When I came to Canada I did not get enough time to explore the financial system and plan for my next steps towards banking needs. If you want to prepare for your finances, I have listed down the points on How to manage your finances as a newcomer in Canada, from my personal experience.
As a newcomer, I had to consider a lot of factors like setting up the house (the big part of renting a house was already taken care of by my wife as she came 6 months before me), job, kids’ education and managing finances.
While I could not research much about the banking system and opened an account with the bank with which we were associated from the beginning. As they say, “catch them young”, this is what happens with most of us. As a student applying for a Study Permit under the Student Direct Stream, you are required to deposit CA$10,000 in a Guaranteed Investment Certificate (GIC) in Canada. At the time when we were preparing for the application, the best bank to open a GIC was CIBC as they had a local tie-up for funds transfer and took the least time to open the GIC. When you land in Canada, they open a chequing account and offer you a credit card and so do all the Banks. This is how the banks are able to retain most of the newcomers.
In case you have not yet opened your bank account in Canada and are looking for the best option, here is the list of the banks you can choose from. You have a choice between traditional banks and Online-only banks or Direct Banks. The main difference between these banks is that Traditional banks have physical locations/branches for a personalized banking experience (only if you need one) and online banks do not. The benefit of opening an online bank account is that you don’t have to worry about the monthly management fees. Read here about the Online banks with no monthly fees.
You will also find a lot of promotional offers from the banks to attract newcomers or international students. I have listed down a few I could find at the time of writing this article (March 2022). Most of the financial institutions (banks and credit unions) offer promotional offers to attract newcomers, international students and those who have recently landed in Canada and wish to open another bank account.
While most of the top banks have similar service offerings, in order to compare, you must always look for the services you would be using the most. Most of the list goes as the following in the priority sequence:
- Chequing Account
- Credit Card
- International transfers
- Investment Account
- Mortgage for new home
In the beginning, what I did was to open an account in a traditional bank, and it helped as we had to visit the branch a few times to get the address proof, bank direct credit forms etc. Although these services are easily available with online banks too sometimes it’s easier to simply walk into the bank and get your work done.
Once you have a good understanding of your requirements, you may switch your bank or continue with the same bank. A few points to consider before you switch.
Monthly Service Fees: Almost all traditional banks offer a promotional period of 1 year when all your transactions are free and the monthly transaction fees are not charged. After a year, monthly fees apply as normal but the fees may be waived by a few banks if you keep a daily/monthly minimum balance as suggested by the bank
Interest Rates: While this is not a big factor when considering the banks as the interest rates offered are one of the lowest, especially if you are coming from India, you will not find it enticing enough to decide based on this factor. Having said that, there are a few banks that offer higher than normal interest rates on the savings account. Therefore, in case you plan to keep a huge amount of funds in these accounts you may consider a high interest-paying bank. EQ bank (an online-only bank), for example, pays interest on the chequing account balance.
Promotional offers for the Newcomers
Here are the bank promotional offers available to the newcomers/international students by the top five traditional banks in Canada.
The Royal Bank of Canada has over 17 million clients worldwide and largest in terms of net revenue and capitalization. It offers the RBC Newcomer Advantage program offered to Newcomers (Permanent residents, Workers and International Students). The program offers benefits of up to CA$650 as follows:
- $100 cash on account opening by defined time and qualifying criteria
- No Monthly-Fee for a Year.
- Unlimited debit transactions in Canada
- No RBC fee to use another bank’s ATM in Canada
- Free Interac e-Transfer transactions
- 1 book of 50 cheques free
- Up to 6,000 RBC Rewards Points with an RBC Rewards+ Visa credit card
- No annual fee, first year
- 2,500 welcome RBC Rewards (points upon approval)
- Additional up to 3,500 bonus RBC Rewards points when you go digital within 60 days of card approval
- Up to $15,000 credit limit. No credit history required for RBC personal banking clients depending on the income and asset requirements
- 2 Free International Money Transfers per Month for a Year
- Free Small Safe Deposit Box for 2 Years
TD’s New to Canada Banking is for the newcomers who have been in Canada for less than 2 years. TD Unlimited Chequing Account offers:
- No monthly fees for 6 months; waived if CA$4,000 balance is maintained
- Unlimited debit and Interac e-Transfers transactions
- No TD fee on any ATMs in Canada
- CA$20 discount for the first year on select TD credit cards
- Free international money transfer – 1 per month for the first 6 months
Apart from GIC, TD Bank also offers a special offer for International Students.
Scotiabank, the third-largest bank in Canada by asset size, offers the StartRight Program which boasts about the benefits of up to CA$1250 to the newcomers who switch to Scotiabank. The StartRight program is designed for newcomers who have been in Canada for pst 3 years.
- A $300 welcome bonus with the Scotiabank Preferred Package chequing account when you meet the eligibility requirements
- No monthly fees for 12 months (costs $16.95 after the first year) or it can be waived after the first year if you maintain a minimum balance of $4,000
- Unlimited debit and Interac e-Transfer transactions
- 1 free withdrawal/month from a non-Scotiabank ATM
- Unlimited no-fee international money transfers
- Free small safety deposit box for a year
- Get 10 free equity trades when you invest a minimum of $1,000 in a new Scotia iTRADE® account
- Free credit scores
- Apply for a Scotia Momentum® Visa Infinite credit card account and earn 10% cash back on all purchases for the first 3 months (up to $2,000 in total purchases)
This program is provided to newcomers who have arrived in Canada within the last 5 years. The BMO NewStart Program offers 1-year of free banking under this plan. It offers the following:
- No monthly account fees for 1 year; waived after a year if a $4,000 daily balance is maintained
- Unlimited debit and Interac e-Transfer transactions
- 1 free non-BMO ATM withdrawal per month (in Canada)
- Free small safety deposit box for first 1 year
CIBC Welcome To Canada promotion
CIBC’s CIBC Smart™ Account is for the newcomers who arrived within the past 5 years in Canada. The special promotion offers benefits of up to CA$350. A CIBC Smart for Newcomers account offers:
- No monthly fees for 1 year
- Unlimited debit and Interac e-Transfer transactions
- Free safety deposit box for 1 year