Picking a bank and opening an account is one of the first things you need to do as a Newcomer to Canada.
Luckily, all the big banks in Canada have a Newcomer Account package with everything you need to take care of your banking needs.
We’ve compared their features and some of the things to consider before you choose one.
Am I Eligible for a Newcomer Account?
In general, you are eligible to open an account with any of the top 5 banks as a Newcomer if you’ve been living in Canada for less than 5 years (3 years for ScotiaBank).
Other conditions may apply, for example you can’t open a Newcomer account if you have an existing account with the bank. Check the links below for the eligibility criteria for each of the banks.
BEST BANK ACCOUNTS FOR NEWCOMERS
Here is a quick summary of the bank account for Newcomers from the Big Banks in Canada for Newcomers.
|Bank||Eligibility Period||No Minimum Balance/Monthly Fee||Offer Period||Free day-to-day Transactions||Credit Card|
|TD Bank||5||Yes||6 months||Yes||Yes|
|National Bank||5||Yes||up to 3 years||Yes||Yes|
1. BMO NewStart Program
The BMO NewStart program can be opened before you land in Canada or within 5 years of becoming a permanent resident.
Some of the key features of the account includes:
- No monthly fees during the 12 months offer period ($15.95/months afterwards)
- Free unlimited transactions and Interac e-transfers
- No annual fee Credit Card through the BMO CashBack MasterCard
- Free Safety Deposit Box for the first year ($55 value)
Limited Time Offer: Get $300 when you open a chequing account, make a deposit by May 31, 2021; and carry out any 2 of the following: set up a recurring direct deposit, make a bill payment or set up a pre-authorized payment by July 31, 2021.
For international students, the bank also has free banking during school and for the 12 months period after graduation.
2. CIBC Welcome to Canada Banking Package
CIBC offers free everyday banking for Newcomers to Canada through its CIBC Smart Account for Newcomers. You get the following and more by opening an account with the bank:
- Monthly fees waived for the first 12 months
- Free unlimited transactions and Interac e-transfers
- No annual fee credit cards or one-year rebates on selected credit cards
- $60 cash back on a safety deposit box
Limited Time Offer: Open a new account and setup 2 of the following 3: a recurring deposit, 2 recurring pre-authorized deposits or 2 online bill payments of $50 or more each. Offer ends on July 29, 2021.
Newcomers can also get a car loan or mortgage without a credit history.
3. RBC Newcomer Advantage
RBC is Canada’s largest bank, with the largest combined branch and ATM network. With the RBC Newcomer Advantage, Newcomers enjoy everything they need for their financial start in Canada.
Permanent residents, International students and foreign works can open an account under the program.
These are some of the benefits you get when you open an account:
- No monthly account fees for 12 months
- Unlimited Interac transfers
- Two no-fee international money transfers per month for your first 12 months on select accounts
- No annual-fee credit card with no credit check
- Car loan and mortgage with no Canadian credit history
- Offers and services from selected partners, for example Telus and Petro-Canada
Limited Time Offer: Get a free Apple AirPods with charging if you open a new RBC No Limit Banking account and complete at least 2 of the qualifying criteria by July 15, 2021. The criteria are: 2 pre-authorized payments, one recurring payroll deposit and 2 bill payments.
4. ScotiaBank StartRight Program
The StartRight Program helps Newcomers start banking in Canada by offering savings, credit, international money transfers, loans, and access to Financial Advisors.
The following benefits are available to you when you open the Preferred Package account.
- No monthly account fees for 12 months ($0 after the first year if you maintain a balance of $4,000, $16.95/month otherwise)
- Unlimited no-fee international money transfers
- Unlimited Interac e-transfers
- Free Safety box for one year ($60 afterwards)
- No annual fee credit cards (up to $5,000 limit) or waived on selected cards with fees.
- Specialized mortgage and new vehicle loan (with only 10% down)
- Free credit check through TransUnion.
It is available for Permanent Residents or Foreign workers with work permits that have been in Canada for less than 3 years.
5. TD New to Canada Banking
TD Bank is Canada’s second largest bank. Unlike the other top 5 banks, only Newcomers that have been in Canada for less than 3 years are eligible for the program.
You can open either the TD Unlimited Chequing Account or TD Minimum Chequing Account (12 debit transactions per month, $3.95/month after 6 months)
With TD Unlimited Account, you get:
- No monthly account fees for 6 months ($16.95 afterwards, or $0 with a minimum balance of $4,000)
- Unlimited transactions and free Interac transfers
- Fee rebate on select credit cards
- Special limited cash offers
Special Offer: Get $150 when you open a TD Unlimited Chequing Account and complete any 2 of the following within 6 months: online bill payments of at least $50, recurring deposit from your employer/government or recurring pre-authorized deposit of at least $50.
6. National Bank Newcomers Account
With National Bank’s Newcomers Account, you can enjoy up to 3 years of no monthly fee banking.
The monthly fee of $14.95 is waived for the first 12 months, then discounted for the second and third years or free (if you sign up for selected products like getting a credit card, switching to online statements, setting up your payroll or online payments etc.)
