Opening A Bank Account As A Newcomer To Canada: All You Need To Know

Temporary and permanent residents to Canada need to open bank accounts in this country as soon as possible upon arriving – or even sooner – to avoid foreign currency conversion fees when using financial instruments from their home countries here.

“Newcomers may be able to use their Mastercard or Visa debit/credit cards from banks in their home country for a while after arriving in Canada. However, this is not ideal on a long-term basis due to on-going foreign currency conversion fees,” Dr. Enoch Omololu, Savvy New Canadians’ resident personal finance expert, told Immigration.ca.

“It is better to open a new bank account here so they can start building a Canadian credit history which comes in handy when they need to apply for credit later.”

The personal finance expert says getting a bank account in Canada should be the number two thing on any newcomer’s list of things to do, second only to getting a Social Insurance Number.

“This is because they need access to a bank account for many day-to-day activities, including making and receiving payments, as well as getting a credit card,” said Omololu.

When foreign nationals first arrive in Canada, they often have a lot to learn about how the banking system works here and how to handle their personal finances in this new country.

“I have come across people who do not understand that they need to use credit in order to build credit history and improve their credit score,” said Omololu.

“On the flip side, there are newcomers who see easy access to credit as a way to overspend and they quickly get into debt.”

Watch Video

And then, there are the pitfalls of not knowing how to spot the con artists in Canada.

“Newcomers need to understand that Canada has its share of bad actors and there are always people looking to take advantage of them financially through scams, etc.,” said Omololu.

Getting a bank account in Canada isn’t particularly difficult as many financial institutions have services specifically tailored to newcomers.

But the type of documentation a newcomer will need to provide to the bank to verify his or her identity – and the kinds of services for which they may qualify – can depend on whether he or she is here under a temporary visa, like an international student, or coming here as permanent resident.

Permanent Residents Need Permanent Resident Card, IRCC Documents

“The documents required to open a bank account in Canada are tied to a newcomer’s ability to stay here legally,” said Omololu.

“For example, a permanent resident would need to present their passport and Permanent Resident Card or applicable Immigration, Refugees and Citizenship Canada (IRCC) forms.

“An international student would need to show their student visa and may also be asked for proof of enrollment at a school. Foreign workers would be required to show a valid work visa.”

A newcomer’s status in Canada can also determine the level of services he or she may receive.

“More account types tend to be offered to those here on a permanent basis, for example products like mortgages, lines of credit, and other credit facilities. Also, a permanent resident may be offered a $5,000 higher credit limit on their credit card application whereas a student on a student visa may qualify for $1,000 to start.”

When newcomers struggle with English and French, some financial institutions – but not all – can offer customer support in other languages.

“This is an area that financial institutions need to work on,” said Omololu. “Some banks do offer customer support in other languages outside of English and French, but these are few and far between. Multilingual services are available at Scotiabank, TD Canada Trust, RBC, and a few others.”

Ukrainian Credit Union Supports Ukrainian Struggle Against Russia

With Canada opening its arms to an unlimited number of Ukrainians fleeing their war-torn country through the Canada-Ukraine Authorization for Emergency Travel (CUAET), a program launched by Ottawa on March 17, many of these new arrivals can, for example, benefit from the services of the Ukrainian Credit Union.

That financial institution, which has 16 branches in Ontario, is a staunch supporter of Ukraine’s efforts to fend off Russian President Vladimir Putin’s forces.

Earlier this year, that credit union’s CEO, Taras Pidzamecky, announced a $100,000 donation it made to a humanitarian campaign for Ukraine.

“We stand in solidarity with Ukraine and with our employees and members with family in the country,” said Pidzamecky in a statement.

“We commend the Canadian government’s swift and firm action to impose sanctions on Russia and in reinforcing our NATO allies in Europe.”

At Savvy New Canadians, Omololu recommends applicants for immigration to Canada do two things to prepare for their financial integration into Canadian society.

The first is that foreign nationals start the process of opening a Canadian bank account before even leaving their home country, a feature allowed by some but not all Canadian banks.

Some Canadian Banks Allow Foreign Nationals To Set Up Accounts Before Immigrating

“Usually, this involves filling out forms and transferring funds to the Canadian bank while in your home country,” said Omololu. “When you arrive in Canada, you then need to visit a branch to complete the process.”

The other tip is something that can seem counter-intuitive for anyone who has travelled internationally.

Carry cash – at least upon arrival – or transfer money into a Canadian bank account prior to your arrival.

“It is better to have cash in hand so you are not stranded if the bank card from your home country doesn’t work for whatever reason,” said Omololu.

“That said, if you can transfer money to a bank account in Canada ahead of your travel, it may be safer. Also, many of the newcomer bank accounts offer to include free international money transfers for the first year or more, making it easy to transfer funds after you have opened a bank account.”

