Banks offer extensive information on how newcomers to Canada can get started in their new country, including checklists, information, financial services and advice. Here is some basic information to get you started. A list of bank resources at the end of this article may also help with the financial transition to Canada.
Features of the Canadian Banking System
5 features of banking in Canada for newcomers
Many banks offer no fee accounts for people new to Canada so shop around for the package that best meets your needs.
The Financial Consumer Agency of Canada offers an Account Selector Tool on their website at https://itools-ioutils.fcac-acfc.gc.ca/ACT-OCC/SearchFilter-eng.aspx
Access to an Account
Anyone can open a bank account in Canada if they meet the identification requirements set out in the Bank Act.
Did you know?
You can open an account even if you don't have a job or money to deposit, or if you've been bankrupt.
Identification requirements are on the CBA website at cba.ca/opening-a-bank-account.
Deposits are secure
In the unlikely event of a bank failure, your deposits in your Canadian dollar and foreign currency savings and chequing accounts as well as term deposits are protected.
The institution must be a member of the Canada Deposit Insurance Corporation (CDIC) and all Canadian banks that take retail deposits are members.
Interest rates for different products are set by each bank. The decision on how much interest to charge on a loan depends on how risky the loan is and the prices that banks and other lenders pay to raise funds in the broader marketplace. Canada has a very competitive banking industry, so shop around.
Banks in Canada offer a variety of savings accounts, including registered accounts created by the Government of Canada to encourage tax-sheltered savings, for example:
- Registered Retirement Savings Plans (RRSPs),
- Tax-Free Savings Accounts (TFSAs),
- Registered Education Savings Plans (RESPs), and
- Registered Disability Savings Plans (RDSPs).
Learn more about these savings accounts in the Banking Basics section of the cba.ca website.
Access to an Account
Anyone can open a bank account in Canada if they meet the identification requirements set out in the Bank Act. You can open an account even if you don’t have a job or money to deposit, or if you’ve been bankrupt.
Fees for banking products and services can vary. There are low-fee and no-fee accounts available and higher fees may be charged on accounts that offer additional services. It’s important to understand what services you need and then to shop around for the account that best meets those needs.
It’s easy to compare the banking packages available using the online interactive Account Selector Tool available from The Financial Consumer Agency of Canada (FCAC).
Bank Deposits are Secure
Canadian banks are well-managed, well-capitalized and regulated and have been recognized worldwide for their soundness and stability. In the unlikely instance of a bank failure in Canada, your deposits in your Canadian dollar and foreign currency savings and chequing accounts as well as term deposits (up to $100,000 per type of account per bank) are protected. The institution must be a member of the Canada Deposit Insurance Corporation (CDIC), and it’s important to note that all Canadian banks that take retail deposits are members of CDIC.
Interest rates for different products are set by each bank. The decision on how much interest to charge on a loan depends on how risky the loan is and the prices that banks and other lenders pay to raise funds in the broader marketplace. Once again, Canada has a very competitive banking industry, so shop around.
Banks also offer different types of savings accounts to help you save your money. The Government of Canada has also created a number of special registered savings accounts to encourage tax-sheltered savings. These registered accounts are all available from banks in Canada and include:
A National System of Banking
Canada has a national system of banking where many retail banks have branches throughout the country. The benefits of this national system mean that you have access to similar products at the same price regardless of where you live in Canada.
Consumers benefit from the high degree of competition and choice in the Canadian financial services marketplace. Today there are 80 domestic and foreign banks currently operating in Canada and, of those, more than 40 offer financial products and services to consumers – including bank accounts, credit cards, loans and investments.
Canadians also have access to a national network of 5,783 branches, 18,515 bank-owned ABMs, debit and Tap& Pay payment services at more than 500,000 retailers in Canada as well as online, mobile app and phone banking.
Opening a Bank Account
You can open a bank account in Canada if you meet the requirements that are set out in the Bank Act. You can open a bank account even if:
- you don’t have a job,
- you don’t have money to put in the account right away,
- you have been bankrupt, or
- you have no credit history.
Generally, you will need two documents from a reliable source to open a retail deposit banking account–one of which has your name and address and another that has your name and birthdate. A list of the types of documents you may use is available on the Canadian Bankers Association website at https://cba.ca/opening-a-bank-account.
It’s also possible to present only one document that indicates your name and date of birth if your identity is also confirmed by a customer in good standing with the bank or by an individual of good standing in the community where the point of service or branch is located.
You may also be able to open a bank account with proper identification if you are not a Canadian citizen. More information is on the Financial Consumer Agency of Canada website.
Choosing an Account
Getting started with a bank account is easy and there is a lot of choice: there are over 100 consumer bank account packages alone to choose from. You can also compare accounts easily using a simple, free, online tool from the Financial Consumer Agency of Canada.
Sending Money to Family and Friends Abroad
Some newcomers to Canada regularly send money to family and friends in other countries. Banks in Canada can make these transfers, called remittances, to family members or friends abroad in a number of different currencies. Typically the person you are sending money to will need to have a bank account but they may also be able to pick up the money at a bank branch without an account if they present the proper identification. Banks charge a fee for remittance payments and the fees are clearly disclosed on bank websites and in branches. You can find links to the websites of CBA member banks here.
If you are sending money to someone in another country that does not have a bank account, there are money transfer services such as Western Union and MoneyGram that can do that for you. These companies can transfer money to thousands of agents around the world that are often located in shops and other retail outlets.
Starting a Business
Many new Canadians want to start their own businesses and look to banks for financial advice, services and products. Most bank business customers are small businesses and banks work hard to meet the needs of this large and diverse group.
Banks offer financing, information, advice and many other services to help people start and manage their businesses, including educational and planning resources such as seminars and workshops, credit cards for small business, lines of credit, overdraft protection, telephone banking, online banking, venture loans, and payroll and cash management services.
To learn more, go to the Small Businesses section.
Bank resources to help with the financial transition to Canada:
BMO NewStart Program — For those planning to come to Canada soon, or who have recently arrived in Canada, this page helps ensure the financial transition goes smoothly.
CIBC New to Canada — Information on living, working and studying in Canada, as well as getting identification.
HSBC New to Canada — A checklist for newcomers, advice on getting started in Canada, a Canadian immigration and banking glossary, and information on accounts for newcomers.
ICICI — Information about a Hello Canada account.
National Bank of Canada Newcomers to Canada – Information about working, studying and starting a business in Canada along with a checklist.
RBC Newcomers to Canada — Information about life in Canada, buying a home, employment and financial services that are tailored to newcomers’ needs.
Scotiabank Startright Program for New Canadians — Information on banking in Canada, building a credit history and a guide to a new country.
TD Bank Financial New to Canada — A summary of TD Canada Trust initiatives to help newcomers better understand banking in Canada.