The most complicated part of the process is finalizing your immigration papers. Once you have the most time-consuming task out of the way, you can begin to sort the other important things that you need to do in a manner that is organized. You will want to focus on one task at a time. Moving to the next on the list is figuring out how to open a bank account in Canada. Luckily, the process of opening a Canadian bank account is very simple. Don’t over complicate your move. Cross it off your checklist as you do it. It’s one less thing to worry about. Here’s what you need to do to set up your finances.
- 1 Set up Your Bank Account Right Away
- 2 Learning to Choose the Right Account for You
- 3 Different Kinds of Banking Accounts in Canada
- 4 Type 1, Checking Account
- 5 The 2nd Kind of Typical Account, the Savings Account
- 6 The Third Type, U.S. Dollar Account
- 7 Required Documentation to open up a Bank Account in Canda
- 8 Opening International Bank Accounts
- 9 Canada’s Top Five Banks
- 10 What Are The Charges And Costs?
- 11 Transaction and ATM Fees
- 12 What are International Transfer Fees?
Set up Your Bank Account Right Away
Arriving in your new homeland of Canada is exciting, and you may get off course and want to begin sightseeing and making new friends. There is plenty of time for that! Right now stay on track. You have things that need to get done so that you can begin enjoying your new life. When you arrive in Canada, you’ll need to learn how to open a bank account in Canada. This is very easy to do and crucial to keeping your money in a safe and secure location. You also get the added benefit of 24 hours a day access to your funds. There are many newcomer packages as well that will be explained in greater detail further on.
Learning to Choose the Right Account for You
We all know how crucial it is to have the right bank account that fits your individual needs. There are so many banks and types of accounts available to you that the choices can become an added stressor to your already stressful location change. When you are first settling into your new place, look into getting financial guidance from an RBC® advisor. Let them help you choose a bank account. Canada has great advisors like this who care about getting you the very best rates. You will want to look at some factors when making this important decision.
- Look at all the features available on each account that is available to you. What may be great for a friend of yours may not benefit you at all.
- The interest rates for your savings and checking accounts as well as any other accounts you are considering opening.
- How many transactions do you do a month? Is there monthly fees when you go over a certain limit?
- How often do you use out of network ATM’s?
Different Kinds of Banking Accounts in Canada
You have plenty of choices when it comes to deciding on a bank account that meets your daily needs, spending habits, and income. You will want an account that can provide you with the services that you use the most on a daily basis. There are three popular types of accounts when you open a Canadian bank account.
Type 1, Checking Account
When you need to do your everyday banking, your best option is to consider opening a checking account. These are accounts that you deposit your paycheck, birthday cash and other various payments into. It allows both withdrawals and deposits and frequently is used to pay monthly auto payment bills. Some banks charge a monthly fee to have one as most don’t typically pay an interest rate as the flow of income is continuously changing. It is not unheard of however to find a bank once in awhile that will offer you a very small introductory interest rate to get you in the door as a customer. Checking accounts are frequently linked to services like PayPal which can draw funds directly from your bank account immediately. They can be overdrawn though and when it happens, expect to incur hefty charges. You can get coverage protection at many banks for those situations where you made an accounting error and overdrew.
The 2nd Kind of Typical Account, the Savings Account
This type of account is widely known as many of us as children had one to teach us the value of collecting up your money. This is known as the savings bank account. Canada has them all over for you to put your money into.These accounts are important for meeting your long-term goals such as buying a car, going on a vacation or buying a house. It is the money that you don’t need to use for your day to day living expenses. What makes this different than a checking account is that that money is not as fluid. This allows for a higher interest rates for savings accounts. You get paid monthly on a general basis for this type of account. Some calculate your interest rate based on a daily basis. Other options available to you may be high-interest rate savings accounts that are available in both Canadian and US currency.
The Third Type, U.S. Dollar Account
When living in Canada, you are very close to the United States. At times the currency may be used interchangeably. Depending on what part of the country you live in, it may be beneficial to keep a US dollars account. This will save you time looking for currency exchange services. This account is also quite useful if you often travel to the U.S.A. or other countries where U.S. currency is used.
Required Documentation to open up a Bank Account in Canda
For citizens of other countries residing in Canada, you will need a bit of paperwork to open a Canadian bank account.
