A Complete Guide to Canadian Banking for Newcomers

Getting Started with Banking in Canada

Opening a bank account is one of the first things you should do when you arrive in Canada. You will need a bank account to receive your paycheque, pay rent, and manage your daily finances. The Canadian banking system is stable, well-regulated, and offers many options for newcomers.

At WelcomeAide, we help newcomers understand the financial systems they need to navigate in Canada. This guide covers everything from opening your first account to planning for the future with registered savings plans.

Canada's Major Banks

Canada has five major banks, often called the "Big Five." These banks have branches across the country and offer a full range of financial services.

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

In addition to the Big Five, there are smaller banks, credit unions, and online-only banks. Credit unions like Vancity (in BC) and Desjardins (in Quebec) are member-owned and often offer competitive rates and lower fees. Online banks like Tangerine and Simplii Financial offer no-fee banking options.

Types of Bank Accounts

Chequing Accounts

A chequing account is for your everyday banking. You use it to receive your pay, pay bills, make purchases with a debit card, and send money. Most chequing accounts charge a monthly fee, typically $4 to $30 depending on the features included.

Features to look for in a chequing account:

• Number of free transactions per month (debit purchases, bill payments, withdrawals).
• Free Interac e-Transfer (electronic money transfer).
• Access to a large ATM network.
• Online and mobile banking.
• No-fee options for newcomers (many banks waive fees for the first year).

Savings Accounts

A savings account is for money you want to set aside. Interest rates on savings accounts in Canada are typically 0.5% to 5%, with online banks like EQ Bank often offering the highest rates. Some savings accounts have no monthly fees but may charge fees for withdrawals.

Look for a high-interest savings account (HISA) to earn more on your savings. Many online banks offer HISAs with rates of 3% to 5% with no minimum balance.

Opening a Bank Account

You can open a bank account in Canada even before you arrive. Many of the Big Five banks allow newcomers to start the process online from their home country. Once you arrive, you visit a branch to complete the setup.

What You Need

To open a bank account in Canada, you will need two pieces of identification. Acceptable ID includes:

• Passport
• Permanent Resident Card (PR card)
• Confirmation of Permanent Residence (COPR)
• Work permit or study permit
• Canadian driver's licence
• Social Insurance Number (SIN) card or confirmation letter

Under federal regulations, banks must open an account for you if you have at least one piece of acceptable ID, even if you do not yet have a SIN. However, you will need to provide your SIN within a reasonable time for tax reporting purposes.

Interac e-Transfer

Interac e-Transfer is one of the most popular ways to send and receive money in Canada. It allows you to transfer money between bank accounts using just an email address or phone number. Most banks include e-Transfer as a free feature with their chequing accounts.

To send an e-Transfer, you log into your online banking, select the e-Transfer option, enter the recipient's email or phone number, enter the amount, and add a security question (or use Autodeposit). The money is typically available to the recipient within minutes.

You can send up to $3,000 per transaction with most banks, though some banks allow higher limits. There are also daily and weekly limits that vary by institution.

Direct Deposit

Most Canadian employers pay through direct deposit, which means your paycheque goes straight into your bank account. To set up direct deposit, you provide your employer with a void cheque or your banking information (transit number, institution number, and account number). You can find this information in your online banking or by asking your bank.

Government payments, such as the GST/HST credit and the Canada Child Benefit, can also be set up for direct deposit through the Canada Revenue Agency (CRA).

Registered Savings Plans

Canada has several registered savings plans that offer tax advantages. Understanding these plans can help you save for retirement, your children's education, and other goals.

Tax-Free Savings Account (TFSA)

A TFSA allows you to save and invest money without paying tax on the growth. You can contribute up to $7,000 per year (as of 2026), and unused contribution room carries forward. You can withdraw money from your TFSA at any time without paying tax, and the withdrawn amount is added back to your contribution room the following year.

To open a TFSA, you must be a Canadian resident aged 18 or older with a valid SIN. Newcomers start accumulating TFSA contribution room from the year they become a Canadian resident for tax purposes.

Registered Retirement Savings Plan (RRSP)

An RRSP helps you save for retirement. Contributions are tax-deductible, meaning they reduce your taxable income for the year. Your investments grow tax-free inside the RRSP, but you pay tax when you withdraw the money (ideally in retirement, when your income and tax rate are lower).

