For most Canadians, their first experience with a bank account was opening one as a child. Your first bank account probably housed birthday money and earnings from summer jobs with a manual balance book that you’d stamp each time you deposited at your local branch.
How to Open a Bank Account in Canada
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If this sounds familiar and you’ve had the same bank account since you were a kid, you may no longer have the correct account for your needs.
The bank account you had as a child may have eventually converted to an adult account, meaning you may now be paying higher account fees, having limited transactions, or earning meager interest.
Or, if you’re new to Canada, you’ll need to figure out how you’ll be making spending transactions while you stay.
If any of the above applies to your banking situation, it’s time to open a new account that better suits your needs.
What do I need to open a bank account?
Wondering how to open a bank account in Canada? You can open a bank account either online or in person at a bank branch. The entire process takes around 20 minutes.
You’ll need to decide which bank account you’d like to open (more on that process below) and then select the option to sign up on the bank’s website.
When you’re opening a new bank account, the financial institution will ask for your personal information.
So, what do you need to open a bank account in Canada? It’s wise to gather this information ahead of time to complete the process as quickly as possible. Here’s a list of everything you’ll need:
- Your name
- Your email address
- A banking pin
- Your date of birth
- Your Social Insurance Number (SIN)
- Your primary phone number
- Your employment status
- Your employment industry
- Your employer’s name
- Your occupation
- Your address
The financial institution may also require you to provide proof of identity by uploading a copy of your driver’s license or another photo identification.
Once you’ve completed the application and accepted the terms and conditions, the financial institution will send you details of how to log into your bank account.
Some will mail you your login details while others will make this information available via their mobile app or email.
If your bank account includes access to a debit card, you’ll receive your debit card issued in the mail. You will most likely need to activate the card online before you can use it.
And that’s it! The process of opening a bank account in person is very similar. You’ll need to provide the same information to the bank personnel, but you may be able to obtain your debit card on the spot (this depends on the financial institution).
How to open a bank account as a newcomer to Canada
To open a bank account in Canada as an immigrant, you will typically need to provide proof of identity, such as a passport or government-issued ID, and proof of address, such as a utility bill. You may also need to provide a Canadian mailing address, a work or study permit, or a permanent resident card. Some banks may also require a social insurance number (SIN) or other forms of identification. It is best to check with the specific bank you are interested in to determine their specific requirements. Once all required documents are provided, you can typically open a bank account in person or online, and choose from various types of accounts, such as chequing or savings accounts, or apply for credit products, like credit cards or loans.
Many banks will offer special offers to Canadian Newcomers. HSBC for example offers a World Elite Mastercard and welcome bonus for Canadian Newcomers. Full details on their program can be found in our HSBC Newcomers Program Review & Welcome Offer.
HSBC World Elite® Mastercard®
Rewards
- 3% Earn 3% back in travel rewards on travel-related purchases.
- 2% Earn 2% in travel rewards on gas, grocery, and drugstore purchases.
- 1% Earn 1% on all other purchases.
- Welcome Offer None
- Annual Rewards $310 Learn how we calculate this.
- Annual Fee $149 (first year waived)
- Minimum Income Required Individual: $80,000 Household: $150,000
Pros
- No foreign transaction fee
- First-year annual fee rebate
- $100 annual travel enhancement credit
- Rewards accumulate on almost every dollar spent with the card
Cons
- High annual fee for primary cardholders
- High income and credit score requirement
The HSBC World Elite Mastercard is a travel rewards credit card intended for the high-earning frequent traveller, whether that’s by air, train, cruise ship, or car. With no foreign transaction fee, this card is an attractive option for those who plan to spend frequently while abroad. You can earn rewards on travel and other categories like gas and groceries, and put those rewards toward a variety of other travel-related expenses.
What is a bank account used for?
Bank accounts are a place to keep your money. You can use them to save money, spend money, or both.
You can withdraw money from your bank account as cash or make purchases with a debit card. The money you deposit into a bank account will usually earn interest while it is in there.
There are two types of bank accounts in Canada, chequing accounts and savings accounts.
Chequing accounts are typically used for your daily spending. They are linked to a debit card which you can use to make purchases at merchants.
You can also pay your bills from a chequing account, arrange automatic withdrawals for expenses like rent, pay off your credit card, withdraw cash at ATMs, or send money via e-transfer.
You cahttps://www.wealthrocket.com/banking/e-transfer/n arrange for your paycheque to be deposited automatically into a chequing account by depositing cheques in person or via a mobile app or accepting e-transfers.
The money in a chequing account usually earns a small amount of interest, and the account may be subject to monthly fees. There is normally a limit on how much money you can withdraw in a single day.
Savings accounts
Savings accounts are typically used to keep money that you do not intend to spend immediately. For example, you could save money for monthly expenses like rental payments, savings goals like travel plans, or home down payments. You can also just use your savings account as an emergency fund.
Savings accounts may or may not be linked to your debit card, and you’ll usually make withdrawals and deposits as you transfer money into or out of your chequing account.
You can have multiple savings accounts for various purposes; for example, you may have one account for monthly expenses, one for savings goals, and one for emergency savings.
Savings accounts usually have slightly better interest rates than chequing accounts and may have fees or limits on the number of transactions you can make.
How does a bank account work?
Once you’ve got your bank account open, you can make your first deposit either by direct deposit from your employer, transferring money from another bank account, or depositing cash via an ATM or through e-transfer.
You’ll then have access to that money to spend it however you like — making purchases on your debit card, paying bills, or transferring it elsewhere.
Depending on the bank account, some conditions apply. For example, you may be charged a monthly fee and earn a small amount of interest on your deposits. If you withdraw too much from your bank account, this will put the account into overdraft which will cause you to incur extra fees until you bring the account bank into good standing.
Our final thoughts
Opening a bank account takes about 20 minutes and can be done online, in person, or via a mobile app. When shopping around for the best bank account, don’t be afraid to look beyond the bank that your parents use or the ones you’ve seen advertised on television.
Banks in Canada are incredibly tightly regulated, so look for a bank that offers accounts with no fees and a reasonable interest rate on their savings accounts. Today, many online banks offer fee-free accounts with no limits on transactions and competitive interest rates.
Jordann Kaye
Frequently asked questions
All banks in Canada must be members of the Canada Deposit Insurance Corporation (CDIC). If the bank becomes insolvent for any reason, your deposits are insured and you’ll get your money back.
CDIC insurance covers $100,000 deposits for each banking category, so savings accounts, guaranteed investment certificates (GICs), business savings accounts, tax-free savings accounts (TFSAs), and Registered Savings Plans (RSPs) accounts are all eligible for CDIC coverage.
When shopping around for a bank account, it’s essential to choose one with minimal monthly fees.
Many online banks in Canada have no monthly fees while others will cost several dollars per month (with that fee waived if you keep a minimum balance in your account).
Some other fees are charged for transactions, teller-assisted transactions, overdraft protection, and to send e-transfers.
You need to be the age of majority and a permanent resident of Canada with a social insurance number to open a bank account. Call your bank of choice to ask whether you are eligible to open an account with them if you’re not sure.
