How to open a bank account in Canada

If you're planning to move to Canada, you may be feeling a bit overwhelmed. Between getting your visa in order, looking for a place to stay and figuring out what clothes to pack, there's just way too much to do. Thankfully, once you've sorted out your immigration papers (which is probably the most complicated part), opening a bank account is very simple. That’s one less thing to worry about. Here's what you need to do.

What documents do I need?

If you’re not a Canadian citizen, you’ll need the following documents in order to open a bank account:

• your valid, unexpired passport; and
• your permanent residency card or immigration papers.

Different banks may have specific requirements, so it’s a good idea to get in touch beforehand to make sure you have everything you need.

As a general rule, however, it’s likely that your bank will accept one of the following immigration papers:

• Temporary Residence Permit;
• work or study permit;
• Confirmation of Permanent Residence form (IMM 5292 or IMM 5688)

You’ll need to obtain at least a Temporary Residence Permit or a work or study permit before you travel to Canada. Without them, you won’t be allowed to enter the country.

Can I open a bank account from abroad?

It is possible to open a bank account remotely before you arrive in Canada. To apply for a bank account remotely, you’ll need to get in touch with the bank either via live chat, by email or by phone.

First, you’ll be asked a few questions to determine your immigration status (whether you’re a temporary resident on a work or study visa or a permanent resident).

You’ll then have to wait to be contacted by a dedicated account-opening team, which should happen in the following days. You’ll also need to have your immigration papers in order, as otherwise you won’t be able to proceed with your application.

As you can see, the process isn’t straightforward and will take at least a few days to complete. In most cases, you will have to make an appointment and visit a branch once you’re in Canada.

The good news is that Canada’s major banks all have tailored products for newly arrived immigrants. It’s also easier to iron out any difficulties in person. With this in mind, and given the limited choice and waiting time involved in the remote procedure, it may be a good idea to open your account once you’re in Canada.

International bank accounts

You also have the option of opening an international bank account. Several international banks have operations in Canada, including BNP Paribas, Citibank and HSBC. If you hold an account with one of these banks in your home country, they can help you set up a bank account remotely ahead of time.

That said, these accounts are often targeted at high net worth individuals and may be expensive to open and maintain, so they might not be a good fit for you.

Many banks also offer accounts in Canadian Dollars. These products are offered by your bank in your own country, so they may be easier for you to open. However, because the account isn’t a Canadian domestic account, using it in Canada will probably be very expensive.

Which Canadian bank is best for my needs?

There are five major banks in Canada, all of which have special packages for newcomers. They are the Royal Bank of Canada, Toronto-Dominion Bank, Scotiabank, Bank of Montreal and Canadian Imperial Bank of Commerce. Let’s have a look at what each of these banks have to offer.

Royal Bank of Canada

The Royal Bank of Canada is Canada’s largest bank, and offers customer service in more than 200 languages. It also has a comprehensive Newcomers to Canada package. If you’re on a temporary visa, you can open an RBC Signature No Limit Banking Account or an RBC VIP Banking Account at no cost for up to 6 months. You’ll also get a fee-free credit card.

Once you obtain permanent resident status, you will also qualify for a car loan and for a mortgage, even if you don’t have a credit history. If you’re a student, the RBC No Limit Banking Account For Students has no monthly fees and comes with a free Visa Gold or MasterCard credit card. Finally, if you’re a business owner or entrepreneur, you’ll get all the perks of the Newcomers to Canada package plus a CAD$50 credit to start you off when you open a business deposit account.

TD Bank

The Toronto-Dominion (TD) Bank’s New to Canada package includes a checking account that’s fee-free for up to six months and a free credit card with a credit limit of up to CAD$1,000. You may also qualify for a mortgage, even though you don’t have a credit history.

The bank’s student package includes a bank account with no monthly fees and free and paid credit cards. When you use your credit card, you can get points to redeem on flights and other travel expenses.

If you’re planning on starting a business, you can get a tailored service plan that includes overdraft protection and a number of fee-free transactions each month.

Scotiabank

Scotiabank is the third largest bank in Canada and has more than 4000 ATMs around the country. It has a range of accounts to choose from, all of which come with their own perks.

Even on a basic banking plan, you can earn points to redeem on free movies. The account costs CAD$9.95 a month, which will be waived if you keep CAD$2,500 in your account at all times.

The Student Banking Advantage Plan has no monthly fee and unlimited transactions, while the bank’s range of business bank accounts includes overdraft protection of up to CAD$5,000, a tailored business plan and a visa credit card.

Bank of Montreal

Canada’s oldest bank, the Bank of Montreal has a package for newcomers that covers workers, students and business owners. You’ll get a bank account with unlimited transactions and no monthly fee for up to one year, a free MasterCard credit card and even a free safety deposit box for up to one year. You may also qualify for a mortgage even though you’ve just arrived in Canada and don’t have a credit history.

Bank of Montreal’s student banking package includes an account with no monthly fees and a free MasterCard credit card. You’ll also get a student card that entitles you to discounts at various shops all over Canada. You can also choose from a range of business bank accounts, depending on the size of your business.

Canadian Imperial Bank of Commerce

Like the other four major Canadian banks, CIBC has a Newcomers to Canada Plan that’s available to both temporary and permanent residents. The package includes a CIBC Everyday Checking Account with no monthly fees and unlimited transactions for the first year and a visa debit card. If you’re a permanent resident, you can also get up to CAD$55 cashback on a safety deposit box.

CIBC’s student package is more or less the same as the newcomers’ package, but remains fee-free for as long as you’re enrolled as a full-time student.

There’s also a range of business bank accounts to choose from. These include unlimited transactions, flexible fee structures depending on the size of your business and access to a line of credit at preferential rates.

What are the costs associated with opening an account?

In Canada, fees and charges can vary quite a bit from bank to bank, so it’s best to have a look at your bank’s terms and conditions. However, you can expect at least the following costs.

Monthly fees

Banking is free for students and heavily discounted for people over 60. It’s also free for newcomers to Canada, but only for a limited time. Once that period expires, you may be faced with a monthly fee of up to CAD$30. Many banks will waive this fee if you leave a minimum amount in your account. In most cases the minimum balance is in the region of CAD$3,500.

Transaction fees

You will only get a limited number of free transactions per month on many accounts. Anything over this limit will incur a fee (about CAD$1 per transaction). Some accounts do offer unlimited transactions. However, these usually have the highest monthly fees and the highest minimum balance requirements to waive the fee.

ATM fees

Withdrawing cash from an ATM is free if you use your bank’s machines, but costs about CAD$1.50 per transaction when you use another bank’s ATM.

Even worse, it can cost up to CAD$5 plus a 2.5% commission when you withdraw money from an ATM abroad.

International transfer fees

All the major banks include a limited number of free international transfers on their newcomers to Canada packages.

However, while these transfers are advertised as being free, in many cases you will actually have to pay the fee when you make the transfer and then get it back at a later date. Other terms and conditions may also apply, so you should read the fine print carefully before you decide to use the service.

In addition, keep in mind that your home bank may still charge you a fee to complete the transfer.

You may not be getting the best exchange rate, either. Always have a look at what other options are available before you make an international transfer through your bank.