Best bank for newcomers to Canada

Banking in Canada is different – so picking the best bank for newcomers to Canada can be confusing.

When we first arrived in Canada I was pretty confused about how everyday banking worked – there were a lot of Canada specifics that born-and-bred Canadians take as common knowledge.

So having been through the learning curve and remembering everything I was confused about when I arrived, I’ve put together this complete guide to banking in Canada.  

I’ll explain the basics of how banking works in Canada, give you our suggestions for the best bank for newcomers to Canada in 2024 and talk you through the process of how to open a new bank account.

Banks in Canada

Big 5 banks

As with a lot of consumer services in Canada, when it comes to banking you have your big, legacy, established entities – known as the the Big 5 banks.

The Big 5 banks very much dominate the banking landscape in Canada.

The Big 5 banks are:

• Scotiabank
• TD Canada Trust
• CIBC (Canadian Imperial Bank of Commerce)
• Royal Bank of Canada (RBC)
• Bank of Montreal (BMO)

Challenger banks

There are a few, but growing, number of new challenger banks coming along trying to disrupt the market norms.

The challenger banks are mostly online-only banking options and have appeared comparatively recently. The main players in this space are:

• Tangerine
• EQ Bank
• Simplii Financial
• Motusbank

Canada also has a bunch of what they call Credit Unions (there’s an explanation of what that means in ‘The Basics’, below) which offer broadly similar services to banks.

Banking in Canada basics

Banking in Canada isn’t free

Firstly, and most gratingly, in Canada the norm is that you pay for your everyday banking account.

This was an unwelcome surprise and something that really does not sit well with me – paying someone to keep hold of my money is just not right!

Most accounts charge a monthly fee which is waived if your closing balance is over a certain amount every day for that month. But the closing balance requirement is not insubstantial, for most it’s in the thousands of dollars range, which to me seems crazy, why would I want $4000 sitting in my chequing account?

But the good news is there are other ways to avoid paying this fee, in particular, the monthly fees are waived in all of the best bank for newcomers to Canada accounts I recommend below for between 6 – 12 months.

The cost of banking is not just restricted to monthly fees, there are various other routes that banks can charge you through. I’ll cover these in “Chequing account transactions and fees” below so keep an eye on them when deciding which bank to go with. Otherwise you can end up paying significantly more than the monthly fee just for using your bank account normally.

Advanced but not

Canada seems to be pretty well set up for the cashless consumer. Visa, Mastercard and American Express are all widely accepted (American Express less so). In most places you can pay by card with no minimum spend and they use chip and PIN.

The contactless limit (i.e. you don’t need to enter your PIN) varies a little by card network but is in the region of $100 to $250.

Whilst cashless transactions are pretty far forward, others aspects of day-to-day banking are not. Here’s a couple of examples:

Cheques, bankers drafts and void cheques are all in common usage.

Managing the bulk of your banking affairs through online banking isn’t as seamless as you might be used to… a lot of stuff still happens in branches.

And many bank accounts don’t allow an unlimited number of transactions in the month for free.

What is a chequing account?

A chequing account is an everyday bank account in Canada. In the USA it’s called a checking account.

A chequing account is where you manage your day to day transactions from. It’s where you’ll likely have your salary paid into, pay bills from, withdraw money from an ATM, that kind of thing.

This is what separates it from a savings account. A chequing account is for day to day financial transactions, a savings account is to build up a pot of money for future use.

Chequing account transactions and fees

Most chequing account offerings talk about how many free transactions are included each month.

A transaction is basically anytime the amount of money in your account changes, for example: paying for something with your debit card, a utility bill being paid from your chequing account, transferring money to another person and so on.

Surprisingly, a lot of the banks don’t offer unlimited transactions for free. Beyond a certain number you’re charged per transaction.

So watch out for this; given it’s your everyday bank account it’s likely you will have quite a few transactions every month. It’s therefore important to choose an account that allows unlimited free transactions.

Look out for the transaction limits criteria in the best bank accounts for newcomers to Canada section below.

What is Interac?

