Banking-Canada

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Banks

The main "highstreet" banks in Canada are, in no particular order:

  • Bank of Montreal (BMO)
  • Bank of Nova Scotia (Scotiabank)
  • Canadian Imperial Bank of Commerce (CIBC)
  • National Bank of Canada
  • Royal Bank of Canada (RBC)
  • Toronto-Dominion Bank (TD CanadaTrust)

All the main banks have newcomer accounts, mostly free of charges for 6-12 months.

http://www.rbc.com/newcomers/

http://www.scotiabank.com/ca/en/0,,2468,00.html

https://www.tdcanadatrust.com/planning/life-events/new-to-canada/index.jsp

https://www.cibc.com/ca/chequing-savings/newcomers.html

http://www.bmo.com/newstart/en/


HSBC is also worthy of note, as it's a relatively large bank in Canada, especially in the West, and offers the convenience for some customers of being able to open an account while still in the UK (albeit with some strings).

Also worth considering are local credit unions...think of them as building societies...you become a member rather than a client. They offer the services of the banks, but with a more local friendly flavour. Some also offer fee-free daily banking. Their limitation is a branch and ATM network that can be very limited, especially outside their geographic focus.

ING Direct offers fee-free savings accounts at competitive interest rates, as well as other financial services, such as insurance and mortgages.

With the increased competition from the likes of ING, banks such as HSBC & Royal Bank are offering higher interest E-savings accounts to customers. Transactions for these accounts can only be done online, though.

Types of accounts

In general, banking in Canada is considered by most British expats to be rather antiquated and costs money, as you pay a monthly fee for most accounts.

A regular day to day transaction "current" account is referred to in Canada as a chequeing (checking) account.

Interest in a chequeing account will be very low, so most people operate savings accounts in parallel. You can also buy guaranteed investment certificates (GICs) from your bank. These offer higher rates of interest than savings accounts but your money is tied up for the term of the certificate.

In general, savings interest rates in Canada are lower than the equivalent rates in the UK.

Many canadians prefer to save money in mutual funds instead, often tax sheltered in their Registered Retirement Savings Plan (RRSP).

Cheques

When you open a bank account in Canada, you'll probably be asked whether or not you want cheques.

If you rarely / never used cheques in the UK, you may be inclined to answer, "No thanks."

Some people find that they use cheques in Canada more than they did in Britain, so an initial chequebook can be helpful.

You may need to present a 'void cheque' when arranging for your salary to be paid (as they seem less willing to just be told a bank account number). If this is required, you can either request one in-branch, or likely print a void cheque off your online banking.

Choosing a bank

Financial Consumer Agency of Canada provides an interactive tool that helps you to select a bank. You complete a questionnaire about the types of banking services you use, and it gives you a list of banks that would be the best fit. Tool link: https://itools-ioutils.fcac-acfc.gc.ca/ACT-OCC/SearchFilter-eng.aspx?lang=eng

Rate Supermarket is a similar tool for comparing accounts across different banks. See here: Rate Supermarket.

Several forum members have stated that, while Canadian banks are "behind" UK banks in terms of technology, they actually enjoy the old fashioned, one-on-one contact with the staff at their Canadian banks.

Several forum members have made favourable remarks about RBC.

But, with that having been said, many forum members have complained about mistakes that all the "highstreet" banks in Canada have made at one time or another.

Opening account from UK

HSBC permits you to open an account while you're still in the UK and before you've moved to Canada.

The following banks permit you to open an account before you have moved to Canada, but do not allow you to "activate" it until you get to Canada:

  • BMO
  • CIBC
  • RBC
  • Scotia

Please note that these banks do not require you to be a permanent resident of Canada in order to open an account.

Online banking

Canada heavily uses online banking, and adopted mobile payments and chip cards long before they were common in the UK. "Interac e-transfer" involves telling your bank account the email address or phone number to send the money to, along with a security question and answer. The recipient will answer the question, and if accurate, the money will be deposited in an account they nominate.

All major banks will have phone apps, allowing you to do your banking on-screen with fingerprint security.

Due to the early development of Interac e-transfer, Canada less heavily uses systems like Visa debit - you may be offered one by your bank, but you may only have a 'cash card' that can be used only to get money out of ATMs, and to pay in person at a card reader. You may be able to request a "virtual visa" which can only be used as an online debit card, or you may find that Interac or credit card are the best ways to make online purchases.

Debit restrictions

Due to the early development of Interac e-transfer, Canada makes less heavy use of debit cards than the UK, and they distinguish more firmly between them. "We accept credit cards" on a website means specifically that (not debit unless that is also present), and "Debit or credit?" at a store is an actual question, not just "are you using a card?". The two systems are different, and the cashier or you may have to select the right option in order for it to work. Some institutions like parking metres may not accept a debit card at all. Hotels and car rentals may accept a debit card (especially if it's foreign with a visa symbol), but may request a credit card, and may insist on a large 'hold' being placed on the debit card so they can bill out of that as they would a credit card if you eg trash a room or crash a car.


Maintaining account in UK

Some members of the BE forum have reported that they've experienced challenges in opening UK bank accounts upon returning to the UK (if they'd closed all their UK bank accounts upon leaving the UK).

Even if you do not intend to return to the UK, it would be worth your while to read the discussion thread entitled Keep UK bank account open! before shutting down all your UK bank accounts.


Related Information

Financial Consumer Agency of Canada

Children's Bank Accounts