The best bank accounts for newcomers to Canada

Best newcomer bank accounts in Canada

Our guide to newcomer bank accounts in Canada

How is a newcomer bank account different from a regular bank account?

Technically, newcomer bank accounts are the same as regular bank accounts that any Canadian can open. However, as a newcomer, you’ll usually enjoy additional offers and perks when you open an account with a bank. These include:

• Waived monthly account fees for your first 1-3 years
• Cash rewards for completing tasks like setting up a pre-authorized debit or direct deposits
• Free global money transfers
• Easy application for a newcomer credit card, even with no Canadian credit history

Make sure to compare a range of offers to find the best bank for you. Some banks allow you to open an account before arriving in Canada, while other financial institutions require you to visit a physical bank branch.

Who are the Big Five (or Big Six) banks of Canada?

In Canada, the Big Five are large national banks that offer a full suite of financial products across all 13 provinces and territories. They include:

• RBC Royal Bank. RBC is headquartered in Toronto and is not only Canada’s largest bank, but one of the biggest in the world. RBC has over 1,200 branches and a network of 4,200 automated teller machines (ATMs).
• TD Bank. Officially called TD Canada Trust, this bank has over 1,000 branches and 2,500 ATMs.
• BMO (Bank of Montreal). BMO operates approximately 900 branches and 2,200 ATMs.
• Scotiabank. The Bank of Nova Scotia, nicknamed Scotiabank, has roughly 900 branches and 3,600 ATMs.
• CIBC (Canadian Imperial Bank of Commerce). Despite its name, CIBC offers a full line of personal banking products. It has over 1,000 branches and close to 3,000 ATMs.
• National Bank is the sixth of Canada’s major banks, forming the “Big Six”. National Bank has 350 branches and 2,800 ATMs across Canada. 

What other banks are there in Canada?

In addition to the big banks above, there are many others to choose from. Many of the alternatives offer advantages like better customer service or lower fees.

Different types of banks you will find in Canada include:

• Digital banks. Digital banks don’t have locations for in-person customer service, but allow you to do all your banking by telephone or online. Some of Canada’s largest digital banks include Tangerine, Simplii and EQ bank.
• Regional banks. Some banks focus on certain regions rather than having a broad presence across the country. Examples include ATB Financial in Alberta and Laurentian Bank in Quebec.
• Credit unions and caisses populaires. Credit unions, also known in French as caisses populaires, are co-operative financial services organizations that usually serve a certain community. Some of Canada’s largest credit unions include Desjardins, VanCity, Meridian and Coast Capital Savings.

What to look for in a newcomer bank account

When selecting a bank account for your life in Canada, there are a few things you will want to keep in mind such as monthly fees, transaction fees, and other features that you may or may not need.

Types of bank account/banking needs

Most Canadians have two different types of accounts: A chequing account for daily banking, and a savings account for saving. Newcomer accounts offered by banks are usually chequing accounts.

Chequing accounts often pay little or no interest, but include free transactions like cash withdrawals and bill payments. Conversely, savings accounts usually do pay at least some interest, but may charge very expensive transaction fees that make them unsuitable for daily spending. More recently, some digital banks have introduced hybrid accounts, which combine the best features of chequing and savings accounts by offering attractive interest rates along with free transactions.

Monthly fees

Bank accounts in Canada often have a monthly fee ranging up to $30 per month. Higher fees are usually associated with more included transactions, more services, and more perks, but that’s not always the case. Several banks offer no-fee chequing accounts that include unlimited free transactions with no monthly fee.

Transaction fees

Most chequing accounts include a certain number of free transactions such as bill payments, ATM withdrawals, transfers to other accounts, and Interac e-Transfers. Over that limit, fees range from $1 to $5 per transaction depending on the bank and account. Some other transactions, such as international money transfers and bank drafts, are usually not included free regardless of the account.

Access (ATM/digital)

It’s important to be able to bank the way you want to, and not all banks in Canada offer the same access to services. When choosing a bank account, consider whether it comes with access to:

• Branches for in-person customer service. Many banks offer a network of branches you can go to for in-person customer service. Be aware that there may be a fee for teller assisted transactions, even if you have an account with the bank.
• ATMs for cash withdrawals. Most banks offer free access to a network of ATMs you can use to take out money and perform certain other transactions. Some banks charge an additional fee for using an out-of-network ATM that’s on top of any fee charged by the ATM itself.
• Telephone banking. Most banks offer free telephone banking that allows you to make transactions over the telephone. Some banks make it easier to speak to a human than others — some even offer phone support in other languages besides English and French, which can be helpful if English isn’t your first language.
• Online banking. In Canada, most banks offer an online banking portal that makes it easy to conduct most of your daily banking. 
• Mobile banking. Many Canadian banks offer mobile apps that let you bank using your smartphone, and most even let you deposit a cheque by taking a picture. 

Interest Rates

Most chequing accounts don’t pay any interest, but most banks do offer interest-bearing savings accounts and other investment products like guaranteed investment certificates (GICs). Be aware that having a chequing account with a bank doesn’t usually entitle you to preferential rates for borrowing, and it’s best to shop around for the best rate when looking for a mortgage, car loan or credit card.

Also read: Financial tips for newcomers to Canada

Credit cards

As a newcomer to Canada, you may be eligible to get a credit card without having any Canadian credit history. This is an important way to establish credit which will unlock the ability to get more and better credit cards, as well as loans for larger purchases like a car or home. There are hundreds of credit cards that offer different rewards and perks, so be sure to compare credit cards online to find the right one for you.