Interac is the Canadian debit card system – the Canadian equivalent of Visa Debit. If you pay with your debit card in a shop it will be through the Interac network. In shops they’ll ask how you’re paying, credit or debit, because each goes through a separate system.

What is Interac e-Transfer?

Interac e-Transfer is online bank transfers – i.e. sending money to someone from your online banking. It’s a bit odd in that it uses your email address as the unique identifier – so you link your email address to your bank account and send and receive money with others using that (not your account number). When you make a transfer you set a security question and answer. For the recipient to get the funds deposited in their bank account, they have to answer the question correctly.

What is Routing Number and Account Number?

Bank accounts in Canada are identified by three sets of numbers: an Institution Number, a Branch Number or Transit Number, and an Account Number.

The Institution number is a three digit number used to identify the financial institution – for example Bank of Montreal is 001.

The Branch Number or Transit Number is a five digit number that identifies your branch at that financial institution.

The Transit Number and the Institution Number together make up the Routing Number.

Confusingly people also refer to Transit Number to mean the combination of the three-digit Institution Number and the five-digit Branch Number.

The Account Number is normally a seven to 12 digit number to identify your particular account.

What is online bill payment / pre-authorized bill payment?

Online bill payments and pre-authorized bill payments/debits are the terms for paying a company – paying your utility bills or anything like that. Pre-authorised bill payments/debits is the term for when you allow the organization you want to pay, like the utility firm, to debit your account however much is required at whatever frequency without you having to do anything. Note that this whole system is different to Interac e-Transfer which is used for person-person transfers. You can’t use online bill payments to pay a person using account number.

What is direct deposit?

Direct deposit is the term for payments made electronically into your account such as your employment salary being automatically deposited into your account.

What is a bank draft?

A Bank Draft is similar to a cheque but one where the funds are guaranteed by your bank – so it gives the payee assurance that they will get their money. To get a Bank Draft, you go to your bank branch, ask them to prepare a Bank Draft for however much, they print out the Bank Draft and likely charge you an admin fee (back to banking not being free in Canada!) and then you can use it to pay whoever. Bank Drafts are commonly used when you’re paying large sums of money – we needed to give our landlord a Bank Draft for one month’s rent to secure the house we wanted.

What is a cheque?

A cheque (or check in American English) is a piece of paper you complete to pay an individual or organization a sum of money. So when you write a cheque, you are agreeing to pay another individual or organization money. The person receiving a cheque gives it to their bank who process it and deposit the money into their account. Again, you may or may not need to pay for cheques from your bank.

What is a void cheque?

A void cheque is a cheque with “VOID” written across it that you can give to someone so they can see your account details to set up direct deposits. You will likely need a void cheque to provide to your employer so they can set up paying your salary into your account. You can either take one of your regular cheques and write “VOID” across it or print a void cheque from your internet banking (or get one from your branch).

ATMs in Canada

There is a wide network of ATMs in Canada where you can withdraw cash from your bank account. Each of the big banks have their own ATMs and normally you can withdraw cash from your own bank’s ATMs for free. You can withdraw money from other bank’s ATMs but you will likely be charged a fee by your bank. Some accounts offer a certain number of free withdrawals from other’s ATMs every month. There’s also some privately owned ATMs at which the ATM owner will charge you a fee as well as your own bank – best avoided obviously.

Credit Unions in Canada

Credit Unions are the alternative to banks, but for everyday customers, provide pretty much the same range of products and services as banks. The difference stems in their structure and mandate. Banks are publicly traded and exist to make money for their shareholders, credit unions are owned by their members (people who have money in them) and have a mandate to benefit their customers (and their community). Credit unions are non-profit so any money they earn is reinvested into the business.

Best way to transfer money to Canada

When we were getting ready to move to Canada I did a lot of research about the best and cheapest way to transfer money internationally so that we could move money from our home bank account in the UK to our new Canadian one.

I’ve written a whole article on how to make sure you’re getting the best deal when you need to transfer money internationally.

But if you just want the summary, the method that we use most often is a service called Wise (which used to be called TransferWise).

