Banking FAQ: Everything Newcomers Need to Know About Canadian Banking

What are the major banks in Canada?

Canada has five major banks, often called the "Big Five": Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO), and Canadian Imperial Bank of Commerce (CIBC). There are also popular alternatives including National Bank of Canada, Desjardins (primarily in Quebec), HSBC Canada, Tangerine (online, owned by Scotiabank), Simplii Financial (online, owned by CIBC), and EQ Bank (online). Credit unions are another option, especially strong in British Columbia, Alberta, Saskatchewan, and Manitoba. Most of the Big Five have dedicated newcomer banking programs.

How do I open a bank account as a newcomer?

You can open a bank account in person at any bank branch with valid identification. Most banks accept your passport and one additional piece of ID such as a study permit, work permit, or permanent resident card. Several banks allow you to open an account online before you arrive in Canada, including RBC, Scotiabank, CIBC, and BMO through their newcomer programs. You do not need a Social Insurance Number (SIN) to open a basic account, although the bank will request it within a reasonable timeframe for tax reporting. There is no minimum deposit required for basic accounts.

What is a newcomer banking package?

Most major banks offer special packages for newcomers that include benefits not typically available to other customers. These packages often feature no monthly fee for the first year, a free credit card (sometimes with no credit history required), free cheques, unlimited transactions, and sometimes a small welcome bonus. RBC's Newcomer Advantage, TD's New to Canada program, Scotiabank's StartRight, BMO's NewStart, and CIBC's Welcome to Canada packages are the most popular. These packages are usually available for up to three years after you arrive in Canada. Compare the specific benefits before choosing.

How does a credit score work in Canada?

Canada has two credit bureaus: Equifax and TransUnion. Your credit score ranges from 300 to 900. A score of 660 or above is considered good, and 760 or above is excellent. Your score is calculated based on payment history (35%), credit utilization (30%), length of credit history (15%), types of credit (10%), and new credit inquiries (10%). As a newcomer, you start with no credit history in Canada. Your credit history from your home country does not transfer, although some programs like the CIBC Global Money Transfer may consider international credit history. Building credit takes time, usually six months to a year of consistent responsible use.

How can I build credit as a newcomer?

Start by getting a secured credit card if you cannot qualify for a regular one. A secured card requires a deposit (usually $500-$1,000) that becomes your credit limit. Use it for small purchases and pay the full balance every month. Get a Canadian phone plan in your name, as phone companies report to credit bureaus. If you rent, ask your landlord about reporting rent payments to credit bureaus, or use services like Borrowell Rent Advantage. After six months of good credit card use, apply for a regular credit card. Consider a small credit-builder loan from a credit union. Never miss a payment, and keep credit utilization below 30%.

What types of bank accounts are available?

Canadian banks offer several account types. Chequing accounts are for daily transactions like paying bills and receiving your salary, often with a monthly fee that can be waived with a minimum balance. Savings accounts earn interest but may limit the number of free transactions. Tax-Free Savings Accounts (TFSAs) let you earn interest and investment income tax-free with an annual contribution limit ($7,000 in 2026). Registered Retirement Savings Plans (RRSPs) allow tax-deductible contributions for retirement. First Home Savings Accounts (FHSAs) offer tax-deductible contributions for your first home purchase. Joint accounts are available for couples.

How much do bank fees cost?

Monthly fees for chequing accounts at the Big Five range from $4 to $30 depending on the package. Basic accounts with limited transactions cost less, while premium accounts with unlimited transactions, included credit cards, and other perks cost more. Many banks waive fees if you maintain a minimum balance (typically $3,000-$6,000). Online banks like Tangerine, Simplii Financial, and EQ Bank offer free chequing accounts with no monthly fee and no minimum balance. ATM fees apply when you use a machine outside your bank's network, typically $2-$3 per transaction. International wire transfers cost $25-$80 depending on the bank.

What is an Interac e-Transfer and how does it work?

Interac e-Transfer is Canada's most popular method of sending money between individuals. You send money through your banking app or online banking using the recipient's email address or phone number. The recipient gets a notification and deposits the money into their account. Most banks include unlimited e-Transfers in their chequing account packages, though some basic accounts charge $1-$1.50 per transfer. There is a sending limit, typically $3,000 per transaction and $10,000-$25,000 per day, depending on your bank. E-transfers are processed in minutes. You can also set up auto-deposit so incoming transfers go directly into your account without a security question.

Do I need cheques in Canada?

Cheques are used much less frequently than in the past but are still needed in certain situations. You may need a void cheque to set up direct deposit for your employer, to provide to the CRA for tax refunds, or to set up pre-authorized payments for rent or insurance. Most banks provide a few free cheques, or you can often get a void cheque digitally through your online banking. Post-dated cheques are sometimes used for monthly rent payments. If you need a physical cheque book, they cost $30-$75 from your bank. For most daily transactions, debit cards, credit cards, and e-Transfers have replaced cheques.

