When you immigrate to a new country, there are many things that are different from your homeland and the banking system is no exception. Banking in Canada is technologically advanced in some ways and, in others, somewhat lagging other countries. We’ll explore how it works and how you can set up your banking without incurring too many charges.
There are a few different options when it comes to choosing the right bank for your needs.
Traditional banks – there are five large, well-established banks*:
- Bank of Montreal (BMO)
- Royal Bank of Canada (RBC)
- Scotiabank
- CIBC (Canadian Imperial Bank of Commerce)
- TD Canada Trust
As you would expect, these offer a wide range of banking services from personal chequing and savings accounts to business accounts, loans and mortgages.
Challenger banks – these are the newer banks that tend to operate more digitally rather than having branches. These include*:
- EQ Bank
- Motusbank
- Tangerine
- Simplii Financial
Credit unions – these are financial institutions that are owned by the members rather than shareholders. There are hundreds of credit unions in Canada but the five biggest, by membership, are*:
- Vancity
- Meridian Credit Union Limited
- Coast Capital Savings Federal Credit Union
- Servus Credit Union Ltd.
- First West Credit Union
10 Things to Be Aware of When Banking in Canada
- Most chequing (current) accounts charge you a monthly fee for personal banking, although in some cases, if you leave a sizeable balance in your account (c. $4,000 or more) these charges are waived.
- If you are a newcomer to Canada, there are accounts which waive the monthly, if you meet certain conditions such as keeping a minimum balance or having a low number of transactions (under 12).
- On top of the monthly fee, there may also be a per transaction fee if you exceed the limit of free transactions on your account, so it’s vital to shop around to find an account that best meets your needs.
- Canadian shops, restaurants and other outlets support cashless payments. Most places take VISA and Mastercard and allow contactless payments for spend up to around $250 although this can vary by card.
- Canada has its own debit card system known as Interac, which operates in a similar way to the Visa Debit card system.
- For international money transfer payments from Canada, Western Union provides a user-friendly mobile app that allows customers to send cross-border payments to many countries around the world.
- Businesses and individuals in Canada are still using paper cheques more often than in other parts of the world, such as in the USA and UK. Although the usage is falling there were more than 430m cheque and paper transactions in 2020, so you may find you need to get your cheque book out much more often when you move to Canada when paying for things like rent or bills.
- You can withdraw cash from your bank account at many ATMs although there is likely to be a charge for obtaining cash from machines that aren’t owned by the bank your account is held with.
- If you want to obtain credit in Canada, you will need to build up a Canadian credit history. The easiest way to do this is to open a chequing account with a bank that will also provide you with a credit card. Use the credit card to buy your everyday items such as groceries and make sure you pay off the balance in full each month, so you don’t incur interest charges. You’ll need this credit history if you want to take out a loan, mortgage or even a mobile phone contract.
- You can track your credit rating using services such as Equifax and Transunion.
Moving to a new country can be a stressful time, so we hope this brief guide makes your move to Canada a little less challenging.
* Financial institution information listed is current as of August 2022.
