Opening a savings account at a Canadian bank is one of the first and most important steps for newcomers to Canada. The right account will not only help you keep your money safe, but also earn passive income in the form of interest, effectively manage your finances, and build credit history in your new country. This detailed guide explains the entire process from start to finish, including the necessary documents, types of accounts, bank comparisons, and practical tips for maximizing benefits.
Why a savings account is critical for newcomers
Opening a bank account in Canada should be your second priority right after obtaining your Social Insurance Number (SIN). This step is not just a convenience—it is a necessity for full integration into the Canadian financial system. Without a Canadian bank account, you will be forced to use cards from your home country, which will result in constant currency conversion fees and international commissions. These costs add up quickly and can amount to hundreds of dollars per month.
A savings account serves several critical functions at once. First, it provides secure storage for your funds under the protection of the Canada Deposit Insurance Corporation (CDIC), which guarantees reimbursement of up to $100,000 in the event of a financial institution's bankruptcy. Second, a savings account generates passive income through interest, which is especially important in times of inflation. Third, actively using banking products helps you build a credit history in Canada, which will be critical for obtaining credit cards, renting housing, car loans, and mortgages.
It is important to understand that your credit history from another country does not transfer to Canada. You start with a clean slate, and Canadian credit bureaus Equifax and TransUnion will not have any information about you until you start using local financial products. This means that even if you had an excellent credit history in your country of origin, in Canada you will be considered “credit invisible” — invisible to the credit system.
Basic requirements for opening a savings account
Canadian banks adhere to strict regulatory requirements for customer identification, so preparing the correct documents is a key first step. Basic eligibility criteria include age — you must be over 18 (or 14 in Quebec with parental consent), have a permanent or temporary address in Canada, and have the appropriate documents to prove your identity and immigration status.
The identification system works on the principle of two documents from reliable sources. One document must contain your name and address, and the other must contain your name and date of birth. Acceptable documents include a passport (Canadian or foreign), Canadian driver's license, permanent resident card or Confirmation of Permanent Residence (COPR) document, study permit, or work permit for temporary residents. To confirm your address, banks accept utility bills, rental agreements, bank statements, or tax documents from the Canadian government.
A critically important document is the Social Insurance Number (SIN), a nine-digit identifier used for tax reporting. A SIN is required to open any interest-bearing account, as banks are required to report your interest income to the Canada Revenue Agency. If you have not yet received your SIN, this should be your top priority — without it, you will not be able to open a full-fledged savings account. The process of obtaining a SIN has now been simplified: after applying online, your number will be available in My Service Canada Account within 10 business days.
For newcomers, the process is slightly different from that for Canadians. If you are a permanent resident, you will need your PR card or COPR document plus one additional Canadian photo ID, such as a driver's license. If you are a foreign worker on a work visa, you will need your work permit plus an additional Canadian photo ID. Some banks may also request a letter from your employer confirming your annual income, especially if you are applying for a credit card at the same time.
Understanding the Canadian banking ecosystem: account types
The Canadian banking system offers several fundamentally different types of accounts, each serving specific purposes. Understanding these differences will help you make the right choice and optimize your financial strategy.
Chequing Account (checking account)
A chequing account is designed for everyday transactions—deposits, cash withdrawals, bill payments, debit card purchases, and transfers. It is your primary operating account through which most financial transactions pass. Chequing accounts usually do not earn interest (or earn minimal interest), but allow for an unlimited number of transactions. Most Canadians receive their salaries directly into their chequing accounts through direct deposit. This account comes with a debit card that can be used at ATMs and for purchases.
Savings Account
Savings accounts are designed to store money that you don't need for daily expenses and to earn interest. The main difference is that savings accounts earn interest on your balance but limit the number of withdrawals or purchases from the account. If you exceed the allowed number of transactions, the bank will charge an additional fee for each transaction. Savings accounts typically do not have a monthly subscription fee, making them ideal for long-term savings.
High-Interest Savings Account (HISA)
A High-Interest Savings Account is a specialized type of savings account that offers significantly higher interest rates than standard savings accounts. As of early 2026, the best HISAs in Canada offer rates ranging from 2.25% to 4.75% per annum. For example, EQ Bank Personal Account offers a stable 2.75%, Saven Financial offers 2.85-3.15%, and banks such as Scotiabank MomentumPlus, Simplii Financial, and Tangerine offer promotional rates of up to 4.50-4.75% for the first 3-5 months. After the promotional period ends, rates usually drop to a base level of 0.30-0.65%.
