Banking in Canada: Complete guide for expats

Canada has a very well developed banking system with many different banks to choose from, and an excellent range of products and services. However, it’s not likely to be quite the same as what you’re used to at home. From the names of account types through to the common fees and charges, banking in a new country can be confusing. This guide is here to help international residents in Canada navigate the banking system and make the most of their money.

We’ll look at popular Canadian banks, account types and fees – and also some smart international solutions like Wise, which can help you hold, send, spend and exchange CAD alongside 40+ other currencies.

Overview of the banking system in Canada

There are plenty of banks to choose from in Canada, which usually offer good digital services – but in some cases, not all tasks can be completed online. In some cases for example you need to visit a branch to open an account or to send a higher value payment. Depending on the levels of digital banking in your country this may come as a surprise.

Day to day money management accounts in Canada are often called chequing accounts. That’s because some bank accounts in Canada offer cheques (checks in US English), which have been phased out in many other countries. Chequing services are gradually being replaced by more digital methods, but still get used more than you may expect.

It’s useful to know that most consumer accounts in Canada aren’t offered as multicurrency accounts, and don’t necessarily have a huge range of international features. You do find cross border banking services which are aimed at USD holding and management only, rather than broader international usage.

Alternative providers like Wise have been created to help meet the needs of people looking to manage their money across currencies, including holding, exchanging and spending CAD alongside other currencies.

Currency in Canada

The official currency in Canada is the Canadian dollar. You’ll see this written as CAD, or $. Each dollar is split into 100 cents, shown as c or ¢. 

Canadian bills are available in the following denominations $5, $10, $20, $50, and $100.

Coins available include  5¢, 10¢, 25¢, 50¢, $1 and $2.

Canadians often use nicknames for their coins, which can be helpful to know:

• 5¢ – nickel
• 10¢ – dime 
• 25¢ – quarter
• $1 – loonie
• $2 – toonie

If you need to exchange your home currency to CAD for your trip to Canada – or because you’re moving there – you can do so online and through digital providers, or through physical banks and exchange offices. Be careful to check the exchange rates you’re offered as these can include additional fees – a markup – which means you get less CAD for your home currency in the end.

Banking system in Canada

Canada has a very well developed banking sector with retail banks operating on local, regional and global levels. On a national level, The Bank of Canada influences monetary policy and issues currency.

There are then many different types of banks, alongside other licensed money service businesses. Financial services in Canada are well regulated, and overseen by many different bodies including the Financial Consumer Agency of Canada which protects consumer rights.

The biggest banks in Canada are generally considered to be:

• Royal Bank of Canada (RBC)
• The Toronto-Dominion Bank (TD Bank)
• The Bank of Montreal (BMO)
• Scotiabank

These banks operate nationally, and in some cases also offer US based accounts and branch services – TD Bank has a US presence for example.

Other providers, which aren’t banks, also offer specialist services. For example, Wise has multi-currency accounts and payment services which appeal to expats needing to manage their money across different countries and currencies.

Types of banks in Canada

Let’s have a quick look at the most common types of banks in Canada:

• Commercial banks like RBC and BMO which offer chequing and saving accounts in CAD for individual customers, as well as investment and private banking options
• Credit unions like Servus – offering accounts and credit services through member owned organisations which have few eligibility restrictions
• Online banks like Tangerine which offer a full suite of digital services with no branch network 
• Foreign banks operating in Canada which often only service enterprise level institutions, and do not have retail banking options

Bank account types in Canada

The most common account types you’re likely to see from Canadian banks will include:

• Chequing accounts
• Savings accounts
• Cross border accounts
• Business accounts

Each has their own uses – and many people have multiple different accounts to meet their transaction needs.

Chequing accounts

Chequing accounts are for day to day money management, and usually hold CAD only, with a linked debit card and chequebook. You can normally manage your money largely online but some transactions can only be made in a branch.

Chequing accounts often have a monthly fee, but this can be waived in many cases by holding a specific amount in the account at all times. Other fees apply based on the way you transact, which can include transfer charges and ATM fees. 

Savings accounts

Savings account products can include instant access account and term deposit options, which may get you a higher rate of return if you can leave your money for a longer time. Some banks also offer foreign currency savings products for customers who want to diversify their savings.

Savings accounts often do not have monthly fees but you’re likely to need to also hold a chequing account which might mean paying some fees anyway.

Cross border accounts

Cross border accounts offer ways for Canadian residents to easily hold and access USD. Accounts can be meant for day to day use, or for saving and paying bills, depending on the market. 

These accounts focus on customers who may do business in the US, travel there often, or need to pay ongoing bills like a US mortgage or education fees for a family member.

Business accounts

Most Canadian banks offer business account products which may be offered to specific entity types. Products are often split up to suit sole traders or startups, SMEs or enterprise level clients, which gives the choice to pick one account and then trade up as your business needs change.

Account fees can be quite different when looking at business products compared to personal accounts.

Save on the paperwork with providers like Wise

To open a bank account in Canada you usually need a local proof of address like a utility bill. That can be very hard to provide if you’re new to the country.  

