signature on it issued by select authorities |
Certain banks will have added criteria for opening an account, but the above presents the basic requirements of most Canadian financial institutions.
It is possible that newcomers to Canada would feel more comfortable visiting a bank in person to open their account(s), but this can also be done online.
To open an account, go to the bank of your choice in person and provide documents that prove who you are (see ‘How can a new immigrant open a bank account in Canada?’ above). Otherwise, go to the bank’s website and initiate the process through an online application form.
In Canada, you have the right to open a personal bank account even if:
- You do not have a job
- You do not have money to put in the account right away
- You have a poor credit rating
- You have been bankrupt before
Are there special banking packages available for newcomers in Canada?
Nearly all major Canadian banks offer specific banking packages for newcomers to this country. Designed to specifically give newcomers flexibility and security as they begin a new life in Canada, many of these special newcomer offers include perks like: a year of banking with no account fees, high credit card limits, and special interest rates that help ease a newcomer’s transition into this country.
The details of each Canadian bank’s newcomer offers will vary and can be found at their respective websites, or at most of a bank’s branches across Canada.
What service languages do Canadian banks offer?
Canadian banks often hire advisors and staff that speak and offer services in a variety of languages. When calling, visiting or going online to book an appointment at the bank – whether to open an account or to handle another matter – many of Canada’s financial institutions allow users to choose from a list of available service languages to suit their needs.
What are the main bank accounts?
There are two primary account types available at Canadian banks: chequing accounts and savings/investment accounts.
Chequing accounts enable users to write cheques and use of a debit card (more on debit cards later). A chequing account is necessary if your employer uses payroll deposit, as that is where you will receive your salary. Most banks charge a fee to users that maintain and operate a chequing account, although the cost of an account varies based on the number of transactions each period.
Savings and investment accounts, on the other hand, help users save and grow their money. Banks typically provide higher interest rates in these accounts compared to checking accounts, allowing users to more efficiently grow their money.
Registered savings accounts from the Government of Canada are commonly facilitated through this country’s banks. These accounts encourage tax-sheltered savings through Registered Retirement Savings Plans (RRSPs), Registered Education Savings Plans (RESPs), Registered Disability Savings Plans (RDSPs), and Tax-Free Savings Accounts (TFSAs).
When savings are tax-sheltered, it means that the account holder will either have to pay less or no taxes on any money withdrawn from these savings or they will have their taxes deferred to a later date, meaning that they do not need to immediately pay taxes on money they take out.
Can I open a USD account in a Canadian bank?
Most Canadian banks will allow clients in this country to open accounts that hold and manage the United States Dollar (USD). Just like with standard Canadian bank accounts, these USD accounts come with eligibility criteria and conditions that clients must meet in order to maintain them.
Do Canadian bank accounts charge fees?
Banks typically do not charge account-opening fees. However, there is usually a monthly fee associated with maintaining an account at a bank, which will vary based largely on the account type. For instance, accounts with higher interest rates (savings accounts) and better perks are likely to be attached to higher monthly fees for the client.
The same is true for credit cards, for which fees (typically annual, rather than monthly) also depend on the benefits provided by the card. There are also no-fee credit cards available, which are typically the preferred choice of newcomers who would like to establish themselves financially while minimising costs.
In the case of a new bank account, it is common that newcomers to Canada will be able to waive the account fees for up to one full year
What services do Canadian banks offer?
An important consideration for newcomers to Canada is which financial products each bank offers that match the individual’s banking preferences. Many of Canada’s banks offer similar services, the most common of which will be outlined below.
Automated Teller Machines (ATMs)
Automated Teller Machines are simple and convenient self-service machines that allow users to deposit and withdraw money, transfer funds between accounts and print account statements using a debit or credit card. ATMs are either bank-owned or privately owned, and the specific functions available differ depending on the machine and its owner. It is free to bank with an ATM owned by your financial institution, but charges will apply for using ATMs from other banks. Using privately-owned ATMs, commonly found in restaurants, bars, malls, and other public places, will result in transaction fees taken by both the machine and your bank, which can be very costly.