Tax-Free Savings Account (TFSA)
A Tax-Free Savings Account is a registered account that allows your investments and interest to grow tax-free. For 2026, the contribution limit is $7,000, plus any unused contribution room from previous years. It is important for newcomers to know that your contribution room only begins to accumulate from the year you became a resident of Canada. Funds can be withdrawn at any time without being taxed, and the amount withdrawn is returned to your contribution room the following year. A TFSA is ideal for short- and medium-term savings goals.
Registered Retirement Savings Plan (RRSP)
A Registered Retirement Savings Plan is designed for retirement savings. The contribution limit is 18% of your earned income from the previous year, up to a maximum of $33,810 in 2026. Contributions to an RRSP are tax-deductible, which reduces your taxable income, but withdrawals are taxed at your marginal tax rate. An RRSP is most beneficial if your current tax rate is higher than it will be in retirement.
Optimal strategy
For most newcomers, the optimal strategy is to open a chequing account for daily transactions and a HISA for savings. This combination is easy to manage through automatic transfers between accounts, which allows you to automate the savings process.
Specialized programs for newcomers: maximizing benefits
Canadian banks actively compete for newcomer customers by offering specialized packages that can save you hundreds of dollars in the first year. These programs are designed with an understanding of the unique needs of new immigrants and often include waived fees, simplified documentation requirements, and additional financial products.
RBC Newcomer Advantage
RBC Newcomer Advantage offers free RBC No Limit Banking or RBC VIP Banking accounts for 12 months. After the first year, these accounts cost $10.95 or $30 per month, respectively. The package includes unlimited debit transactions and Interac e-Transfers, two free international transfers per month for six months, and access to credit cards, mortgages, car loans, and investment products. The program is available to permanent residents and international students.
Scotiabank StartRight Program
The Scotiabank StartRight Program is one of the most generous programs on the market, offering up to $2,300 in value in the first year. If you open a Preferred Package chequing account, the $16.95 monthly fee will be waived for the first year. After the first year, the fee can be avoided by maintaining a minimum balance of $4,000. The program includes unlimited transactions, one free withdrawal per month from a non-Scotiabank ATM, access to a high-interest savings account, and up to $139 in waived fees on Scotiabank credit cards in the first year. Additionally, you get a free credit check and rewards through the Scene+ program. Ratehub.ca recognized StartRight as the best banking offer for newcomers in 2025.
CIBC Welcome To Canada Banking Package
The CIBC Welcome To Canada Banking Package is available to newcomers who have obtained permanent resident status within the last five years. The Smart for Newcomers account offers a $14.95 monthly fee waiver for one year, unlimited debit transactions and Interac e-Transfers, and a free safety deposit box for one year (costs $60 after the first year). Newcomers also have access to a variety of credit cards, mortgages, personal loans, and investment products.
TD New to Canada Banking Package
The TD New to Canada Banking Package requires a personal visit to a TD branch to open an account. If you currently live in China or India, you can call to pre-register your account, but you will have 75 days after arriving in Canada to visit a branch to activate it. TD offers fee waivers for newcomers, but the specific details of the package vary depending on the type of account you choose.
BMO Newcomer Banking
BMO Newcomer Banking allows you to open an account online before arriving in Canada if you are from a supported country and have a work permit or visa. Upon arrival, you can also open an account at a branch. Required documents include one photo ID and a study or work permit, plus a Canadian address.
National Bank of Canada
National Bank of Canada offers one of the longest programs—up to three years with no fixed monthly fees under certain conditions. This is especially beneficial for those who want predictable daily expenses without surprises in the form of bank fees.
Low-cost accounts
As of December 2025, a new federal government initiative came into effect in Canada, requiring 14 federally regulated financial institutions, including the six largest banks, to offer low-cost accounts for no more than $4 per month. These accounts include 50% more debit transactions per month, including electronic transfers (Interac e-Transfers). Newcomers to Canada are eligible for $0 per month accounts during their first year.
Step-by-step instructions for opening a savings account
The process of opening a savings account in Canada may seem complicated, but if you prepare all the necessary documents and understand the steps, it will only take a few minutes to a few days, depending on the method you choose.
Step 1: Research and choose a bank
Before opening an account, invest time in researching different banking options. Compare interest rates on savings accounts, monthly fees, options for waiving fees with a minimum balance, availability of branches and ATMs in your area, and special offers for newcomers. