Living in Canada: How to Choose a Bank | MyConsultant

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Living in Canada: How to Choose a Bank

Living in Canada: How to Choose a Bank

No matter where in the world you live, having a bank account is a valuable resource that can help you protect your savings, receive payments from your employer, and pay your bills.

Opening a Bank Account in Canada

When you move to Canada, you will likely want to open a bank account so that you can pay rent, receive your paycheques, and keep your earnings in a safe and insured space. Every country has different policies and laws around banking, so we have put together a simple and comprehensive guide to banking in Canada. When you first move to Canada, opening a bank account can feel like an overwhelming task. However, it is quite a straightforward process. Provided you have the right identification, it is actually very simple and quick. You legally have the right to open a bank account in Canada even if you don’t currently have a job, don’t have any money for an initial deposit, and/or have declared bankruptcy in the past. What’s more, you don’t have to be a Canadian citizen or even live in Canada permanently to get started financially. 

Choosing the Right Financial Institution

Choosing a bank is an important decision, as you will want to go with an institution that suits your needs. You might want to go with an online bank, or a credit union, or a bigger brand that has branches throughout the country. 

Canada has five large national banks that are often referred to as the “Big Five”:

  • Bank of Nova Scotia (Scotiabank)
  • Toronto-Dominion Bank (TD)
  • Royal Bank of Canada (RBC)
  • Bank of Montreal (BMO)
  • Canadian Imperial Bank of Commerce (CIBC)

You can even find branches of these banks throughout the United States and around the world. The smaller, so-called ‘second-tier’ Canadian banks can also be excellent options, and include National Bank of Canada, Canadian Western Bank, Laurentian Bank, Tangerine Bank, and HSBC Bank Canada. You might also choose to go with one of two well-known non-bank consumer financial institutions: ATB Financial (which is owned by the Government of Alberta) and the respected Desjardins Group (a large alliance of credit unions). 

What’s the Difference between a Credit Union and a Bank in Canada?

Many Canadians choose to bank with credit unions. Credit unions offer many of the same services, accounts, and products as traditional banks, but they have some specific differences that you should know about. 

Banks are specifically designed to be for-profit institutions. Therefore, every transaction and service is meant to make the bank a profit, and so there are often a lot of fees attached.  Banks make the lion’s share of their profits by lending money and charging interest on repayments. 

On the other hand, credit unions are not-for-profit institutions. They exist to serve their members, and they do not aim to make a profit. When they do make dividends, they distribute these back amongst their members. While they have benefits, they often have fewer branches. 

How to Choose the Right Bank Account for Your Needs

Before you start the process of applying for a bank account, you should think about the following factors:

  • What do you plan to use the account for? Is this for saving, or for making payments and receiving your paycheques?
  • What kind of features do you want or need? Some bank accounts come with additional insurance, interest, and bonuses 
  • Do you want a credit card?
  • What are the charges and fees on the different types of accounts?

Remember – every financial institution offers different benefits to their clients, and some may have drawbacks for your own needs. Make sure you think about these factors carefully.  

How to Open a Bank Account in Canada:

  • Choose the institution that you want to bank with
  • Call or email them (or ask in person) to find out whether you need to make an appointment. You can also search for this info on their website
  • Provide them with one of the acceptable forms of identification (see below) 
  • Note that some online-only banks may allow you to register for and open a bank account solely online

What Kind of Identification Do You Need to Open a Bank Account in Canada?

You can use three different identification combinations to open a bank account in Canada. (The following list applies to most banks in Canada.) Please note that these must be the originals, not photocopies or online scans. 

Option 1: You must show two (2) options from List A:

List A

  • A valid Canadian driver’s licence (as permitted by provincial law)
  • Canadian Social Insurance Number (SIN) card 
  • birth certificate (issued in Canada)
  • provincial or territorial health insurance card (as long as it can be used as ID according to provincial or territorial law)
  • current Canadian passport
  • Canadian Old Age Security card 
  • Certificate of Indian Status
  • Certificate of Canadian Citizenship, or Certification of Naturalization
  • Permanent Resident card or an Immigration, Refugees and Citizenship Canada (IRCC) form IMM 1000, IMM 1442, or IMM 5292

List A can also include a document or card that includes your signature and photo as long as it is issued by one of the following authorities (or by one of its successors):

  • Saskatchewan Government Insurance
  • Department of Community Government and Transportation of Nunavut
  • Insurance Corporation of British Columbia (ICBC)
  • Alberta Registries
  • Service NL of the province of Newfoundland and Labrador
  • Department of Service Nova Scotia and Municipal Relations
  • Department of Transportation and Infrastructure of the Province of Prince Edward Island
  • Service New Brunswick
  • Department of Transportation of Northwest Territories

Note that Immigration, Refugees and Citizenship Canada (IRCC) can also issue form IMM 5688 as a Confirmation of Permanent Residence (CoPR), and some banks will accept this. Always check with them individually to see if they will accept this form. 

Option 2: This option allows you to present one piece of ID from List A along with a piece of ID from List B. You will notice that List B is often a lot more helpful for newcomers to Canada!

List B

  • An employee ID card with your picture on it that has been issued by a well-known employer in your area
  • Canadian credit card with your name and signature 
  • A debit card with your name and signature 
  • A client card from the Canadian National Institute for the Blind, complete with signature and photo
  • A current foreign passport from any country in the world

Option 3: This is another good option for newcomers to Canada, especially if you do not have any ID from List B.  Option 3 allows you to:

  • Present a piece of ID from List A and pair it with having someone in good standing with the bank or in the community confirm your identity (that you are who you say you are) 

When Do You Need a Social Insurance Number?

Before you start the process of applying for any bank account that accumulates interest, you need to have acquired your Social Insurance Number (SIN). These kinds of accounts include interest-bearing accounts and Registered Retirement Savings Plans (RRSP). They need to have your SIN so that they can provide your banking information and all the interest earned to the Canada Revenue Agency each year. 

Information Your Bank Must Provide to You When You Open an Account

No matter how you open an account (whether in person, by phone, or online) with a bank or credit union, they must provide you with information that includes:

  • A copy of your banking agreement
  • Interest your account might earn, if any
  • How this interest will be calculated
  • A list of all fees related to the account’s charges
  • Details related to how they will contact you in the case of a fee increase or additional charges
  • How to lodge a complaint, and how the institution handles complaints

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