The Banking System of Canada

1. What is the Canadian banking system?
Immediately after arrival, newcomers will face the Canadian banking system. The department of Citizenship and Immigration Canada has established standards of financial support needed by immigrants. In order to move to Canada, for example, a family of three must bring with them $18,260. Many newcomers bring more money, and they have to decide where to keep the money and how to spend it. Canada's banking system will provide you with the ability to save your money, tell you how to invest it in profitable projects, allow non-cash payments for purchases in stores and on the Internet and provide loans. A good knowledge of Canada's banking system will protect you from possible financial losses.
According to the Canadian Bankers Association, there are 80 banks in Canada with more than 6,000 branches, which employ almost 300,000 Canadians.

2. What currency is used in Canada?
The official currency of Canada is the Canadian dollar; its letter code is CAD. There are coins of 5, 10, 25 cents, $1 and $2 in circulation. Also they have nick names: 5 cents - nickel, 10 cents - dime, 25 cents - quarter, one dollar - loonie, $ 2 - toonie. Paper bills are issued in denominations of 5, 10, 20, 50 and 100 dollars. Until recently, the 1 cent coin (penny) was in use. Now it has been withdrawn from circulation, but shops still display prices up to one cent. Getting change at the store, you will eventually find coins issued in the United States. Do not be surprised: American coins are also accepted in Canada, although bills are usually not.

3. How can I choose a bank?
There are many different banks in Canada. The best known are Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, and Bank of Montreal. When choosing a bank, determine how close it is to your residence, whether their work hours during weekdays and weekends are convenient for you, and whether there is a teller at the branch who speaks your language. To open a bank account you need to come in person with original documents of identity. Talk with a financial advisor atthe bank about what type of account would be best for you, discover how much you will pay the bank for their services, and what benefits the bank provides for newcomers. You are not required to have a job and immediately put the money into the account. If you want to change the previously banks, you will be able to do so later.

4. What are the services provided by a bank?
You deposit money in your bank account, or remove the desired amount. If the account is opened for two people, it can be used by both of them. You can deposit into your account salaries, allowances, pensions, income from sales on the Internet, and others. Using your bank account you can pay for telephone, TV, the Internet, rent and other expenses. The bank issues a bank card, with which you will be able to make purchases in shops or to withdraw money from ATMs. The bank can also exchange currency for you and issue you certified cheques and credit cards. All your banking operations will be recorded in you bankbook or electronically using online banking.

5. What banking benefits are available to newcomers?
Most banks generally offer for newcomers:
•  A savings account free of charge for a set period of time.
•  A free safety deposit box for a set period of time.
•  Easier access or automatic approval to obtain a credit card to build up a credit rating in Canada.
•  Higher interest rates on savings plans and investment programs. Some banks include preferred rates for mortgages.
Such packages are available for newcomers who have arrived in Canada within the past three years. Some banks serve newcomers in their native languages, have plans for international students and foreign workers and provide helpful guides to settling in Canada.

6. How can I get a credit card?
To obtain a credit card, contact your bank. Before issuing you a credit card, the bank will get acquainted with your account and review your credit history. If you do not have a bank account or credit history, the bank may give you a secured credit card. To do this, you will have to pledge as security some valuable property as collateral. If you do not pay the debt, the property you have will be taken away to repay the debt. Ask your bank about other possibilities for obtaining a credit card with no credit history. When shopping with a credit card, especially online, be sure that no one else has access to it. If you will find purchases you did not make on your account, immediately contact your bank.

7. How can I use the credit card without becoming a victim of fraud?
Using credit cards, you may become a victim of fraud. To protect against fraud make a photocopy of your credit card information and store it in a safe place at home. Don't lend your credit card to other people, and in case of loss, immediately inform your bank. While receiving bills, double check costs and expenses paid by your credit card. In unfamiliar places it is better to pay in cash and do not disclose your credit card details to unknown persons or organizations. Shop via the Internet only with recognized buyers. See Protection from frauds and scams

8. What is a money order?
Often you make a payment through a bank by cheque. You will get a cheque book when you open a chequing account. However, if someone writes you a cheque, it does not guarantee immediate payment, because sometimes there is no money in that person’s account. Guaranteed payment can be provided only by a certified cheque which is called a money order. To get a money order you should contact your bank. If you have enough money in your account, you can obtain a money order. You should also require a money order from unfamiliar customers, or those whom you do not trust. There are fees associated with issuing money orders.