On the Savvy New Canadians website, the personal finance expert has ranked what he figures are the best newcomer bank accounts at bricks-and-mortar financial institutions in Canada.

They are:

Scotiabank’s StartRight Program

StartRight offers newcomers who have been in Canada for under three years access to a free chequing account for 12 months, savings, credit cards, mortgages, personal loans and free credit scores.

With a Scotiabank Preferred Package Chequing account, the bank’s clients get:

up to a $300 bonus when they meet the eligibility requirements;
no monthly fees for 12 months (costs are $16.95 after the first year but can be waived if the account holder maintains a minimum balance of $4,000;
unlimited debit and Interac e-transfer transactions;
one free withdrawal per month from a non-Scotiabank ATM;
access to a high-interest savings account;
up to $139 in fees waived on Scotiabank credit cards in the first year;
free credit scores, and;
rewards on debit transactions via the Scene+ Rewards program.

RBC Newcomer Advantage

The RBC Newcomer Advantage is offered to permanent residents and international students and allows bank clients to open an RBC No Limit Banking account or RBC VIP Banking account and pay no monthly fees for 12 months.

Afterwards, these accounts cost the account holders $10.95 per month or $30 per month respectively.

The RBC No Limit Banking comes with unlimited debits and Interac e-transfers and:

two free international money transfers per month for six months, and;
access to credit cards, mortgage, car loans, business bank accounts, and investments.

HSBC Bank Canada Newcomers Program

An international bank, HSBC Bank Canada understands the challenges of moving to a new country and offers bank accounts and services uniquely suited to newcomers, including multi-currency savings accounts, globally-accessible bank accounts, and no-charge wire transfers, noted Omololu in his ranking of the bank accounts.

A new HSBC Chequing Account comes with what is billed as up to $1,650 in value with HSBC’s Newcomers Program.

“HSBC provides offers to help newcomers begin their successful journey in Canada while staying connected back home,” noted Omololu.

“Whether establishing the basics like opening a chequing account for payroll deposit, sending money back home to family, or building credit with one of HSBC’s credit cards, HSBC lets you do more with your money.”

CIBC Welcome To Canada Banking Package

This bank’s Welcome To Canada Banking Package is available to newcomers who obtained their permanent resident status within the past five years.

It’s Smart for Newcomers account offers:

no monthly fees for one year (and then charges $14.95 per month afterwards);
unlimited debit and Interac e-transfer transactions, and;
a free safety deposit box for one year with the cost being $60 per year afterwards.

Newcomers can also access various credit cards, mortgages, personal loans, and investment products.

BMO NewStart Program

Another bank program tailored to newcomers who have been in Canada less than five years, the BMO NewStart Program offers one year of free banking under its Performance Plan. This banking package comes with:

no monthly account fees for one year (the fee is then $15.95 per month afterwards but can be waived with a $4,000 daily balance);
unlimited debit and Interac e-transfer transactions;
one free non-BMO ATM withdrawal per month in Canada, and;
a free small safety deposit box for one year (with the fee becoming $55 per year afterwards).

Newcomers also get access to other banking products including credit cards, international money transfers, investments, and mortgage loans.

TD New To Canada Banking Package

TD’s New to Canada Banking is for permanent and temporary residents who have been in Canada for two years or less and offers through its TD Unlimited Chequing Account:

no monthly fees for six months (with the monthly fees becoming $16.95 per month afterwards but are waived with a $4,000 balance);
unlimited transactions (debit and Interac e-transfers);
no TD fees on any ATMs in Canada;
a $20 discount off select TD credit cards during the first year, and;
one free international money transfer per month for six months.

TD also offers a variety of credit cards, loan products, investments, and savings accounts.

Before a foreign national ever opens a bank account, though, he or she should spend a bit of time realistically considering his or her banking needs.

Determining Realistic Banking Needs Is Important To Choose The Right Banking Package

That includes determining roughly the number of banking transactions made on that bank account every month, the account holder’s degree of comfort with online banking, and whether he or she will want credit cards, mortgages, savings accounts, and investment vehicles – and whether he or she wants all those services from the same financial institution.

Although many banks do not charge monthly fees during a promotional period, these can quickly add up once that grace period is over and so the amount of those fees have to be considered, particularly when they are higher with the justification that the account offers more of something else. The same thing applies to transaction fees for such things as ATM withdrawals, Interac e-transfers and online bill payments.

Higher interest rates can be tantalizing but are only one thing to consider. After all, if an account holder’s bank is not very accessible and he or she is uncomfortable with online banking, then that higher interest rate might not be worth the trade-off.

“While most banking transactions can easily be completed from the comfort of your home, you should choose a bank that has branches close to where you live if you plan to conduct lots of in-branch transactions,” said Omololu.

This article was originally published by Immigration.ca. Read the original article here.