I’d actually started using Wise before we moved to Canada when I was going on vacation as an easy and cheap way of spending overseas. So when we had to transfer a big chunk of cash to Canada, Wise saved us a ton of money. In my experience it’s cheaper than all the traditional methods of international transfers and easy to use – I use it surprisingly frequently!

You can check Wise out here if you want to.

All of the products and services I recommend on Canada for Newbies are independently selected based upon what I’ve personally found to be useful. When you sign up to use Wise using the link above I might earn a small affiliate commission. It won’t cost you anything at all and I would never recommend something I don’t believe in and use myself.

Best bank for newcomers to Canada criteria

The key features that we’ve based our recommendations on for the best bank for newcomers to Canada are:

• The account has to be free – i.e. no monthly fees and no unreasonable restrictions on number of transactions.
• It has to be quick and easy to setup.
• The account needs to come with a guarantee of you getting a credit card.

As a newcomer it’s crucial that you build up your credit rating in Canada and having a credit card is a great way of doing this.

Having a Canadian credit history is important for all sorts of things like getting a mobile phone contract (read our pick of the best here), getting a loan or a car lease and even renting a home.

So the quicker you can start building a credit history the better.

The best way to do this is to look for a bank account that guarantees a credit card as part of opening a chequing account as it’s unlikely that other financial institutions will give you a credit card without a credit history.  

You’ll also want to actively manage your credit rating. The best way to do this is to use a service that tracks your credit score and gives you access to your credit report. We use a free service called ClearScore to do this.

All of the best banks for newcomers to Canada recommended below include a credit card.

You can read our full review of the best credit cards for newcomers to Canada here – often the best credit card can be the differentiator in what the best bank account to go with is.

Best bank for newcomers to Canada

The best banks for newcomers to Canada are:

• Bank of Montreal (BMO)
• CIBC
• National Bank
• TD Canada Trust
• Royal Bank of Canada (RBC)
• ScotiaBank

Each of these banks have a program or package in 2024 specifically geared towards newcomers and we’ve laid out the details of each package below.

They all meet the best bank for newcomers to Canada criteria set out above.

We suggest going with one of these options when you first arrive in Canada because it is handy having the option to go into a branch to speak to someone and get help when you’re new to everything.

It’s worth pointing out that National Bank offers a compelling newcomer package with a good saving of three years no-fee, but their branch network is not as extensive as the Big 5 banks. Most of their branches are in Quebec, eastern Ontario and the bigger cities throughout Canada.

Once you’re more settled and the fee-waiver period ends you could consider moving to one of the challenger, online-only, banks which offer no monthly fee accounts.

There are of course more options than what I’ve listed here so if you have specific requirements then you should shop around.

For example if you currently bank with HSBC you might want to consider them. Although the don’t have a branch network in Canada they do offer Canadian accounts and have the benefit of allowing you to open your account before you arrive.

BMO NewStart Program

Eligibility: Permanent resident or foreign worker who arrived in Canada within the last 5 years
Fee: No monthly fees for one year
Electronic transaction limits: Unlimited
Credit card: Yes, range of cards available to newcomers opening a bank account
Welcome offers: $600 cash offer if you open and make a deposit to an eligible chequing account. Plus get an extra $50 if you add a family member on a family bundle. You must complete two of the following to get the $600: set up a recurring direct deposit, make two different bill payments online of at least $50, or two different pre-authorized debits of at least $50 from two different billers.
More details

CIBC Welcome to Canada Package

Eligibility: Received landed immigrant status in the last 5 years
Fees: No monthly fees for two years
Electronic transaction limits: Unlimited
Credit card: Yes, range of cards available to newcomers opening a bank account
Welcome offers: $350 cash offer if you set up at least one direct deposit and do one of the following: 2 ongoing pre-authorised debits, 2 Visa debits, 2 online bill payments of atleast $50. Get an extra $50 on top of that if you transfer $200 from your chequing account into your new or existing CIBC eAdvantage® Savings Account.