Your annual RRSP contribution limit is 18% of your previous year's earned income, up to a maximum of $32,490 (for the 2025 tax year). Unused room carries forward. Check your contribution room on your CRA Notice of Assessment or through CRA My Account.

Registered Education Savings Plan (RESP)

If you have children, an RESP is an excellent way to save for their post-secondary education. The government matches your contributions through the Canada Education Savings Grant (CESG), providing 20% on the first $2,500 you contribute each year, up to $500 per year per child.

The lifetime contribution limit per child is $50,000. The maximum lifetime CESG is $7,200 per child. To receive the CESG, your child must have a SIN and be a Canadian resident.

Mortgage Basics for Newcomers

Buying a home in Canada is a major financial decision. As a newcomer, you can qualify for a mortgage, though the requirements may differ from those for established Canadians.

Down Payment Requirements

In Canada, the minimum down payment depends on the purchase price:

• For homes priced at $500,000 or less: 5% down payment.
• For the portion between $500,001 and $1,499,999: 10% down payment on the amount above $500,000.
• For homes priced at $1,500,000 or more: 20% down payment.

If your down payment is less than 20%, you must purchase mortgage default insurance from the Canada Mortgage and Housing Corporation (CMHC), Sagen, or Canada Guaranty. This insurance protects the lender and adds a premium to your mortgage.

Newcomer Mortgage Programs

Many Canadian banks offer mortgage programs specifically for newcomers. These programs may allow you to qualify with a smaller down payment or limited Canadian credit history. Typically, you need to have been in Canada for less than five years and have permanent resident status or a valid work permit.

Some newcomer mortgage programs require a minimum 5% to 10% down payment and may accept international credit history or proof of on-time rent payments as alternatives to a Canadian credit score.

Online and Mobile Banking

Canadian banks offer robust online and mobile banking platforms. Through your bank's app or website, you can:

• Check account balances and transaction history.
• Pay bills (utilities, phone, credit card, rent).
• Send and receive Interac e-Transfers.
• Set up automatic payments and recurring transfers.
• Deposit cheques by taking a photo (mobile cheque deposit).
• Manage your credit card and investments.

Online banking is free with all major Canadian banks. Make sure to set up two-factor authentication for added security.

Protecting Yourself from Banking Fraud

Banking fraud is a concern in Canada, and newcomers can be especially vulnerable because they may not be familiar with common scams. Here are important tips to protect yourself.

• Never share your PIN, passwords, or one-time verification codes with anyone. Your bank will never ask for these.
• Be cautious of phone calls, texts, or emails claiming to be from your bank. If in doubt, hang up and call the number on the back of your debit or credit card.
• Do not click on links in suspicious emails or text messages.
• Use your bank's official app, not third-party apps, for banking.
• Monitor your accounts regularly for unauthorized transactions.
• Report lost or stolen debit and credit cards immediately.

If you are a victim of fraud, contact your bank right away. You can also report fraud to the Canadian Anti-Fraud Centre at 1-888-495-8501.

Banking Fees to Watch For

Canadian banking fees can add up if you are not careful. Here are common fees to be aware of:

• Monthly account fees: $4 to $30 per month. Many banks waive these for newcomers in the first year or if you maintain a minimum balance.
• Excess transaction fees: If you exceed your monthly transaction limit, you may be charged $0.50 to $1.50 per extra transaction.
• ATM fees: Using another bank's ATM can cost $2 to $3 per withdrawal. Stick to your own bank's ATMs.
• International money transfer fees: Sending money abroad through your bank can cost $15 to $50 per transfer. Consider services like Wise (formerly TransferWise) for lower fees.
• Overdraft fees: If your account goes below zero, you may be charged interest and fees. Set up overdraft protection or alerts to avoid this.

How WelcomeAide Can Help

Managing money in a new country can be confusing, especially when the systems are different from what you are used to. WelcomeAide provides free, multilingual information to help newcomers understand Canadian financial systems.

Use our AI chat assistant to ask questions about banking, credit, taxes, and more in your preferred language. Explore our programs, learn about our impact, or read more settlement guides on our blog.

Visit our about page to learn more about how we are helping newcomers build successful lives in Canada. Smart banking habits start on day one, and we are here to help you every step of the way.