The good news is that providers like Wise can offer a more flexible onboarding experience, with accounts you can open using a proof of address from your home country before you move to Canada. These providers aren’t banks – but they do offer safe services to manage CAD and other currencies, with a fully digital application process.

Open your account online or in an app and you can then get Canadian account information to hold, receive, spend and send CAD payments easily. Plus you’ll be able to make  international payments and order a card for day to day spending to keep on top of your money whichever currency you use. 

Bank cards and payment methods

The most common payment methods in Canada include:

• Cash – used for small purchases and tipping, although digital payment methods are becoming more common
• Debit and credit cards – very widely accepted, including wallets like Apple Pay for mobile payments
• Cheques – decreasing in popularity but still an available payment method for CAD transfers
• Buy Now, Pay Later (BNPL) – growing in popularity, options to get credit on purchases and repay in installments, often used in online shopping
• Local transfers – Interac is the most common CAD to CAD transfer methods and can be used to make small payments to friends, or to pay larger bills
• International transfers – bank wires are used, but alternative providers like Wise also offer lower cost international payments in many cases

Cash

While cash is getting less popular in Canada, as in many other countries, it’s still an important payment method. It’s also convenient to have cash on hand for tipping and other small value purchases. 

ATM fees can apply if you’re taking cash out in Canada, particularly if you make an out of network withdrawal.

Debit and credit cards

Using a card for a swipe or chip and PIN payment, or making a contactless payment with your card or phone are increasingly popular as payment methods. Some Canadian banks offer either a debit card on a network like Visa for global use, or an Interac card, which is intended for CAD payments only. 

Debit and Interac cards are generally free to use domestically, but fees of about 3% to 3.5% can apply if you use a Canadian card overseas.

If you intend to use a credit card, you’ll need to build your credit history to get the best available deal. Bear in mind credit card fees can be very high, in particular cash advance fees and penalties if you don’t repay your bill on time.

Cheques

Cheques are becoming less popular, but they’re still in use, for paying bills for example, and are usually only CAD denominated. If you have a cross border banking account you may also be able to access USD chequing services. Cheque fees may apply from your bank, to get a new book, or in some cases to cash your cheque.

Buy Now, Pay Later (BNPL)

BNPL services are common when shopping online and allow you to split the costs of a bill into installments, often with interest to pay. This is a form of consumer credit and should be used with caution – read the terms carefully so you know any fees that apply.

Local transfers

Most local transfers in Canada go through the Interac system. This allows for easy payments to friends and family – for splitting a bill for example – and for larger payments through your online banking service. 

Wires are also sometimes used, which can be more expensive but may arrive faster and be unlimited in value. Often high value wires can only be arranged by visiting your bank in person.

International transfers 

Banks will usually offer international wires – which can be expensive and may require you to visit a branch to arrange your payment. Some also offer global transfers which can waive the transfer fee, but which may still include an exchange rate markup. 

Specialist providers which offer digital only payments can be a good solution. Providers like Wise have high value payments with low fees and the mid-market rate. Or you might try OFX, which has no limits and a 24/7 phone service if you need to talk through your payment. Other options include Remitly and Xe Money Transfer, which both offer a broad coverage with variable fees and rates.

Opening a bank account in Canada

Opening a bank account in Canada should be simple enough once you’re a resident there – but you may need to visit a branch to get everything set up. This is usually the case if you have non-standard documents or are a first time customer at a particular bank.

Once you’ve decided which bank to target, you’ll need to choose an account, check the account eligibility and prepare your documents before you go to your account opening appointment, Usually you must take along:

• Proof of your ID – like a passport
• Proof of Canadian address – like a utility bill
• Your Social Insurance Number (SIN)

Major banks in Canada

Canada has a healthy range of banks and other financial institutions, from regional and national banks, global organisations, credit unions with niche markets, and digital providers. Here are some popular banks in Canada across all of these sub-types:

• Royal Bank of Canada (RBC) – one of the largest banks in Canada with comprehensive services for individuals and business owners
• The Toronto-Dominion Bank (TD Bank) – branch and ATM services in both Canada and the US with a good range of local and cross border banking options 
• The Bank of Montreal (BMO) – popular bank which has a suite of specialist account products including some for newcomers to Canada
• Scotiabank – large bank branch and ATM network, with broad services covering accounts, credits, loans and more
• Tangerine – digital only bank with accounts in CAD and USD, backed by The Bank of Nova Scotia
• Servus – largest credit union in Canada, with services for long term residents and new arrivals 

Banking services in Canada

• Chequing accounts – everyday accounts for the day-to-day needs, often including a debit card and a check book
• Loans – loan services are usually split by need, so auto loans to buy a car for example, with other products for things like home renovation
• Mortgages – mortgages can come from banks or stand alone specialist services, all subject to meeting eligibility rules
• Savings – instant access and fixed term products in CAD, with some options in foreign currencies are usually available
• Investments – investment services can focus on wealthy individuals or people saving for retirement 
• Digital banking – digital and internet banking options are usually available, but not all services may be offered without going to a branch
• Business banking – all major banks offer accounts, products, and services to businesses and freelancers in Canada

Banking hours in Canada

Most Canadian banks open from 9:30 a.m. to 5:00 p.m. or 10:00 a.m. to 5:00 p.m. Branches may be entirely closed or have shortened opening hours on a Saturday, and branches are often closed on a Sunday.

