First of all, congratulations on making it to one of the best countries in the world; Canada.

We understand that moving to a new country can be a massive adjustment. Things can definitely look overwhelming and different from what you were used to before. One of the first few things you must do when you move to Canada is to open a new bank account.

Much like any other country, the Canadian financial system relies on its banks and other financial institutions (maybe even more so in Canada than other countries). You must have bank cards (i.e. credit or debit cards) to function in Canada. Most of the purchases in Canada are done through these electronic cards.

A credit card also helps you take the first steps towards building your credit score, which is very very important in Canada.

So, what do you need to consider when opening your first bank account in Canada?!

Well, there are quite a few factors to take into consideration, and in this article, we will help you with some basics you need to know to make your decision more effectively.

Leading Banks in Canada to Open an Account with

You might be surprised to know that there are 83 banks operating in Canada. Among these, 35 are local banks (Canadian) and 48 are branches of foreign banks. Don’t get overwhelmed, we are not going to go through each of these. In fact, we are only going to focus on five banks.

Big Five Banks in Canada

‘Big Five’ is a term given to the five largest banks in Canada. These are;

1. Royal Bank of Canada (RBC Royal Bank)
2. Toronto-Dominion Bank (TD Bank)
3. Bank of Nova Scotia (Scotiabank)
4. Bank of Montreal (BMO Bank)
5. Canadian Imperial Bank of Commerce (CIBC)

A few other prominent banks in Canada are the National Bank of Canada, HSBC Canada, Laurentian Bank of Canada (LBC), and Canadian Western Bank.

But for the sake of simplicity, we will only focus on the Big Five banks due to the following reasons;

• These are the largest banks in Canada (by assets, by revenue, by market capitalziation, and more),
• All these banks have the largest branch network in Canada,
• These are all publicly listed banks in the Toronto Stock Exchange (TSX),
• All these banks have operations in foreign countries,
• Canada’s Big Five banks are included in Top 100 banks in the world,
• All these banks have a lenghty history.

What all of these factors culminate into is that these banks are some of the most stable banks in Canada and are able to provide you with the best benefits on your bank accounts.

So, you can quite safely pick any of these banks to open your first bank account.

Opening your first bank account in Canada

Opening a bank account in Canada means you will be opening two bank accounts; 1. Savings account and 2. Chequing account. Both of these are simultaneously opened for you by the bank.

The savings account is used to hold your money to ‘save,’ and the ‘chequing account is used for transactions such as bill payments.

Although you have no choice in whether or not to open these accounts, you have the decision of which account to keep your money in. The below table will help you decide which account to hold your money in and why.

Feature	Savings Account	Chequing Account
1. Primary purpose	Save money for long-term	Retain money for payments in the short run
2. Interest earned on account balance	Eligible	Most times, no
3. Transaction fees	Yes (maybe 1-5 free transactions per month)	Usually, free unlimited transactions
4. Electronic cards	No card	The debit card is linked to this account so you can make payments

You can manage your account funds through an online banking facility, which all of the above banks provide. You can keep all your money in the savings account until you need to make a payment and transfer it to your chequing account just before making the payment from this account. This way, you give your money the best chance of earning interest.

Your credit card will be separate from all these accounts. The bank will open a credit card for you when you open a bank account with them. If they do not bring it up, make sure to let them know that you need a credit card as well. They will be more than happy to open a line of credit for you.

High-Interest Savings Account

Most banks have two different types of savings account–normal and high-interest. As the name states, high-interest savings accounts provide a higher than the normal interest rate, so you can earn a little more money on your account balances.

Don’t let the term fool you though. Bank interest rates are nothing to ride home about in Canada (like most developed countries). Usually, a high-interest saving account will have interest rates around 0.05% – 2% per annum. This is only a ‘better-than-nothing’ option.

Newcomer bank accounts in Canada

Most banks in Canada have identified that newcomers in Canada have very specific needs. If you are migrating at a young age, chances are that you are not very financially stable. So every dollar counts! The banks understand this.

