When you move to a new country as a permanent resident (PR) or an international student, having access to your savings is not only essential but also critical. Starting (or restarting) your life in a new place is intertwined with your financial journey, making it important to understand the basics of banking.
Canada’s financial ecosystem is made up of banks, credit unions, trusts, and other financial and insurance companies and it is considered to be one of the most sound and safest in the world. According to the Global Competitiveness Report 2019, published by the World Economic Forum, Canada ranked 9th globally for its financial system, showcasing stability and reliability.
In this article, we will share an overview of the leading banks in Canada, guide you through the process of opening a newcomer account and provide tips and resources to help you learn more about credit and direct deposits.
What are the largest banks in Canada?
The five largest banks in Canada are often referred to as the “big five” in banking. They are:
|Bank||Market Capitalization, 2019 (Billion CAD)||Number of ATMs, Canada, 2019||Number of Branches, Canada, 2019|
|Royal Bank of Canada (RBC)||$152||4,240||1,201|
|Toronto-Dominion Bank (TD)||$136||3,509||1,091|
|Bank of Nova Scotia (Scotiabank)||$92||3,650||950|
|Bank of Montreal (BMO)||$62||3,300||900|
|Canadian Imperial Bank of Commerce (CIBC)||$50||3,075||1,024|
Note: All figures have been rounded off to the nearest whole number.
Sometimes, you may hear the term “big six,” including the National Bank of Canada – although note that its operations are primarily focused in the provinces of Quebec and New Brunswick.
In addition to these banks, there are a couple of digital-only banks, such as Tangerine (a subsidiary of Scotiabank) and Simplii Financial (a subsidiary of CIBC).
You can choose any financial institution of your choice. However, it is helpful to know that the big five banks have newcomer banking packages that specifically cater to permanent residents and international students and are thus better positioned to assist you in your unique situation.
Why should you choose RBC?
As a newcomer in Canada, you want a trusted partner who understands your banking needs. RBC has been such a partner to newcomers for over 150 years. It’s why they support everything we do at Arrive.
In their 2020 rankings, Global Finance magazine placed RBC at the #1 position for World’s Safest Commercial Banks. RBC also ranked 2nd as the World’s Best Bank within the North American region and was the only Canadian bank featured on the winner’s list.
Types of bank accounts for newcomers in Canada
There are two main types of bank accounts in Canada:
- Chequing account: An essential basic account for daily transactions and purchases.
- Savings account: A high-interest account to save money over a longer-term.
Based on your needs and status (PR, international student, etc.) in Canada, RBC offers a few different types of newcomer bank accounts for you to choose from:
Bank accounts for permanent residents
- RBC VIP Banking: Includes unlimited debit transactions, no monthly fee for a year, and three no-fee international money transfers per month for 12 months.
- RBC No Limit Banking: Includes unlimited debit transactions, no monthly fee for a year, and two no-fee international money transfers per month for 12 months.
- RBC Signature No Limit Banking: Includes unlimited debit transactions, unlimited free Interac e-Transfers, and two no-fee international money transfers per month for 12 months.
- RBC High-Interest eSavings: Requires no minimum deposit and has a $0 monthly fee.
- RBC U.S. Personal Account: Ideal for frequent U.S. travellers.
Bank accounts for international students
- RBC Student Banking: Requires no monthly fee and includes 25 free debit transactions per month.
- RBC No Limit Banking for Students: Includes unlimited debit transactions.
Note: Both these accounts don’t require you to maintain a minimum balance and offer unlimited free Interac e-Transfer transactions.
Open an RBC newcomer account before you even arrive in Canada
Banking in Canada may be different from what you’re used to. RBC can help you understand how it works here so that you’re prepared when you arrive. Book a phone appointment now to speak to an RBC Advisor and learn more about how to open a bank account.
As things start to get back to normal, many bank branches are reopening, and some will continue to have reduced hours. You can check the branch locator on the RBC website for the most up-to-date information. Many branches have now restarted scheduling in-person meetings with Advisors.
- If you have your arrival date fixed, you can book an appointment to speak with an RBC Advisor even before you land in Canada.
- Select paper statements for the first three to four months, as these statements typically serve as proof of address while applying for health insurance. Note that for the delivery of paper statements, you will need to provide your permanent address.
Documents required to open a Canadian bank account
You can start the process to open a bank account while you’re still in pre-arrival. Simply book an appointment to speak with an RBC Advisor, and they will guide you with detailed steps.
To open a newcomer bank account, you will require the following documents:
- Your passport
- Confirmation of Permanent Residence (CoPR) and/or Social Insurance Number (SIN)
International students will also need:
- Student permit (IMM 1442) or Temporary Resident Visa (TRV)
- Proof of enrollment (optional, good-to-have)
Note: Permitted identification documents may vary by province.
Start building your credit history early on – get a Canadian credit card
Having a credit rating or a credit score is essential for life in Canada. A credit score is a way for financial institutions to measure your ability to repay loans. A good credit score can ensure you qualify for better interest rates on mortgages and other loans down the line. To get started with building your credit history, having and using a credit card is essential.
Credit cards have the convenience of allowing you to pay for things easily, without having to carry cash. Unlike a debit card, a credit card allows you to make purchases first (even if you don’t have the funds on your account) and pay later. It is like having access to a loan from a bank. However, keep in mind that credit cards have limits and do not offer free money. They can carry very high-interest rates, so your balance should be managed and paid down promptly – this will help you maintain a good credit rating. Once you receive your credit card, get started by making payments for small expenses such as phone bills or groceries. This will ensure you gradually build your credit history.
|Resources to help you better understand credit in Canada|
Here are some popular RBC credit cards for newcomers:
Your banking advisor can help you choose one when you call or visit the branch.
What is Direct Deposit?
Direct Deposit is a feature offered by the banks where an employer or the government can directly deposit it into your bank account. It is a convenient, reliable, quick way to access your money no matter where you are. It takes away from the hassle of waiting for a cheque to arrive and going to a branch or ATM to encash it. Most employers in Canada provide payments to employees through Direct Deposit.
There are a few scenarios where direct deposit can prove useful:
- To receive salaries from your employer (you will usually be required to fill out a Payroll Direct Deposit Form and provide it to your employer to enable this)
- To receive benefits from Canadian government entities such as the Canada Revenue Agency (CRA)
Signing up for Autodeposit
Autodeposit is different from Direct Deposit. This feature can be used during peer-to-peer Interac e-Transfers, a convenient way to send and receive money between individuals. Typically, Interac e-Transfers require you to answer security questions to accept the amount someone sends you. Autodeposit adds another layer of security and convenience, allowing you to bypass the need for security questions altogether and have the funds deposited directly into your account. You can register for it through online banking.
Most financial institutions also offer other services, such as investments, mortgages, safety deposit boxes and general financial planning. Talk to a financial advisor about your specific goals and needs so that they can recommend relevant products for your financial wellbeing. Having access to the right resources can help you get started on the right foot and be well-prepared to start your life in Canada without stress or anxiety.