Canada banking fees and costs

Here are some of the most common banking fees, and average costs in Canada:

• Monthly account maintenance fees: often 15 CAD or more with ways to waive the fee often available  
• ATM withdrawal charges: often no in network fee, but costs of 5 CAD or 3% if you’re out of network
• Foreign transaction fees: usually around 3% or 3.5% where applied
• Local transfer fees: Interac payments often have no costs – or low fees of around 1 CAD per payment
• International transfer fees: international wires in foreign currency may have no transfer fee, but the exchange rate cost can be quite significant. Arranging a transfer in a branch may cost 50 CAD or more
• Other fees: Overdraft fees may be 5 CAD/item or more if the payment is rejected

The fees which apply to Canadian banks may be unfamiliar. While you’re learning about the costs of banking in Canada, compare the costs of using Wise for your international transactions. Wise uses the mid-market rate and low fees on all transfers, which can keep down your overall costs significantly. There are no hidden fees, and you can see what your recipient will receive in the end before you initiate your payment.

ATMs and cash withdrawals

ATM network coverage and accessibility in Canada is very good. Most major networks are supported and you’re seldom far from a cash point.

Be aware of the daily withdrawal limits that apply to your card, and the limits the ATM operator imposes. These limits vary, but you may find you have to take out cash in multiple installments if the ATM limit is low – paying the fee multiple times if one applies.

Out of network ATM use usually costs about 2 CAD to 5 CAD with some variation depending on where the ATM is located. If you’re getting a cash advance from your credit card the costs can be even higher. Generally there’s a flat or percentage fee, plus instant interest to be paid – making this a costly way to get cash.

Online and mobile banking

All Canadian banks have online and mobile banking services which offer comprehensive features to check your balance, make a payment, and manage your card.

Providers usually offer 2 factor authentication options for security and also have anti-fraud measures built into their operating processes. For higher value payments you may need to go to a branch to show your ID and verify a transaction, instead of using your banking app. 

International banking services

Canadian banks do usually offer international wire transfers and SWIFT payments, but multi-currency accounts and foreign exchange services aren’t normally available from a Canadian bank, outside of cross-border banking services covering USD.

Wise can be a good alternative if you’re struggling to manage your international finances with your Canadian bank. Open a Wise multi-currency account to keep your money in the currencies you need side by side and make payments digitally around the world with low fees and the mid-market rate. While bank transfer fees may be high and tricky to understand, Wise has transparent pricing which allows you to easily see the true cost of your overseas payment or currency conversion.

Building a credit history in Canada

As a newcomer to Canada you’ll want to build a local credit history to get a credit card, loans and other useful products in future.

Getting a credit card and building your credit history can be a good way to start. Some providers like KOHO and RBC offer credit builder cards which you can apply for, and use to build a good score. Be careful to repay your bills on time, and don’t max out your cards to show responsible use of the credit facility you’ve been granted. You can check your credit score through credit bureaus to see how you’re doing along the way.

Important banking complaints and problems in Canada

Most banking services in Canada work without issues. However, if you’re unlucky enough to run into problems you can make a complaint. Under rules set by the Financial Consumer Agency of Canada (FCAC), banks have to consider, and may need to respond in writing where customers complain, before allowing an escalation process to another appropriate ombudsman depending on the type of issue.

Some complaints made about financial services in Canada include lack of transparency about pricing and slow response times to fraud allegations, particularly with vulnerable customers.

Banking security and fraud in Canada

Canadian banks do run high level security throughout their operations, but as criminals are constantly trying to find ways to profit it’s still important to take common sense precautions:

• Keep your banking information, passwords and PINs secret
• Review your transactions frequently and report anything that looks suspicious
• Get to know common banking scams and fraud tactics to be able to spot them if you see them
• Use 2 factor authentication on your phone, and do not use digital banking on open wifi networks
• Watch out for phishing and other common email and social media approaches
• Never feel pressurised into making a payment – check for legitimacy, and make complaints to your own bank or to the FCAC if you need to

Practical banking tips for expats

• Having a Canadian bank account is helpful once you arrive in Canada – but opening an account with a provider like Wise can be a good plan to manage CAD services before you relocate
• Read through your account fee schedule carefully as the costs of your Canadian account might be very different to the costs of your home account
• If you need to manage your money across currencies or send international payments, use tools to track exchange rates, to convert or send at the optimal time
• Consider having several different accounts so you can choose the right account and card for specific transactions, in Canada or internationally 

Conclusion: Banks in Canada

Canada has a strong banking system, with many choices for account and card services. However, features and fees may be very different to what you’re used to, so investing some time in researching the Canadian banking system will really pay off.

Use this guide to get a feel for what to expect from a Canadian bank or credit union, and also how a provider like Wise could help if you’re an expat living an international lifestyle.

You can have Wise Account to manage your money across 40+ currencies with mid-market exchange rates, low, transparent fees and no ongoing costs.