Banking in Canada for Newcomers

 

Table of Contents

  1. What You Need to Know Beforehand
  2. What You Need to Consider When Choosing a Bank
  3. Top 5 Brick and Mortar Banks
  4. Top 2 Online Banks
  5. Credit Unions
  6. How to Open Your Bank Account/What Documents You Need

What You Need to Know About Canadian Banks Beforehand

  • There are approximately 88 banks in Canada. These include domestic banks and foreign subsidiary banks. 
  • Canadian banks are considered some of the safest in the world.
  • Canadian banks are quite technologically advanced, employing technologies like ATMs, online banking, paperless banking, contactless payments, telephone banking, etc.
  • There are three main forms of payments in Canada:
    • Credit card (most popular)
    • Debit card (popular)
      • Debit cards are NOT credit cards. They are connected to your bank account, meaning the money you currently have in your account. They are NOT a form of credit.
    • Cash (moderately popular)
  • Many Canadians also use e-transfer – the transfer of money through online banking. To complete an e-transfer, you have to signup for online banking and the person you’re sending money has to be signed up for online banking too. You do not have to use the same bank as the person you are sending money to. You will need the person’s email address to send money to them.
  • ‘The Big Five’ is a term used to describe the five largest and most influential banks in Canada:
    • RBC (the Royal Bank of Canada)
    • TD Canada Trust (Toronto Dominion Bank)
    • Scotiabank (the Bank of Nova Scotia)
    • BMO (the Bank of Montreal)
    • CIBC (Canadian Imperial Bank of Commerce).
  • Combined, the Big Five banks hold over CAD$100 billion in assets. This is more than 90% of the market share.
  • Aside from the Big Five, Canada also has small banks, online banks and credit unions.
  • It can be beneficial to choose one of the Big Five banks as they have branches in each Canadian province, making it convenient if you need customer support or if you often bank in cash.
  • If can be beneficial to choose a smaller bank, online bank, or credit union as they sometimes offer better deals than the Big Five - think lower monthly fees, lower purchase rates on credit cards, higher interest rates on savings accounts, etc. - as a way to entice customers.
  • Canadian banks are regulated by the government, specifically the Office of the Superintendent of Financial Institutions and the Financial Consumer Agency of Canada.

What You Need to Consider When Choosing a Bank in Canada

Before opening a bank account in Canada, you need to consider several things:

 

Do you need a brick-and-mortar bank in Canada?

If so, make sure to choose a bank that is located near where you are/will be living.

 

What is your main purpose for your Canadian bank account?

Do you want to use it for everyday transactions? Or do you want to use it for growing your savings?

If you’re using it for everyday transactions, you’ll want to pick an account that has unlimited monthly transactions. If you’re using it for savings, you’ll want an account that has a high interest rate, so that you can grow your money faster.

 

How much will you be putting into this Canadian bank account?

Will you be charged a monthly fee after the promotion ends?

Some banks wave the monthly account fee if you invest large amounts in the account, but if you invest a small amount, you might end up paying very high monthly fees once the promotion is done.

 

Will you need a Canadian credit card? If so, how much credit do you need?

Make sure that the credit limit is high enough to fit your needs.

 

How often do you use credit in Canada?

Will you get any rewards from the credit card?

If you use your credit card, often consider a rewards card. Most banks offer them for various rewards (i.e. cashback, travel points, etc.) Depending on how frequently you use your credit card, a rewards card may be a better choice than whichever card is promoted for newcomers.

 

ATM

Do you use ATMs often?

If so, check if there are any fees for using ATMs.

 

Do you need to open the bank account before you arrive in Canada or can you do it after you’ve arrived?

Some banks allow you to open your account before arriving and some don’t. Additionally, if you can open the account before arriving, check how much you can put in the account before you arrive.

 

How often will you be sending money overseas from Canada?

How much will you be sending? Does your chosen bank make sending money easy? Does it limit how much you send? What does it cost to send money?

Each bank has different methods of money transfer and different fees. Make sure that the bank you choose fits your needs.

 

Lastly, consider not only the best deal right now, but also consider what will be the best for you in the long run. Make sure to ask about what the fees will be after the initial promotion period is over.

To help you with your decision we’ve compiled a list of the best banking promotions for newcomers to Canada that are offered at various Canadian banks.

Top 5 Canadian Brick and Mortar Bank Accounts for Immigrants to Canada

As we mentioned above, there are more than just the Big Five banks, however when it comes to the best offers for newcomers to Canada, the Big Five banks can’t be beat.

