Financial tips for newcomers to Canada

Opening a bank account is one of the first steps to managing your finances in Canada. A chequing account is designed for everyday transactions like paying bills, receiving direct deposits, and making purchases, while a savings account is meant to help you grow your money by earning interest on deposits. 

Chequing accounts typically offer low or no interest and include at least a few free transactions, whereas savings accounts have higher interest rates but are not ideal for frequent withdrawals due to potential limits or fees. 

When it comes to choosing an account for newcomers, the first thing to do is decide which institution you’ll be banking with. Here are some options to consider. 

The big six banks

Canada’s “big six” banks – RBC, TD, Scotiabank, BMO, CIBC, and National Bank – are the largest financial institutions in the country and have branches from coast to coast. While they’re convenient because they have the most locations and ATMs to access, they often charge higher fees than smaller institutions. However, many of these big banks offer perks for newcomers, like no fees for your first year living in Canada. 

Digital banks

For no-fee options, digital banks like Tangerine, Simplii Financial, and EQ Bank offer online-only services and lower costs. They’re great for those who prefer managing their finances online.

Credit unions

Credit unions operate on a not-for-profit model, offering lower transaction fees and competitive interest rates. They’re community-focused, so they may have fewer branches but can be a good option if you’re looking for a more personal touch.

In some countries, healthcare is a major expense. In fact, medical debt is one of the leading causes of bankruptcy in the United States, making up 40% of the total number of bankruptcy filings in 2019. Luckily, Canada’s healthcare system is publicly funded, but there might be a waiting period before your coverage kicks in depending on where you live.

Provinces with waiting periods

If you move to New Brunswick, Newfoundland and Labrador, Manitoba, Prince Edward Island, Nova Scotia and Alberta, you’ll be covered by their provincially-funded healthcare systems right away. 

However, if you’re a new resident of Ontario, British Columbia, Quebec, Saskatchewan, Yukon, Northwest Territories or Nunavut, you’ll have to wait up to three months before you can access the publicly-funded healthcare system. During this time, you’ll need to cover your own healthcare expenses.

Private health insurance for temporary coverage

If you're moving to a province with a waiting period for publicly-funded healthcare, it’s a good idea to purchase private health insurance. Private insurance provides coverage for medical expenses like doctor visits, prescription medications, and emergency care during the waiting period. This ensures peace of mind and prevents out-of-pocket costs that could strain your finances as you settle into your new home.

Your credit score in Canada is like your financial report card. Ranging from 300 to 900, it reflects how responsibly you use credit. A score of 660 or higher is considered good and can help you qualify for better credit cards, loans, and mortgages.

How to maintain a good credit score

• Get a credit card and pay off the balance in full each month.
• Pay on time – late payments can negatively impact your score.
• Keep your credit utilization below 30% of your limit.
• Don’t apply for too much credit in a short time – this can lower your score.

Even if you don’t need to borrow money now, building a strong credit history will pay off when you’re ready to make big purchases, like a car or home.

Also read: How your credit card impacts your credit score

Life in Canada is expensive, and it’s important to have a realistic budget to make sure you can cover the essentials.

Your major expenses in Canada will be housing, food and transportation. Primary health care is publicly funded, but you will also need to budget for extended health expenses like prescription medications, eye care and dental care.

These numbers reflect the average amount Canadian households spend on these key expenses, as of 2021.

Average monthly costs

Budgeting tools like apps or spreadsheets can help you track where your money is going each month and help you set aside money for savings and emergencies.

Canada offers several programs to help you save for the future. All of these registered accounts have some tax advantages and can be used for different purposes. 

Tax-Free Savings Account (TFSA)

The tax-free savings account (TFSA) allows you to save money without having to pay tax on your investment income. While the annual contribution limit can change from year to year, in 2024 the limit was $7,000, and remains the same for 2025. Unused contribution room can be carried over to the next year.

Registered Retirement Savings Plan (RRSP)

The Registered Retirement Savings Plan (RRSP) allows you to defer income tax to retirement. When you contribute to your RRSP, it reduces the amount of income tax you have to pay that year. You will have to pay income tax on the money you withdraw from your RRSP in retirement.

In 2025, people can contribute 18% of their total income into an RRSP, up to a maximum of $32,490. 

Registered Education Savings Plan (RESP)

With the average annual tuition fees in Canada for the 2024/25 academic year hitting $8,514, it’s important to start saving early for your child’s education. Contributing to a Registered Education Savings Plan (RESP) reduces tax on investment income and opens access to government grants.

First Home Savings Account

Another tool to help you save for a first home is the First Home Savings Account (FHSA). You can contribute up to $8,000 per year to a maximum of $40,000 in your lifetime. Contributions may be deductible on your income tax, and you can withdraw money tax-free to buy or build a qualifying home.

Pro tip: Even small, regular contributions can grow significantly over time. Start early and watch your money grow!

Taxes should be filed no later than April 30th, following the previous tax year. You may qualify for one or more programs that will reduce your income tax burden. A few common deductions include:

• GST/HST credit – Depending on your income and family status, you may qualify for a tax credit to offset the cost of sales taxes.
• Canada Workers Benefit – The eligibility limits change depending on where you live, but this refundable tax credit is meant to help Canadian residents who are working and earning a low income.
• Canada Child Benefit – If you have children under 18 years old, you may qualify for a benefit of up to $649 per month. The amount changes based on the number of children you have, and their age.
• Childcare expenses – If you paid a registered provider for childcare, you can deduct that amount on your taxes.
• RRSP contributions – If you contributed to your RRSP, you can deduct that amount on your taxes.

Adjusting to life in Canada comes with challenges, but managing your finances doesn’t have to be one of them. By choosing the right bank account, protecting yourself with temporary health coverage, building your credit score, budgeting wisely, saving, and filing taxes on time, you can set yourself up for financial success. Oh, and don’t forget to treat yourself to that double double once in a while – you’ve earned it!

Also read: 

• Credit card basics
• Chequing account basics
• The best secured credit cards in 2025