Cheques
Cheques are bank-issued paper notes that are often used to pay bills by mail, pay larger amounts such as rent, or pay for things where credit cards or direct payments are not accepted. When paying with a cheque, the writer must have enough money in their account to pay the full amount specified on the cheque or it will be returned to the writer for non-sufficient funds (NSF) and their bank will charge them a fee.
Debit Cards
Debit cards are typically used as an alternative to cash, allowing the cardholder to pay for an item and have the money taken directly from their checking account. In Canada, debit cards can be used as an alternate form of payment almost everywhere, typically without any additional fees.
Credit Cards
Credit cards enable cardholders to spend money on credit and be billed for it within a month. Getting credit means borrowing money to buy something now and paying it back later with interest. Interest rates can be high and credit rating is very important in Canada, so it is important to be cautious when using credit. If you make a payment for the full amount you spent by the specified due date, you will not be charged any interest fee.
Canadian newcomers can receive credit cards just like Canadian citizens, although they will need to present the bank with one of several pieces of documentation in order to be eligible: their Permanent Resident card, their confirmation of permanent residence (e.g., IMM Form 5292) and/or their Temporary Resident permit (e.g., IMM Form 1442, 1208, 1102).
It is recommended you start with no annual fee credit cards. It is also possible to sign up for credit card reward schemes, whereby you earn points for each purchase made with the credit card. These points can later be cashed in for products and services.
Bank Loans
Canadian banks offer a variety of loans, including personal loans and those for business. Before signing a loan agreement, it is important to ensure you understand your duties in terms of the payment schedule, late or missed payments, co-borrowing, and interest rates.
Two types of loans are personal and car loans.
Personal bank loans are extremely useful with helping to manage significant payments such as post-secondary education and home renovations. In this case, the borrower receives a fixed dollar amount and agrees to repay the full amount plus interest over a fixed period of time.
Banks also use loans to help clients finance their first car. What separates one bank from another is typically the interest rate offered on the loan and the repayment schedule, making it vital that people looking for any kind of loan do research to find the most flexible and beneficial loan for their needs.
Your lender may offer you a loan for more than what you need. Be careful not to borrow more than you can pay back.
Mortgages
Like car and personal loans, mortgages are provided by banks based on certain eligibility criteria. The mortgage rate offered will depend on factors such as whether the mortgage-seeker is buying or refinancing a home, whether or not they have already signed an offer to purchase, the purchase price of the property and the value of the down payment on the home/apartment etc.
Remittance Services
Remittance services allow Canadian newcomers to wire transfer money from their Canadian bank account either to their bank account back home or transfer money to their loved ones. Each bank in Canada will likely have a different transfer fee associated with their remittance services.
Online Banking
Most Canadian banks have an online banking feature. Online banking allows account holders to access their money and perform transactions that are securely managed by the financial institution, giving them the opportunity to pay their bills, send or receive money and much more via a portal on the bank’s website.
Other actions made possible through online banking include the following: viewing credit card statements, reviewing credit and debit transaction history, applying for loans, opening new accounts etc.
While most traditional banks offer online banking in addition to their regular in-person services, Canada also has exclusively online banks for those whose lifestyle fits that type of service.
Phone Banking
For consumers who need help from their bank but may not be able to visit a physical branch in time, many Canadian banks offer services that enable account holders to address their concerns and needs with bank representatives over the phone.
Whether an account holder needs help with a suspicious transaction or simply has a question about their account, many of a user’s banking needs can be met via phone banking services. In addition to questions and concerns, many phone banking services allow Canadians to perform actions such as bill payments and opening a new account over the phone as well.
How safe is the Canadian banking system?
Canadian banks have a long history of being safe and secure institutions that are well-managed, well-capitalised, and well-regulated.