How do I send money to and from my home country?

Several options exist for international money transfers. Traditional bank wire transfers are reliable but expensive, costing $25-$80 with unfavorable exchange rates. Specialized services like Wise (formerly TransferWise), Remitly, and OFX offer better exchange rates and lower fees. PayPal and Western Union are also available. For large amounts, a foreign exchange broker may give better rates. Processing times range from minutes (Wise, Remitly) to 3-5 business days (bank transfers). When comparing services, look at the total cost including both the fee and the exchange rate markup, which is where banks often hide significant charges.

What is a debit card and how does it differ from a credit card?

A debit card withdraws money directly from your chequing account when you make a purchase. In Canada, the debit system is called Interac, and debit cards are accepted almost everywhere. A credit card borrows money from the bank, and you pay it back later. Debit cards do not help build credit history, while responsible credit card use does. Most Canadian debit cards use chip and PIN technology, and many support tap-to-pay for transactions under $250. You receive a debit card when you open a chequing account. There is no application or credit check required for a debit card.

What is a GIC and should I get one?

A Guaranteed Investment Certificate (GIC) is a low-risk investment where you deposit money for a fixed term (typically 1 to 5 years) and earn guaranteed interest. Rates vary by institution and term but are generally higher than regular savings accounts. In early 2026, GIC rates range from 3% to 5% depending on the term and provider. GICs are insured by the Canada Deposit Insurance Corporation (CDIC) up to $100,000 per institution. Some newcomers are required to purchase a GIC as part of their study permit application (typically $20,635). Cashable GICs let you withdraw early, while non-redeemable ones lock your money for the full term.

Can I use my bank card from my home country in Canada?

Yes, you can use international debit and credit cards at Canadian ATMs and merchants, but you will incur foreign transaction fees (typically 2.5% to 3.5% of the transaction) and unfavorable exchange rates. ATM withdrawals from foreign cards also incur a surcharge from the Canadian ATM operator ($3-$5) plus potential fees from your home bank. It is best to use your foreign card only temporarily until you open a Canadian account. Consider getting a Canadian credit card with no foreign transaction fees if you travel internationally often. Cards on the Visa, Mastercard, and Amex networks are widely accepted in Canada.

What is the TFSA and why is it important for newcomers?

The Tax-Free Savings Account is one of Canada's best financial tools. Any investment income earned inside a TFSA, including interest, dividends, and capital gains, is completely tax-free. The annual contribution limit is set by the government each year ($7,000 in 2025 and 2026). Contribution room starts accumulating from the year you turn 18 and become a Canadian resident for tax purposes. As a newcomer, you only accumulate room from the year you become a tax resident of Canada. You can hold various investments inside a TFSA, including savings accounts, GICs, stocks, bonds, and mutual funds. Withdrawals are tax-free and the room is restored the following year.

How do I pay bills in Canada?

Most Canadians pay bills through online banking. You can add billers (utility companies, phone providers, credit cards, government agencies) to your online banking and pay them directly. Pre-authorized debits let companies withdraw payments automatically from your account. Credit card payments can be made online, by phone, or at an ATM. Property taxes can usually be paid through your bank. The CRA accepts tax payments through online banking. Some landlords accept e-Transfers for rent. Paper bills can be paid at any Canada Post location. Setting up automatic payments helps avoid late fees and protects your credit score.

What is mortgage pre-approval and when should I get it?

A mortgage pre-approval is a lender's conditional commitment to lend you a certain amount for a home purchase. It locks in an interest rate for 90-120 days and shows sellers you are a serious buyer. To get pre-approved, you need proof of income, employment verification, a credit check (minimum score of 600-680 depending on the lender), and documentation of your down payment. As a newcomer, some lenders offer special programs with lower down payment requirements if you have been in Canada for less than five years. Pre-approval does not guarantee final approval, which depends on the specific property you choose.

Are Canadian bank deposits insured?

Yes. The Canada Deposit Insurance Corporation (CDIC) insures eligible deposits at member institutions up to $100,000 per insured category. Covered deposits include savings accounts, chequing accounts, GICs with terms of five years or less, and certain other products. TFSAs, RRSPs, and RRIFs are each covered separately up to $100,000. This means you could have more than $100,000 in total coverage at a single institution across different categories. Credit union deposits are covered by provincial deposit insurance corporations, which in some provinces offer unlimited coverage. Online banks that are CDIC members offer the same protection as traditional banks.

What should I do if my bank card is lost or stolen?

Contact your bank immediately to report the loss. Most banks have 24/7 phone lines and in-app options to temporarily lock or permanently cancel your card. If you suspect fraud, ask the bank to place a fraud alert on your account. Review your recent transactions and report any unauthorized ones. The bank will issue a replacement card, usually within 5-10 business days, or you can pick one up at a branch sooner. If you need cash urgently, visit your branch with photo ID to make a withdrawal. Update any automatic payments linked to the old card number once you receive your new card.