Updated: May 12, 2020
This is a seemingly simple topic but there is so much information out there that in this blog, we will try to declutter and organize the information neatly for you, from a new immigrant's perspective.
What are the types of accounts?
For individuals, there are two main types of accounts - checking and savings.
A checking account is the Canadian equivalent of a 'current account' in India. It does not pay interest and depending on which plan you take, you can do a certain number or an unlimited number of transactions. The account fee is waived under certain circumstances depending on how much balance you maintain in the account. Your debit card will typically be linked to your checking account.
A savings account will pay interest - but given how low interest rates have become, you shouldn't expect much. Many financial institutions will charge you a fee to transfer money to someone else using a savings account, but most will let you do an unlimited number of transactions between your checking and savings accounts.
There are other types of accounts as well, for students and youth. The information is available on the website of the respective financial institution.
What about debit cards?
When you open your bank account, you will get a temporary debit card right away. A permanent one will be delivered via mail. The card can be used online, offline, or at ATMs to deposit and withdraw money.
What about credit cards?
This is a topic that deserves its own blog. But to put it simply, there are two types of credit cards - secured and unsecured.
A secured card requires a deposit with the bank. For example, if you allow the bank to block $500 in your account, that is the limit you will get on your credit card. This is usually the only product available for those people who do not have a credit history in Canada. Of course, exceptions are made based on the policies of the particular financial institution.
An unsecured credit card is like a regular credit card and may come with additional features such as cashback, airline miles, etc. You may be started off with a lower limit, and the bank will review it from time to time.
Be sure to check the fees and interest charges associated with the credit card before you enrol.
Which bank should I go with?
There are a few large banks as well as many credit unions in Canada. We do not recommend one over the other because that is a decision you should take after considering all the options. Many banks have offers for new immigrants and you should compare those as well.
What documents do I need?
You need to present two pieces of identification. The list of acceptable forms of identification will have two parts. In the context of a new immigrant, your primary identification will be your record of landing such as an IMM 1000 or IMM 1442, whether as a permanent or temporary resident. Your secondary identification will be your foreign passport. You can get an exhaustive list here.
How do I transfer funds internationally and domestically?
To bring in money, you have to use a bank in your home country. To send money to your home or any other country, you can either use your bank or certain regulated payment service providers such as Remitly
To send money between accounts in Canada, there is unfortunately no app like PayTM or Venmo. The cheapest way to do it is to use Interac, which is an instant fund transfer service that works with all the major financial institutions. It is a direct account-to-account transfer and you only need to know the recipient's email to send the money.
That's all on this topic, happy banking!
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