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How to open a Canadian bank account

Opening an account with a Canadian bank is one of the first things to plan for immediately after moving to the country.

According to a World Economic Forum study, Canada is among the top three countries with the safest banks in the world. Canada has had only two small regional bank failures in almost 100 years.

The Canadian banking system is developed and extensive. There are about 90 banks in the country, some 6,000 bank branches and more than 18,600 bank-owned ATMs (the highest per capita rate in the world).

When you move to Canada, you don’t have to delay opening an account: you’ll need it to get debit and credit cards, make everyday purchases and build a credit history.

What you should know before opening an account

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Before you open an account, you need to understand the following issues:

  • how you will use the account: to save (savings account) or to make outstanding payments (checking account). Deposits are designed to accumulate funds for a small percentage, current accounts – to make everyday purchases.
  • what are the service charges on the account. Large banks do not charge fees to immigrants for the first 6 or 12 months. Students and seniors can open accounts for free.
  • Is there a transaction limit? For unlimited debit cards, additional service fees are charged. For cards with a limit, the fee is lower, but if you exceed the number of transactions, you will have to pay a penalty (approximately 1 Canadian dollar per transaction.
  • what interest will be transferred to keep the money in a savings account. It is usually about 1% for Canadian dollar accounts and less than 0.5% for U.S. dollar accounts.

The right to create an account at a bank

You can create an account at a bank (also known as a personal or deposit account) or any other type of savings accounts at banks. This covers federal credit unions as well as licensed foreign banks.

You can also avail this service at any provincially-regulated financial institution or any other kind of federally regulated financial institutions that provide this service.

You are able to open a bank account even if:

  • Don’t have a job
  • You don’t have the money to deposit into the account in the first place
  • are in bankruptcy

You can establish a bank account in person, via electronic methods or over the phone. The bank has to be able to verify your identity by presenting a valid identification.

Call the bank and determine whether there are other options to create an account. The banks that operate exclusively online might require you to already have an account with an other financial institution prior to opening an account on your behalf.

You must be provided with information when you sign up for an account at a bank

When you open a new account with a bank it should provide you with information regarding your account. For instance, details regarding fees, increase in charges, and any new charges. This is true even if you create a new account with the same bank.

Your bank has to inform you about increases in charge

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If a bank is able to increase fees or creates new charges, they has to provide written details regarding the change.

If you weren’t informed of the change in charges or the new fees prior to their introduction You can file an appeal.

Alerts via electronic technology from banks

Your bank is required to notify you electronically immediately in two situations in the event of:

  • the amount in your savings or chequing account is below $100 or the amount you’ve agreed to by contacting your bank
  • the amount of credit you can access on your personal credit card or line of credit is below $100 or the limit you’ve agreed to with your bank

These alerts are designed to prevent you from getting into an overdraft or going beyond your credit limit which could result in charges.

Be aware the bank you trust will not solicit your account or personal information via text or email. Any message asking for this kind of information may be fraudulent.

You can open a bank account even is not possible if there’s no Canadian citizen

It is possible to establish a bank account using the correct identification within Canada even if you:

  • You’re not an Canadian citizen.
  • you reside in a different country

You might have to visit your bank personally in order to open an account with the bank. Contact the bank for more details.

You will need a valid ID to establish an account at a bank

To create a bank account the bank has to verify your identity using an authentic documents.

It is possible to meet the ID requirements in two methods that will let you meet the identity (ID) conditions. You need to provide a valid ID and not photocopies.

(1)Provide two documents from a trusted source:

  • One document that identifies your address and name.
  • another document that indicates your name as well as the your birth date

2. The 2 documents for identification must be taken from one of the following lists:

  • Identification provided by Government of Canada or the provincial government
  • Recent tax assessment notices sent out through government officials of the Government of Canada or the administration of a province or municipality
  • recent announcements of benefits from recently issued statements about benefits by the Government of Canada or the provincial government
  • Recent Canadian charges for utility services
  • recent credit statement from a credit
  • foreign passports

(2) Provide any evidence from a trustworthy source that confirms your name and the date of your birth. This is only valid when your identity can be verified by:

  • A customer that is current with their bank or
  • anyone who is in good standing within the community in which you’re opening the account.

What should you consider prior to opening an account with a bank

Before opening a bank accounts You may want to take into consideration the following factors:

  • what you intend to do with the account, for instance to make or save money
  • charges or charges on the account
  • you earn interest on the funds in your account
  • If your deposit is protected through deposit insurance

Before you sign-up with an account ensure that you know all the details of the agreement, which include charges. You can ask questions about anything you aren’t sure about. Keep the copy of the account agreement to keep for your records.

The transfer of an account between banks

You can decide to transfer your account from one institution to another one if they offer an option that is more suitable for your requirements. It’s an excellent idea to check your bank account periodically.

Many financial institutions offer processes to help with the transfer. This could include arranging for your previous financial establishment to move all of your debits that you have authorized to transfer to the new account.

Keep your old account active while you transfer funds. Cut the old cheques and debit cards to stop fraud.

Review your statements from both banks until you’re certain:

  • the new account is functioning without issue.
  • you’re not making identical payments two times

If a bank won’t create an account on your behalf

The bank does not have to set up a bank account on behalf of you If:

  • There are good reasons to be able to conclude that your account may be used for fraudulent or illegal motives.
  • you’ve had a history of fraud or illegal activities at financial institutions in the last seven years.
  • It believes that you have did not lie in the details you provided
  • It is concerned that you could it believes that you could cause physical harm it, or harass or abuse other employees or customers.
  • If you do not have an account and only offers accounts that have to be connected with an account of another bank
  • You shouldn’t let it make any steps to confirm that the ID you showed is valid
  • If there is an official credit union in the case of the institution, can’t have to sign up to join when it asks for you to do so.

If a bank is unable to establish a bank account on behalf of you, they must inform you in writing.

You must also inform you:

  • Their procedure for dealing with complaints
  • The name and address of the body external to complaints (ECB) that they are members and the contact information for the ECB
  • The Financial Consumer Agency Canada’s postal address, web site and phone number

If a financial institution won’t allow you to open a bank account and you feel that you’ve been unfairly treated You can make an action.

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