National Bank Newcomers

Eligibility: All newcomers who arrived in Canada within the last 5 years.
Fee: No monthly fee for up to three years (conditions apply)
Electronic transaction limits: Unlimited
Credit card: Yes, range of cards available to newcomers opening a bank account
Welcome offers: No upfront welcome offers. But you do make a good saving from the no monthly fee for three years – that’s the longest of all the banks here..
More details

TD New to Canada

Eligibility: Permanent Resident or Temporary Resident of Canada for 5 years or less
Fee: No monthly fees for one year
ElectronictTransaction limits: Unlimited
Credit card: Yes, range of cards available to newcomers opening a bank account
Welcome offers: $300 Amazon gist card if you do two of the following: set up a recurring Direct Deposit, set up recurring pre-authorized debit payment of at least $50, pay a Canadian bill of at least $50 online or on the App. Plus if you open a chequing account, a savings account and get an eligible credit card, you get one year Amazon Prime membership.

RBC Newcomer Advantage

Eligibility: Newcomers and international students to Canada who arrived within the last 5 years for non-credit card accounts (12 months for credit cards)
Fees: No monthly fees for one year for some accounts
Electronic transaction limits: Unlimited
Credit card: Yes, range of cards available to newcomers opening a bank account
Welcome offers: Currently no significant perks for opening an account

ScotiaBank StartRight Program

Eligibility: Canadian Permanent residents from 0–3 years in Canada, International Students and Foreign Workers
Fees: No monthly fees for one year
Electronic transaction limits: Unlimited
Credit card: Yes, range of cards available to newcomers opening a bank account
Welcome offers: Currently no significant perks for opening an account. But you do earn SCENE® (or Scotia Rewards program) points for all transactions.

What best bank for newcomers to Canada we went with and why

Honestly I think all the banks mentioned above are fairly similar in terms of the actual product, so I suggest you go with the bank that gives you the best welcome bonus. Right now BMO has a great cash welcome bonus so would be my clear choice.

The thing that could really also sway what the best bank for newcomers to Canada is is which offers the best credit when you open a newcomer chequing account. If you’re planning on using a credit card (which you definitely should) the cashback or rewards you get from the credit card could be the thing that makes the chequing account worth getting.

You can read more about newcomer credit cards and our recommendations in this article.

For the record the bank we went with when we arrived in Canada as the best bank for newcomers to Canada was the Scotiabank StartRight® program.

But honestly I don’t think I wouldn’t make the same decision now given that they are not offering any welcome offers.

How to open a new bank account in Canada

If you’ve decided on the best bank for you (see above ;-)), it’s time to get on with opening it.

So how do you open a new bank account in Canada?

Under Canadian law you have the right to open a personal bank account at any bank even if you don’t have a job and don’t have any money to put in the account. If you have proper ID it’s all you’ll need.

Here’s how to open a new bank account in Canada:

• Contact the bank you’ve decided to go with before you arrive in Canada. We called our chosen bank a couple of weeks before flying and arranged an appointment for the day after we landed. You’ll be able to choose a branch that’s close to where you’re going to be staying.
• Once you’re in Canada, head along to the branch for your appointment. The bank will let you know what documents you need to open the account, but generally it’s your passport, your Confirmation of Permanent Residency document (or other immigration document) and your Social Insurance Number.
• That’s all you need to open a basic bank account, but if you’re planning on applying for a credit card too (which we definitely suggest you do to build up your credit history) then you might need a letter from your employer. For example, with Scotiabank, if you’re a Permanent Resident you won’t need a letter from your employer but if you’re on a work permit you will.
• They’ll open the bank account for you right there in the branch, tell you how to get up and running with online banking and give you all the information you need including your new bank card.

That’s it – you are done!… In terms of getting established in Canada, this is one of the more straightforward processes – once you’ve decided who to go with it really is no sweat on this one!

* All of the products and services I recommend on Canada for Newbies are independently selected based upon what I’ve found to be useful. If you sign up to one of the services using the links in the article, I might earn a small affiliate commission. Rest assured it won’t cost you anything and I would never recommend something I don’t believe in or use myself.

So that’s my overview of the best bank for newcomers to Canada in 2024. I hope you’ve found it helpful. Please drop me a comment below with anything – anything I’ve missed or recommendations you have yourself!