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Financial first steps: learn about banking in Canada to build a solid foundation and achieve your financial goals

Banking in Canada might be different than your home country. Here's what you need to know.

Moving to Canada means learning a lot quickly about your new country. You have to learn how to rent or purchase a home to live in, navigate a different culture — and also discover the best place in your new neighbourhood to get coffee in the morning.

Another key thing you'll have to learn about is Canada's banking system. Thankfully banking in Canada is easier to figure out than which barista in your city brews the best cappuccino. Here's a primer on everything you need to know about Canadian banking.

The security of Canadian banks

An important thing to know about the Canadian banking system is that it's secure. Banks are heavily regulated in Canada and most deposits are insured up to $100,000 for each account by the Canadian Deposit Insurance Corporation (CDIC). Canada also has federal lending rules to ensure that banks can't lend you more than you can afford for things like a mortgage.

Bank services

Chequing accounts

A chequing account is a bank account designed for frequent transactions and everyday use. Need an account to pay your mortgage or rent from? What about an account used for receiving direct deposit paycheques from your employer or to set up recurring payments from? A chequing account will do all that for you.

Chequing accounts in Canada sometimes have monthly account fees or per transaction fees but banks often waive the monthly account fees if you keep a minimum balance or give you a certain number of transactions for free for your monthly account fee. Some accounts even offer unlimited monthly transactions. Choose an account that fits your financial needs and lifestyle.

Savings accounts

A savings account in Canada is a bank account where you hold money that you don't intend to use for a while. Are you holding money as an emergency fund? Do you want to buy a car in a few months and need somewhere to save that cash as it grows? A savings account is perfect for that. There are usually no fees associated with the accounts.

Savings accounts also tend to pay more in interest on your money that you would have when putting your money in a chequing account.

Registered Retirement Savings Plans (RRSP)

An RRSP is a tax incentivized retirement savings vehicle. When you work in Canada, you earn what's known as RRSP contribution room based on your salary and federal RRSP guidelines. When you put money into your RRSP, you get the taxes you paid on that income back since an RRSP is a 'before tax' investment vehicle.

Once in your account, your money can grow tax-free until you retire, at which point, you will have to pay taxes on the funds you take out. RRSPs can be used to invest in a variety of types of investments including Guaranteed Investment Certificates (GICs), mutual funds, or even securities through a self-directed or professionally managed brokerage account. One thing you need to be aware of is with RRSPs, once your money is in them you will likely need to pay penalties if you take your money out before you retire except in special circumstances like when buying your first home.

Tax Free Savings Account (TFSA)

Canada also has a savings vehicle that's after tax and has more flexibility. With a TFSA, you put money into your account after you pay taxes on it and it grows tax free. However, when you take the funds out of your TFSA, you do not have to pay taxes on it and you can take your money out at any time without any penalties.

With a TFSA, everyone is allowed to put in the maximum annual amount declared in advance by the federal government. For example, in 2022, the maximum amount is $6,000, but in other years it has been as much as $10,000. Can't make a contribution one year? Don't worry. Your contribution room accumulates year over year so that you can use it in the future.

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Ways to bank

In branch

Most Canadian banks have a vast network of branches you can go into and help with everything from opening an account to applying for a mortgage to depositing a cheque, taking out cash or converting money into another currency.


Most banks also have a network of ATMs that you can use to make payments, deposit cheques, or take out money. Your bank's website or app should be able to tell you where their nearest ATM is no matter where you are in Canada. You can also use another bank's ATM or an independent ATM to take out money, but you will likely have to pay a fee to do so.

Interac debit cards

Debit cards are a convenient way to pay for things with money from your bank account. They're similar to a credit card except the money comes directly out of your bank account. Canadian debit cards often have chips and require personal identification numbers (PINs) to verify your identity when you use them. You need a debit card to access your account via an ATM and often to verify your identity at your local branch.

Interac e-Transfer

Want to send money instantly to someone else with a Canadian bank account? You can use an Interac e-Transfer to send your family or friends money via your bank's website or mobile app. All you need is their e-mail address or cell phone number.


Cheques are another way to access money in your account. You'll have to order cheques through your bank if you want them as many Canadian banks do not provide them for free. They are one way to pay for expenses like rent or to send money to family, friends, or businesses via the mail.

Online Banking/Mobile Banking

Banks also offer secure online banking options and mobile banking apps. You can set them up with the help of your financial advisor when opening accounts at a branch with a username and password. Through these platforms you can complete day-to-day transactions such as bill payments, email transfers, paying off credit cards without going into a branch. An important thing to note is that you should not give your login information to anyone in any circumstances.

Opening a bank account

It's easy to set up a bank account in Canada. Make an appointment at a branch and head in with the documents that you'll need to open an account (ask them in advance of your appointment what you’ll need). Generally, you'll need a photo ID (usually your passport), your Social Insurance Number (SIN) and your Visa documents or confirmation of permanent residency. They'll open your bank account the same day and get you ready to start banking.

Canadian credit

Canadian credit scores

Unfortunately when you move to a new country, your credit score doesn't come with you. Canadian credit scores range between 300 and 900 points with 900 being a perfect score. The average credit score in Canada is 650, but you will have zero as a credit score when you arrive. However, establishing a credit history and earning a good score is simpler than it might seem.

Canada's credit scores take into account things like:

  • Your payment history
  • Your amount of debt and the percentage of debt you have on your credit card (you should only use up to 30% of your available credit)
  • The length of your credit history
  • The type of credit you have
  • Recent inquiries on your credit score
  • Whether you have gone through bankruptcy or had collection issues in Canada.

Getting a credit card or other type of credit and regularly making your payments in full and on time every month is one way to develop a good credit score.

Credit cards

Credit cards are revolving lines of credit that allow you to easily buy things on credit. Most businesses accept them and they make setting up recurring payments and buying things online easy. Most banks offer reward points and other perks with their credit card offers that you can redeem for travels, cash, or other merchandise and gift cards.

Lines of credit

Lines of credit are similar to credit cards in that they are revolving credit vehicles that you can charge against and then pay off and charge against again, but they are different in that they often have much lower interest rates and do not come with a card to easily spend them. While some are unsecured debt, Canada also offers home equity lines of credit that use your home as security in order to provide you with a lower interest rate.


Loans are amortized credit vehicles where you borrow a set amount of money and agree to pay it off over a particular term in equal monthly or biweekly payments. They can be secured or unsecured and can be used for a variety of reasons, like for education.


Mortgages are amortized credit where you borrow funds in order to help you purchase a home and your home is used as security for the loan in order to help you qualify for a lower interest rate.

It's easy to get started

Unsure how to get your Canadian banking set up? Branches are trained to help newcomers learn how to navigate the Canadian banking system and they also have great offers for newcomers in Canada. Reach out to your local branch to get started and they'll help you take it from there!

This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. References to any third party product or service, opinion or statement, or the use of any trade, firm or corporation name does not constitute endorsement, recommendation, or approval by The Bank of Nova Scotia of any of the products, services or opinions of the third party. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.

Interac e-Transfer is a registered trademark of Interac Corp. Used under licence.