Other benefits include:
- Free Small safety deposit box ($55/year after the first year)
- First order of cheques for free
7. HSBC Newcomers Program
The requirements are high compared to the Top 5 banks. For example, you need to deposit a minimum of $5,000 within 30 days for the Advance Welcome Offer, or $25,000 for the Premier Welcome Offer.
And given that its branch and ATM network is not as expansive as the other big banks, it may not be for everyone.
To qualify for the HSBC Canada Newcomers Program, you must have been living in Canada for less than 5 years.
Some of the benefits you could get include:
- No monthly fees for 12 months
- Up to $1,000 in welcome bonus, payable after 6 months
- Up to $5,000 in credit limit with no Canadian credit history
- Free wire transfers, up to $10,000
Things to Consider Before Choosing a Newcomers Account
The features of the accounts offered by the top 5 banks are quite similar, so you can’t go wrong with choosing any of them.
However, there are a few factors you should consider before choosing:
All the big banks have an extensive network of branches and ATMs across all the provinces and territories.
When you first land, you should choose a bank with a branch near you. This way, you’ll be able to easily access the branch if you ever need to carry out an in-branch transaction.
All the banks have a branch locator on their websites. Alternatively, you can check for banks near you through Google Maps.
Monthly Fees and Transaction Fees after the Offer Period
It is important to consider how much you’ll pay to operate the account after the offer period. This varies across the top banks.
You may get some rebates on the monthly fees if you keep a minimum balance, for example with TD Bank or ScotiaBank, or by signing up for other products and services offered by the banks.
The type of transactions you do may also be a factor. Most day-to-day banking transactions should be free but there could be fees for other transactions like getting a bank draft or using international money transfers.
While this may not be a deal breaker when you’re just opening the account, it is something you’ll need to consider later.
Interest Rate on the Accounts
In general, you won’t get attractive interest rates on your funds at the big banks. Online banks and credit unions will pay higher rates on your savings, and some even pay an interest on your chequing account.
But you may not want to open your first bank account at an online bank. Your first and primary account should be at a bank with a physical branch close to you. Also, you may not be able to get a credit card with limited Canadian credit history at an online bank.
Nevertheless, online banks are a good option for your secondary account and to earn higher interest.
Some of the best online banks in Canada are:
- EQ Bank (division of Equitable Bank)
- Tangerine (owned by ScotiaBank)
- Simplii Financial (a division of CIBC)
Read More: Best High Interest Savings Accounts
Other Things to Consider or Know About Opening a Bank Account in Canada
What are the documents required for account opening?
The good news is you don’t need a job to open a bank account. However, you must provide 2 means of identification, including a government-issued identification to open a bank account.
Some of the accepted documents include:
- a Permanent Resident card or Confirmation of Permanent Residence
- Work permit
- Government photo ID such as your foreign passport or Canadian driver’s licence (one or two IDs in addition to one of the residency documents above)
Are my funds secure?
Canadian Banks are some of the soundest financial institutions in the world. Not withstanding, all the top 5 banks are members of the Canada Deposit Insurance Corporation, CDIC so your deposits are protected.
In general, all deposit taking financial institutions in Canada are covered by either CDIC (if regulated federally) or the provincial deposit insurer.
- CDIC : Understanding How Deposit Insurance Works In Canada
- How To Maximize CDIC Coverage On Your Savings
What is Interac e-Transfer?
The Interac e-transfer service lets you send and receive money from people in Canada through email or text message. Transfers can be secured by adding a Security Question and Answer. The recipient must provide the correct answer to receive the money into their own account.
Once you have a Canadian bank account, you can use the service.
Check our Guide to Interac e-Transfer for more information about how to start ending and receiving money using Interac.
Related Post: Interac E-Transfer Limit: How Much Can I Send?
What is the difference between a Chequing and Savings account?
Chequing accounts are meant for day-to-day transactions like transfers, receiving salaries etc. In general, Banks won’t pay an interest on the balance.
A savings account, on the other hand, can be used for both short- and long-term savings and the balances will earn some interest.
There could be restrictions on the type of transactions you’re allowed to do in the account, for example you may not be able to transfer to a third-party account or pay bills from it.
How do you build a credit history in Canada?
The two major credit reporting agencies in Canada are Equifax and TransUnion. To start building your Canadian credit history, do the following:
- Get a credit card from your bank and use it regularly
- Pay your bills on time always
- If possible, pay off your balance in the full to avoid the high interest rate on credit cards
- Limit the number of credits you apply for.
- Check your credit score and credit report periodically.
Learn more about how credit scores work in Canada through the linked posts below:
- How Credit Scores Are Calculated and How To Interpret Them
- 7 Surefire Ways to Improve your Credit Score fast!
- How to get your credit score and credit report for Free in Canada (in minutes)
As mentioned above, you really can’t go wrong with any of the account offerings from the top Canadian banks.
Some of the banks may have limited time promotions offered periodically. So it’s best to always check and compare the different accounts before committing to one.
Check here for the best personal finances apps and services for Canadians.