Part of this security is established through Canada’s independent federal banking regulatory agency — the Office of the Superintendent of Financial Institutions (OFSI). Established in 1987, OSFI supervises and regulates federally registered banks and insurers, as well as trust and loan companies, to increase safety and public confidence in the Canadian banking system.
Banks offer further security through well-protected lockers and safety deposit boxes, which allow Canadians to safeguard valuable items behind vaulted doors inside a bank. Typically attainable by paying a monthly fee, the accessibility of lockers and safety deposit boxes is usually subject to their availability at a bank’s branch. Access to lockers and safety deposit boxes is also occasionally included in some banking packages when you become a client.
In the highly unlikely event of a bank failure in Canada, banks in this country are also well-suited to protect the deposits in your savings and chequing accounts of their clients. This is thanks to the Canada Deposit Insurance Corporation (CDIC). The CDIC is a Crown Corporation that was created in 1967 to provide deposit insurance and stability to the country's financial system.
Money held in banks that are a member of the CDIC is protected up to $100,000 CAD.
Glossary of key Canadian banking terms
An account is a fund that a customer has entrusted to a bank and from which the customer can make withdrawals.
A bounced cheque is a cheque that returns to the issuer due to insufficient funds in the issuer's account.
A cheque is a written order directing a bank to pay money to a specified recipient.
A correspondent bank is a bank that preforms services for another bank which has no branch or physical presence in the relevant centre or jurisdiction. Some services correspondent banks offer include cheque clearing, cash management, transfer of funds, etc.
A credit history is a record of a borrower's debt payment that indicate the creditworthiness of the borrower (how dependable a borrower is to pay back an amount(s) of credit). The credit history helps lenders in determining the borrower's ability to repay debts in a timely manner.
An ETF is a transfer of funds by electronic means rather than paper-based methods. These include using computer systems, ATM, telephone, wire transfers, etc. The funds are transferred faster and more securely.
An interest rate is an additional percentage that a lender will add onto an initial (or principle) loan. The borrower will need to pay the lender both the entire principle loan, plus the monetary amount equivalent to what the interest rate percentage is (as part of the principle).
For example a $100 CAD loan at 5% interest rate means that the borrower would have to pay $105 CAD to fully payback the loan. Interest rates can also vary based on the term of the loan (how long the borrower has to pay the lender back).
An LOC is an agreement negotiated between a borrower and a lender establishing the maximum amount of money against which a borrower may draw. The agreement also sets out other conditions, for example, how and when the money is to be repaid.
Liquid assets are assets that can easily be converted into cash in a short amount of time.
These include assets like cash itself, demand deposits with a bank or financial institution, short-term deposits and readily marketable investments including publicly traded stocks or bonds.
A minimum opening deposit is the minimum amount of money needed to open and maintain an account. Accounts that fall below the minimum balance may be subject to service charges.
A non-resident account is an account owned by a person from outside the country in which the bank is chartered.
A PIN is a numeric identification code of usually four digits, which users create to access their account. A PIN is required for use of a debit or credit card at ATM machines, to verify the identity of the cardholder and to authorise account transactions.
A savings account is a deposit account which accrues an interest, simply for having money in the account. These accounts may feature limited functionality otherwise (such as restricted transactions, lack of cheque and linked debit card facilities, etc.), however the ability to accrue interest on savings makes them desirable.
A service charge is a fee established by financial institutions for maintaining a particular service; for example: annual charges for a checking account, late payments of loans, returned cheque charges, and so on.
A stop payment is an order (by the writer of a cheque to the bank) to not honour the payment. The stop payment order has to be given before the cheque has been cashed, and can be done by telephone or in writing.
A term deposit is a secure investment generally offering a higher rate of interest than a simple savings account. These investments are available in a number of currencies, a variety of term lengths, and several redemption options.
An electronic transfer of funds from one entity to another, across a network administered by hundreds of banks around the world to complete the transaction.
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