Opening a Bank Account in Canada
When you’re moving from one home to another it can be an incredibly stressful experience, so when you move from one country to another that experience is even more amplified. Whether you’re in your home country and looking to move to Canada, or you’ve just recently made the move there’s a lot to consider when it comes to move, one of the most critical being opening a bank account. Having a bank account is an important part of your day to day life, and necessary for a variety of reasons. If you’re new to the country, it can be daunting to look at the variety of banks and figuring out how to open one up and with who. That’s where this guide comes in, as we’ll help take you through the process, talk you through some banks and help you get the best account for your needs.
What documents do I need?
The main documents you’ll need a new resident of Canada opening a bank account are your passport and proof of residency/immigration. These may differ from bank to bank, with documents like temporary residence permits, work/study permits and confirmation of permanent residence forms being examples of options that may work to prove your residency.
Can I open a bank account from abroad?
If you have your immigration documents in order already, it may be possible to open your bank account from abroad based on the bank you choose. There would generally be several hoops to jump through, spending a lot of time on the phone with different people. It’s not the most ideal way to open an account, but it may be possible.
Generally, the easier process is to wait until you get into the country, as there are many resources to help newcomers to the country with getting their bank in order. If you have housing, a job and all your needs covered, but just aren’t in the country yet this may be a useful option, but if you haven’t then waiting to see where you live, what banks are close, the job you get and more may make the decision of where to open an account even easier.
International bank accounts
Citibank, HSBC and BNP Paribas are examples of international banks that have options available in Canada, so if you have an account with one in your home country, then you may want to open an account through them. That may not be ideal though, as these accounts are often very expensive, and less than beneficial.
However, a bank in your home country may offer a CAD bank account, which could be another potential option. Similar to the other option we just mentioned, it’s not as ideal as it can be costly and won’t be as accessible (without a major cost) with ATMs in Canada. Instead it might be wise to hold off until you get to Canada to find the best solution for you.
Which Canadian bank is best for my needs?
While there is a plethora of bank options available in Canada, including smaller subsidiaries owned by bigger banks, Canada has five major banks that are widely used across the country; Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO) and Canadian Imperial Bank of Commerce (CIBC). Looking at these banks will help you decide the best option for you.
RBC, the largest bank in Canada, has various accounts and services available and allows newcomers to easily open one of their VIP or No Limit bank accounts for a limited time with no monthly fee. This can be done before officially receiving permanent residency, with a no-fee credit card available as well. Once you receive your residency, you’ll be eligible for a car loan and mortgage as well.
This may seem like a great option to start, and it may be for you, but the important thing to note is that the no monthly fee is limited, and then goes up to $30 per month for VIP or $15 per month for Signature No Limit after. They offer a lot of credit options to start, which is great if you have a good job lined up but could wind up being bad if you aren’t financially secure.
It’s important to remember that banks are businesses, and RBC is the largest lender in Canada. Debt can quickly accumulate, so make sure you’re confident in your ability to stay financially secure before committing to too many credit options.
If you’re starting a business in Canada, there are options for newcomers as well, including a $50 credit for your new account. RBC certainly has a lot of benefits for newcomers, and you may find them to be the best option for you.
At TD Bank you’ll find a variety of different bank account options, including student and youth accounts with no monthly fees and more. For newcomers, they often have deals where you can get one of the unlimited or all-inclusive accounts at no monthly fee, but keep in mind that these are the more expensive accounts. Similar to RBC they have a $4 option that gives 12 transactions, an $11 option that gives 25 transactions and then $16 and $30 Unlimited and All-Inclusive plans respectively that both feature unlimited transactions and other features.
As you’ll find with RBC and the other major banks, TD Bank has various credit options available as well which can serve to be a great help for newcomers who may need a mortgage, car loan and credit card. As with any bank, it’s important to be sure you don’t jump into too many loans you may not be secure, especially with some banks giving more leeway to newcomers,
If TD Bank has the right account for you, they have a lot of potential benefits to take advantage of.
