When you move to a new country as a permanent resident (PR) or a temporary worker or an international student, having access to your savings is not only essential but also critical. Starting (or restarting) your life in a new place is intertwined with your financial journey, making it important to understand the basics of banking.
Canada’s financial ecosystem is made up of banks, credit unions, trusts, and other financial and insurance companies and it is considered to be one of the most sound and safest in the world. According to the Global Competitiveness Report 2019, published by the World Economic Forum, Canada ranked 9th globally for its financial system, showcasing stability and reliability.
In this article, we will share an overview of the leading banks in Canada, guide you through the process of opening a newcomer account.
What are the largest banks in Canada?
Royal Bank of Canada (RBC)
Bank of Nova Scotia (Scotiabank)
Toronto-Dominion Bank (TD)
Bank of Montreal (BMO)
Canadian Imperial Bank of Commerce (CIBC)
In addition to these banks, there are a couple of digital-only banks, such as Tangerine (a subsidiary of Scotiabank) and Simplii Financial (a subsidiary of CIBC).
You can choose any financial institution of your choice. However, it is helpful to know that the big five banks have newcomer banking packages that specifically cater to permanent residents and international students and are thus better positioned to assist you in your unique situation.
Types of bank accounts for newcomers in Canada
There are two main types of bank accounts in Canada:
- Chequing account: An essential basic account for daily transactions and purchases.
- Savings account: A high-interest account to save money over a longer term.
You can explore other banks as well but do so once you are in the country, apply for your IEC visa first.
Documents required to open a Canadian bank account
- Your passport
- Confirmation of Permanent Residence (CoPR) and/or Social Insurance Number (SIN)
International students will also need:
- Student permit (IMM 1442) or Temporary Resident Visa (TRV)
- Proof of enrollment (optional, good-to-have)
Note: Permitted identification documents may vary by province.
Start building your credit history early on – get a Canadian credit card
Having a credit rating or a credit score is essential for life in Canada. A credit score is a way for financial institutions to measure your ability to repay loans. A good credit score can ensure you qualify for better interest rates on mortgages and other loans down the line. To get started with building your credit history, having and using a credit card is essential.
Credit cards have the convenience of allowing you to pay for things easily, without having to carry cash. Unlike a debit card, a credit card allows you to make purchases first (even if you don’t have the funds on your account) and pay later. It is like having access to a loan from a bank. However, keep in mind that credit cards have limits and do not offer free money. They can carry very high-interest rates, so your balance should be managed and paid down promptly – this will help you maintain a good credit rating. Once you receive your credit card, get started by making payments for small expenses such as phone bills or groceries. This will ensure you gradually build your credit history.