- A legal and unexpired passport
- A permanent residency card of Canada or your papers you signed when you immigrated.
This is not a guarantee of all the paperwork that you may need. Most banks have different rules and regulations determining what they require for documentation to open up a bank account. What one bank may require from you, another will not. Always check online or call ahead before you head down to the branch office, to see if any more paperwork is required.
Opening International Bank Accounts
If you have a bank account in your home country that is international, they will happily show you how to open a bank account in Canada. These tend to be expensive to open up and are catered to a higher net worth clientele. You will be required to have a large amount of money that is sitting in the bank at all times. It may not be the best fit for you.
Canada’s Top Five Banks
Canada has five major banks:
The great thing is that all of these special deals for new account openers. They want you to open a bank account. Canada loves newcomers to the country. These banks are
- Royal Bank of Canada
- Toronto-Dominion Bank
- Bank of Montreal
- Canadian Imperial Bank of Commerce
Features of Royal Bank Of Canada (RBC)
Known as Canada’s largest network of banks, they offer unique packages to newcomers coming into Canada. They understand that the international market is where they can draw their clientele from. They provide their customer service in 200 languages. So wherever you came from, you will have a friendly and familiar voice on the other line. If you don’t have your permanent visa yet, you can still open up an RBC Signature No Limit Banking Account and get a no interest rate credit card. Once your permanent residency goes through, you qualify for a car loan and mortgage even if you don’t have credit history in Canada. Website
Toronto-Dominion Bank (TD Bank)
This bank has fabulous features for new business owners such as a limited number of fee-free transactions and overdraft protection. For those new to Canada there is a package that has a checking account with no fees for six months and a free credit card with $1000 limit. Qualifying for a mortgage is a possibility even if you have no credit history. Website
This bank is known as the third largest Canada. They have over 4000 ATMs in different locations around the country. This makes them a very convenient bank to use. They have some rewards programs that include free movies that are redeemed from points accrued. For the business owner, they help you tailor a customized business plan and overdraft protection of up to CAD$ 5000. They also give company owners a VISA card.
Bank of Montreal
The Bank of Montreal has some great banking deals for new customers and residents of Canada. It is the oldest bank in the nation. They offer new residents unlimited transactions and no monthly fees on checking accounts for the first year. They also give you a free Mastercard and a free safety deposit box for the first 365 days. It is also easy to qualify for a mortgage even with no credit history. There is also business deals available depending on how large your business is.
Canadian Imperial Bank of Commerce (CIBC)
This bank also offers the Newcomers to Canada plans. Both temporary and permanent residents are included. You can get a check in account with no monthly fee and unlimited transactions for the first year. You also get a Visa debit card.For permanent residence, there is a cash back deposit on a safety deposit box. New businesses also get great rates. They get unlimited transactions and access to a line of credit at preferential rates. Website
What Are The Charges And Costs?
Just like in most places in the world, you can expect most fees and charges to vary greatly depending on the bank. There is no set rate for banks They can charge whatever they decide for monthly fees on checking accounts, but as you can see, they really want your business. Always look over your bank’s terms and condition carefully, so you are not shocked at any charges.
- Students and people over 60 get discounts on banking. It is also free to newcomers to Canada for a period of time.
- One big time. Expired, your monthly fee may be up CAD $30 a month for a checking account.
- Most banks waive this if you have CAD $3,500 in your account.
Transaction and ATM Fees
You get a posted number of free transactions per month on most checking accounts. After you go over the limit, you begin to incur charges per transaction. It is generally about CAD $1 per purchase. Some account may have unlimited transactions, but the monthly fee, and minimum deposit requirement may be higher. ATM Fees are tacked on when you bank outside of your network. They are generally around CAD$1.50 per withdrawal. If you are traveling abroad, you can expect withdrawal from an ATM to cost you about CAD$5. There is also a 2.5% commission on top of that.
What are International Transfer Fees?
When you transfer money internationally, you may be charged a fee. Newcomers get a break on this and get a limited number of free international transfers. You pay the fee and then it is refunded to you at a later date. Always read all terms and condition and the FinePrint to make sure you understand completely what you are paying for.