All the Big Five banks mentioned above provide special bank accounts for newcomers in Canada. These accounts are most likely your best bet when opening your first bank account in Canada. Below are the newcomer account names by the Big Five banks.

Bank	Newcomer account name
Royal Bank of Canada	RBC Newcomer Advantage
Toronto-Dominion Bank	TD New To Canada Banking Package
Bank of Nova Scotia	Scotiabank StartRight
Bank of Montreal	BMO NewStart Program
Canadian Imperial Bank of Commerce	CIBC Welcome To Canada Banking Package

Some of the amazing benefits these newcomer accounts provide you (may vary from bank to bank);

• A welcome cash bonus (usually between $100 – $300)
• Welcome gifts (eg: laptops, iPods, etc.)
• First year annual fees are exempted
• A high-interest savings account (or bonus interest rate) attached to the chequing account
• Transaction fee waivers
• Interac e-Transfer^® fee waivers
• A limited number of waivers on foreign transactions
• Safe Deposit box for free up to 1-2 years
• Credit cards with highest possible limits for newcomers
• Annual fee waivers on credit cards

All of the above accounts provide some combination of these perks. So, you should visit each link and find the latest benefits on each bank’s website and pick the best.

Usually, an annual fee waiver is a good option to prioritize since some banks can charge up to $20/month as bank charges. Most banks will allow a fee waiver if you maintain a minimum balance in your account (usually around CA$4,000).

Your first credit card in Canada

As we mentioned earlier in the article, credit cards allow you to work on your credit score. In Canada, your personal credit score impacts many things credit-related. From interest rates on loans, mortgages, auto-financing, and so on. Your credit score increases based on how you utilize credit. Your credit card will be your first entry into building your credit score.

All the above banks provide credit cards. There are so many different types of credit cards in Canada among these banks. Below are some of the different perks associated with different credit cards by different banks.

• reward points
• cashback
• AIR MILES points
• travel benefits (e.g. hotel stays, flight tickets, travel itenaries etc.)
• No-fee cards
• Low interest
• Student cards
• Business cards

Most banks provide rewards based on credit usage. For example, the RBC Rewards program provides reward points on your credit usage that can be accumulated and redeemed for products from selected merchants. Cashback cards provide a small percentage of cash as a rebate on the expenses made on the card. For example, the BMO CashBack Mastercard provides up to 3% cash back on groceries, 1% cashback on recurring bills, and 0.5% cashback on all other purchases.

All the above banks will be happy to provide you with an initial credit limit of anywhere from $2,000 to $5,000, even if you don’t have an income source at the time.

But you MUST make sure that you use the credit card only to spend on expenses that you can pay off within a month. Credit card interest rates are very steep, around 19.99%. So, it is very important to not delay your due payments every month!

Credit cards in Canada are affiliated with both VISA and MasterCard and these are not exclusive for each bank. i.e. RBC bank can provide credit cards with VISA and MasterCard. And this should really not be a serious factor in your decision-making process. Both VISA and MasterCard are very well accepted around the world.

New Students in Canada

If you are a newcomer to Canada for studies, these Big Five banks have you covered there as well. Most banks have special student banking packages that include savings account, chequing account, credit cards, rewards, support and mentoring programs, welcome bonuses, annual fee waivers, student loans, etc.

Check out these student bank accounts from RBC, TD Bank, BMO, Scotiabank, and CIBC.

Student accounts vs Newcomer accounts

At the time of this article, newcomer bank accounts had beat student bank accounts in Canada. There are higher welcome bonuses, better rewards, and a larger variety of options.

However, student bank accounts may come with very unique offers such as special student loans, mentoring programs, special back-to-school offers, and better cashback on groceries.

We believe this covers most of the most important elements for a newcomer to pick a bank account of their choice. There is a bit of comparison you need to do among these features that we have listed throughout this article. But it is worth spending some time before making a commitment. For example, if you are going to be a frequent traveler, a credit card that gives travel perks may be more valuable than cashback rewards.

Let us know if you have a specific situation that you need help with and we will try to answer you to the best of our abilities.

Also, share your experiences in opening bank accounts in Canada in the comments to help everyone else.