9. Where can I invest my money?
In Canada, there are many possibilities for investing but before you start, you have to find out detailed information about investing rules. In Canada there are the following investment programs:
•  A saving account is a bank account for long-term accumulation of money to buy houses, cars or travel abroad. Rates of interest are usually low.
•  A bond - security with fixed income.
•  A Guaranteed Investment Certificate (GIC) is a secure investment that guarantees 100% of the original amount that you invested, provided you leave the money invested for a defined period.
•  A tax-free saving account (TESA) - tax free bank account with an annual contribution of $5,000.
•  A mutual fund - investing money in companies engaged in investment returns.
•  A stock - the shares purchased on the stock exchange or corporations, which can earn income.
•  A Registered Retirement Savings Plan (RRSP).
•  A Registered Education Savings Plan (RESP).
See also book by Eric Tyson and Tony Martin, Investing for Canadians for Dummies.
A booklet Investments at a glance on the site
A Guide for Investors, Getting Help with Your Complaint

10. What is an RRSP and a RESP?
RRSP means a Registered Retirement Savings Plan. This is a way of saving money for retirement. If you put part of the money you earn into an RRSP account at the bank, this amount will be removed from your earnings, so you will pay less taxes. Putting money into an RRSP account makes sense if you earn sufficiently high money and pay high taxes. But if there is an urgent need for money-- for example, you want to buy a house-- you can withdraw money from the RRSP account and pay taxes again. To open an RRSP account, you must have permanent [resident?] status in Canada. Talk with a financial advisor to receive advice about when to open an RRSP account and what type of account to open. RESP is short for Registered Education Savings Plan. This is a way of saving money for your children’s education. RESPs work in a similar way to RRSPs, in that they are tax free and cannot be withdrawn at any time without penalty, but they are designed specifically for funding education.
Read more about RESPs on the website

11. What is a financial adviser?
If you are looking for a suitable project for investment, consult with a financial adviser, who will tell you the best option to invest money to maximize income and reduce taxes. Start by asking for referrals from friends, family, work colleagues and professionals you trust, like your accountant or lawyer. Also you can find a financial adviser in the city where you live by visiting
To find out if the adviser is qualified to give you the help you need ask such questions as:
•  What is your education and professional experience?
•  Are you and your firm registered with a securities regulator?
•  What products and services do you offer?
•  How will you help me reach my goals?
•  How are you paid for your services (salary, commission or flat fee)?
•  What fees will I be charged and how will they be reported to me?
•  Can you give me references from clients who are like me?
If you have received advice which will lead to losses, you can complain to the organization that employs your financial adviser. See also: Working with a financial adviser

12. How can I pay taxes in Canada?
In Canada there are three main types of federal taxes: for employed people, for business owners and for all Canadians making purchases in the stores.
Annually at the beginning of year all residents of Canada receive an annual tax report (Income Tax Return), and everyone should pay their taxes before or on April 30. Blank forms to fill in data about your income and expenditure, along with instructions on how to fill out these forms can be acquired for free at post offices. If you cannot fill out the forms by yourself, contact an accountant or, in Ontario, a Volunteer Tax Preparation Clinic, the addresses of which you can find on the website These volunteers provide free assistance in completing tax returns for people with low income and a simple tax situation. Business owners would be better to entrust the completion of these forms to an experienced accountant. There are legal possibilities for tax cuts and tax credits for low-income families, seniors, the disabled, also those who have aged parents and others.

13. Where can I find sources of additional information about banking in Canada?
We recommend the following sources about banking in Canada for newcomers:
•  Money and finances
•  Royal Bank of Canada (RBC) (Click on Newcomer).
•  Bank of Nova Scotia (Scotiabank) (Click on New to Canada).
•  Bank of Montreal (BMO) (Click on New to Canada).
•  Canada Revenue Agency, Newcomers to Canada