 

RBC Newcomer Advantage

  • No Limit Banking account
    • No monthly fee for 1 year ($10.95/month regularly)
    • Unlimited transactions in Canada
    • Unlimited e-transfers
    • Free ATM withdrawals from RBC ATM ($2.00/non-RBC ATM)
    • Interest rate 0.00%
    • $100 cash credit*
  • RBC Rewards+ Visa
    • No annual fee
    • Up to 6000 RBC Rewards points with RBC Rewards+ Visa Card (terms and conditions)
    • Purchase rate 19.99%
  • 2 free international money transfers per month (terms and conditions)
  • Free safety deposit box for 2 years ($60/year regularly)
  • Option for mortgage, car loan, business accounts, and more.

 

TD New to Canada Banking Package

  • TD Unlimited Chequing Account
    • No monthly fee for 6 months ($16.95/month regularly with a balance less than $4000)
    • Unlimited transactions
    • Unlimited e-transfers
    • Free ATM withdrawals from any ATM in Canada
    • Interest rate 0.00%
    • $150 cash credit (terms and conditions)
  • If you’re living in India or China, you can open your account 75 days before arriving and can transfer up to CAD$25000
  • Option for mortgage, car loan, international money transfers, and more.

 

Scotiabank Start Right

  • Preferred Package
    • No monthly fee for 1 year ($15.95/month regularly with a balance less than $4000)
    • Unlimited transactions
    • Unlimited e-transfers
    • 1 free ATM withdrawal from a non-Scotiabank ATM per month
    • Interest rate 0.00%
    • Earn Scene points or Scotia Rewards with your debit card
  • $1.99 per transfer with Scotia International Money Transfer
  • Free safety deposit box for 1 year ($55/year regularly)
  • Option for savings account  (earn additional 0.05% on Momentum Savings Account) and GICs (preferred rates)
  • Option for credit card ($139 rebate for first year).

 

BMO Newstart Program

  • Performance Plan
    • No monthly fee for 1 year ($15.95/month regularly with a balance less than $4000)
    • Unlimited transactions
    • Unlimited e-transfers
    • 1 free ATM withdrawal from a non-Scotiabank ATM per month ($2.00/non-BMO ATM in Canada, $5.00/non-BMO ATM outside of Canada)
    • Interest rate 0.00%
    • $300 cash credit (terms and conditions)
  • BMO Cashback Mastercard
    • Up to 5% cashback for the first 3 months
    • Purchase rate 19.99%
  • Free safety deposit box for 1 year ($55/year regularly)
  • If you’re living China, you can open your account before arriving
  • Option for GICs (earn an additional 0.25% interest on select GICs)
  • Option for mortgage, car loan, international money transfers, and more.

 

CIBC Welcome to Canada Banking Package

  • CIBC Smart Account for Newcomers
    • No monthly fee for 1 year ($4.95-$14.95 regularly with a balance less than $3000 - The number of monthly transactions determines the monthly fee. 12 or less monthly transactions = $4.95, each additional transaction = $1.25, capped at $14.95)
    • Unlimited e-transfers
    • Interest rate 0.00%
  • CIBC Dividend Platinum® Visa Card
  • Option for mortgage, car loan, international money transfers, and more.

 

Other Canadian Brick and Mortar Banks

If none of the above account fit your needs there are other options, however, due to unfavorable terms and conditions, we do not recommend these as ‘the best’ banking options for newcomers to Canada.

  • National Bank Offer for Newcomers to Canada
    • Pros:
      • No monthly fee for 3 years ($14.95 regularly)*
      • Unlimited e-transfers
      • Option for mortgage, car loan, international money transfers, and more
    • Cons:
      • The contract is 3 years in length
      • After the first year, you must sign up for a personal credit card, online bank statements, and electronic pay deposit or online payment of 2 bills per month. If you do not sigh up for these, you will begin paying monthly fees on your account.

 

  • HSBC Canada Newcomers Program
    • Pros:
      • Can open your account before arriving in Canada
      • Up to $1000 cash credit
      • No monthly banking fee for 12 months
    • Cons
      • For Premier Welcome Offer you must deposit a minimum of $25000 within 30 days of account opening and maintain that amount for 3 months
      • For Advance Welcome Offer you must deposit a minimum of $5000 within 30 days of account opening and maintain that amount for 3 months.

