How To Bank in Canada (4/10)

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Welcome To Canada! Welcome to my new “How To… Canada” series! In this series, I’ll try to put my knowledge to good use and shed some light on my new country: Canada. You will learn how some immigration tips and tricks, how to improve your proficiency in both official languages, how to find a job, how to settle in Canada etc. I’ll publish a new “How To… Canada” post every Saturday.

Unless you’re from the U.S.A, chances are you will find banking a bit confusing when arriving in Canada. Interact, checking and saving accounts, credit cards may be new to you. Besides, opening a bank account on a resident visa and applying for a credit card can seem challenging. Let’s have a closer look at that!

The main commercial banks in Canada are:

As a temporary or a permanent resident in Canada, you will need two pieces of personal identification (your Permanent Resident card, SIN card, Health card, Canadian driver license or foreign passport are among the acceptable piece of I.D) to open a bank account. You do not need to be employed or make a minimum deposit to open the account.

Most banks are used to deal with new Permanent Residents, but they might not be familiar with your status if you hold a specific temporary work permit. Be prepared to explain a few details and to show you’re legal in Canada.

You will first need a checking account, i.e for day to day banking. You will be given a debit card with a PIN number to withdraw money. Note that you will pay a fee for pretty much everything: monthly account fee (anything from $2.00 to $15/ month), withdrawal fee (especially when you withdraw at another bank’s ABM), cheque fees… To see an example of fees that can be charged, have a look here.

This can be confusing but remember a few rules:

  • Always withdraw money from your bank ABM
  • Do most of your transactions online, as they are likely free
  • Calculate how many transaction you do a month and pick a package accordingly. For example, if you live by yourself, you’re pretty unlikely to do 50+ transactions a month… so a basic 15 transactions/ month package should be enough. But as a family (or so I’ve been told!) you may want to consider paying a slightly higher monthly fee that allows you up to 20/30/40 etc. transactions.

Canadians don’t really use cheques (unlike French!). Which is good in a way because you have to order them and pay for them (in France, cheques were automatically ordered by the bank for you and were free). Canadians mostly use Interact, the national debit service. It’s fast and convenient.

Canadians also love their credit card and that might be another challenge for you. North America has a credit card culture (read “A Nation Under Debt“…) and you will need a piece of magic plastic sooner or later. Indeed, credit card help you build a credit history — and you will need a good credit history to apply for a mortgage, a loan etc. in the future. The main credit card companies are Visa, Mastercard and American Express (Amex).

Catch 22 here is you need a good credit history to get a credit card, but you need a credit card to get a credit history. From my own experience, credit history established in your home country is rarely taken into account, which can be frustrating (or maybe a good thing for some of us!).

A side note about the credit history: you will always hear a bunch of commercials about checking your credit history regularly to spot identity thief etc. These companies try to scam people into paying to see their credit report. Getting a copy of your credit report is free from the three credit bureaux (Equifax Canada, TransUnion Canada and Northern Credit Bureaus) if you just fill up a couple of forms and mail them. I tried a few weeks ago and downloaded the form from TransUnion and received my report for free two weeks later. Please, don’t get scammed and don’t pay to see what the law requires these companies to disclose!

You may try the following methods to get your first credit card:

  • Apply for a store credit card (i.e Sears, Canadian Tire, The Bay etc.). These credit cards typically have extremely high interest rates (make sure you pay them in full every month!) but they can be less picky about their applicants. You will then be able to apply for better credit cards.
  • Ask your bank. They know the newcomer’s credit card problem and some bank will offer you to “lock” a certain amount on a bank account (typically $500 – $1,000) and will issue you a low limit credit card (i.e $500). If everything goes well and you pay your credit card in full, they will “unlock” your money a few months later and may even increase your credit card limit.
  • If by any chance you’re a student (even part-time…), mention it and you may apply for a student credit card. These card usually have a very low limit ($500) but are given somewhat more easily. And a few months later, you can apply for a higher limit if needed.
  • If everything fail, just wait a few months (or maybe even a year…). Give yourself some time to settle, get a job, pay your bills and re-apply later.

In Canada, you also have many ways to save and invest money. Saving accounts, registered saving accounts, mutual funds etc. are widely available but depend on your bank.

Those new to Canada’s way of banking (and generally speaking, North America’s) might find the following links interesting:

Happy banking!


About Author

French woman in English Canada. World citizen, new mom, traveler, translator, writer and photographer. Looking for comrades to start a new revolution.


  1. Credit cards are killers…they make you buy more and spend more. I like to collect aeromiles though. I have to cut off few credits…no wonder people are in debt here.

    This is my new URL.

    bluefishs last great read…I found my wedding dress!

  2. Heheh I like Seraphine’s comments about the SIN card…does sound like fun doesn’t it. Yes it is a complicated system and to me it sounds like a middle thing between American and European. Thankfully you don’t use checks, we have found out those are a total waste of time, and aren’t used here at all…except occasionally to refund and overpayment from a business to a customer. I love my debit card and use it often. The fees here are much lower thought, thankfully!! Good info, and fun to read!

    DianeCAs last great read…Blog friends beach party in Sweden!

  3. I noticed when I was in US with my American wife that the transaction fees was extremely high. Of course I don’t know specifically about that in Canada (other than what you have written here – very informative), but it also strikes me how little automatic invoice paying was also. In Norway we often use automatic payment and electronic billings coming direct to your net based bank account.

  4. I guess this won’t be of much use to me…maybe you should do a series on How to Rob a Bank in Canada instead. With the way the markets are going in India (-40% in the last six months) and with inflation in double digits, that’s some lesson I could use very soon. 😀

    Shantanus last great read…Tasting Menu at Ame

  5. Once again very informative post! I am too surprise to know how much information you have?! And very good to know is you are sharing it with all. This shows you must be a great teacher 🙂 Keep that up and thanks a ton for all the information.

  6. @bluefish – I only have one credit card and it’s also to collect aeroplan points. I really don’t want to be in debt and I know how easy it can happen.

    @Seraphine – You’re always to witty! Love it. I got my SIN card after I got married. Does that answer your question? 😉

    @Eric “SpeedyCat” – Weird, cause here we can have a bank account in US$. Not that we want to right now but…

    @DianeCA – I have never used checks because I was too young when I left France. I like debit… it’s more convenient, for sure. Cheques feel old to me!

    @RennyBA – Canadians do a lot of transactions online too I think. Now France is pretty backward in term of banking (high fees bad service) but I find Canada “fair” enough.

    @Aiglee – Thank you!

    @Shantanu – I can email you the “rob a bank” but you don’t know me, okay? 😉

    @Ulquiorra – 😆 Didn’t even noticed! Yep, in Canada, no messing around with money 😆

    @Annie – Thank you! Yep, I guess I love teaching things… even when I’m not working!

  7. Let me make another plug for PC Financial bank. It’s affiliated with CIBC. PC Financial does not charge fees for basic transactions, provides free cheques, and has a good interest rate for savings accounts. As far as I know, actual branches are located mostly in Superstore locations–some are staffed and some are not. But the phone service is excellent and you can also do online banking.

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