One of the biggest advantages, and most appealing features, of Canada’s third-largest bank, Scotiabank, is the connection it has with the Scene Rewards points program from Cineplex. Cineplex is the largest movie theatre chain in Canada, and through the Scene program customers can earn points towards free movies and other rewards. If you’re new to the country, this can be a great way to get some entertainment, open the account you need and benefit the whole family.
Even the most basic $4 per month account Scotiabank offers is eligible for the Scene rewards program, and they frequently offer promotions for new Scotiabank users to get several movies upfront, in addition to the regular earning potential.
However, Scotiabank doesn’t just have free movies to offer, as their bank account options share a lot of the same similarities, as the other major banks. There are unlimited transaction account offers, a visa debit available, various credit options and more.
There are also student accounts, business accounts and many more benefits to choosing Scotiabank for your banking needs.
BMO is the oldest bank in Canada and provides similar accounts to the other five major banks. As they’re all in direct competition, they tend to offer nearly the same accounts to keep pace with one another.
Similarly, BMO has a variety of options for newcomers, whether you’re a working professional, student or business. And, even without a credit history, there is the potential to receive a mortgage and other forms of credit if you can meet certain criteria of eligibility.
With a long-established history in Canada, BMO has options to help newcomers get acclimated and make banking easy.
As we’ve discussed with the other major Canadian banks, CIBC also has plans for newcomers that provides their unlimited transaction account with no monthly fee for a limited time. Their account options are similar to the others, and they have options for students, professionals and businesses as well.
You’ll have the potential for different credit options depending on your circumstance, with a lot of ATMs available and their advantages.
Ultimately, when evaluating the five major Canadian banks, there are so few differences to main account offerings that it may come down to their bonuses and relationships (such as the Scene Rewards program with Scotiabank) to determine what the best option is for you.
What are the costs associated with opening an account?
The biggest reason people don’t like using banks is because of all the fees. The idea of paying to use your money is a turn off to many, and yet it’s still so vital that most people have on. That’s why it’s important to know the various fees that come your way, the four main pillars of fees being monthly operation fees, transaction fees, ATM fees and international transfer fees.
While banks like Tangerine (a subsidiary of Scotiabank) and Simplii (a subsidiary of CIBC) will offer bank accounts with no monthly fees, it’s common most of the major banks start with at least a $4 minimum monthly fee on their basic accounts. Students will have free options as well, but if you don’t want to concern yourself with counting how many transactions you use each month (to avoid racking up high costs), then you’re like to spending about $15 per month or month on a bank account. Many will offer rebates based on how many accounts you have active or a minimum balance, but for those who may not be able to meet those you’re likely to fall in a $15 - $30 per month range for anything outside of a basic account.
If you do opt for an account that doesn’t include unlimited transactions, then you’ll have to consider the limit you have. A common number for basic accounts is 10, with another account up to 25, with a small fee for each following transaction. It’s also important to consider Interac E-Transfers and other transactions that may have their own fees separate of the regular transaction fees.
While most accounts will allow you to freely use an ATM your bank owns, if you have an online account, or need to use another bank’s ATMs, there are fees to consider there as well. Some premium accounts (which will usually have a high monthly fee) will give you free rein to use other ATMs without added cost. There is usually a fee for using an ATM abroad as well, all important costs to consider.
International transfer fees
If you need to transfer money internationally, the important number to look at is the exchange rate. Some banks may advertise no fee transfers, but they sneak them into the exchange rate. Because all banks and financial institutions add some markup to their rates (whether big or small), they’re able to bump that percentage up enough to cover a transfer fee without having to advertise it. But, there is an easy option to exchange or transfer money internationally that provides the best exchange rates and truly doesn’t charge a transfer fee; that’s us at Knightsbridge Foreign Exchange.
Knightsbridge Foreign Exchange
At Knightsbridge Foreign Exchange we have a variety of different international transfer and exchange services, allowing you just to exchange currency, send money to loved ones, make international payments and more. We do it all while keeping markups low, always providing you with the best exchange rates in Canada. For newcomers to Canada, KBFX can be an incredibly helpful tool if you need to send money back home, transfer money from your home country’s bank account to Canada, and more! We make it simple and fair to exchange and transfer funds across borders at Knightsbridge Foreign Exchange!