Top 2 Canadian Online Banks

 

Tangerine:

  • No Fee Daily Chequing
  • Option for no annual fee credit card
    • Interest rate 19.95%
    • Option for travel rewards and insurance OR cashback
  • Option for mortgages, loans, investments, etc.
  • Track and categorize your spending habits
  • Deposit cheques online.

TIP: Tangerine often runs promotions for new customers; check their website for more details.

 

Simplii:

  • No Fee Chequing Account
    • No monthly fees
    • Unlimited transactions
    • Unlimited e-transfers
    • Free ATM withdrawals from all CIBC ATMs in Canada (additional fees for non-CIBC ATMs)
    • Interest rate 0.05%
  • Options for high interest savings account
  • Includes RRSP or Tax-Free Savings Account
  • No monthly fees
  • No transaction fees
  • Interest rate 0.10%
  • Option for mortgages, loans, investments, international money transfers, etc.

TIP: Simplii often runs promotions for new customers; check their website for more details.

 

Other Canadian Online Banks

If none of the above accounts fit your needs there are other options.

  • Manulife
    • Pros:
      • Offers combined savings and chequing account
      • Offers high interest
      • Option for credit cards, mortgage, loans, investments, and more
    • Cons:
      • Does not offer special rates or packages for newcomers to Canada.

PC Financial

  • PC Financial
    • Pros
      • No monthly fees
      • Unlimited transactions
      • Unlimited e-transfers
      • Earn bonus PC Optimum points that can be redeemed at any PC subsidiary (Superstore (groceries), Shoppers Drug Mart (pharmacy), PC Travel (travel), etc.)
    • Cons
      • Does not offer special rates or packages for newcomers to Canada
      • No option for mortgages, loans, investments, etc., meaning that you would, most likely, need a second bank account
      • No interest on account/ no opportunity for financial growth.

Canadian Credit Unions:

Credit unions are a less well-known banking option, but they are somewhat popular in Canada.

A credit union is different from a bank – they’re based on a member/owner system, meaning that each person wo opens an account at a credit union is investing in the credit union and thus owns a share of it and will receive the return of that share.

Credit unions offer most of the same services that banks do (i.e. chequing and savings accounts, credit cards, investment, loans & mortgages, ATMs, online banking, etc.).

Credit unions tend to offer higher interest rates on savings and lower interest rates on loans, as well as lower fees. For this reason, they are a good option.

Unfortunately, some credit unions are exclusive, meaning that you must have a connection to the union or an existing member before you can open an account there. This is most common with smaller, local credit unions.

Luckily, there are some credit unions that are quite big and inclusive. Credit unions differ based on province. For a full list of the largest Canadian credit unions, click here. For more information on credit unions, click here.

How to Open Your Canadian Bank Account: What Documents You Need

Before opening your bank account, check what documents that bank requires to open your chosen account. These documents may include:

  • Permanent Resident Card
  • Confirmation of permanent residence (e.g., IMM Form 5292)
  • Temporary Permit (e.g., IMM Form 1442, 1208, 1102)
  • Valid passport
  • Canadian driver’s licence
  • Other Government of Canada photo ID.

Once you have collected these documents, you can contact your chosen bank and begin the process of opening an account with them. For some banks, you may have to make an appointment and visit a branch. For online banks, or if you are opening the account from overseas, you will have to scan your documentation and apply online.

Make sure to ask any and all questions you have before agreeing to/signing anything. If something makes you feel unsure or uncomfortable, you can always ask for more clarification, ask to speak to another representative, or leave and take some time to do your own research before committing.

 

Tips for Opening a Canadian Bank Account:

  • If you need language assistance, reach out to your chosen bank and let them know. Most banks in Canada are very accommodating.
  • Almost every Canadian bank offers online banking. If you are comfortable using this service, it can be very useful and convenient.
  • If you rely on ATMs a lot, make sure to check the location of ATMs that are near you, before signing with a bank.
  • Many of these banks offer special mortgage rates and vehicle loans for newcomers – ask your bank representative for more details.
  • If you are going to have income directed into your account, make sure to get all necessary paperwork from the bank (i.e. a void cheque).
  • There is no limit on how many banks you have accounts with. If you find more than one bank that you like, you can open accounts at both, or try one and if you don’t like it switch to another.
  • If you are unsure which bank is best for you, you can always book an appointment with a bank representative and ask them any additional questions you might have or share your concerns. Don’t agree to anything on that day; just get a feel for that bank. Do they listen to you? Do they answer all your questions? Do you feel pressured when talking with them? This will help you make a decision you’re comfortable with. Remember you can book appointments with as many banks as you’d like, even virtual banks.

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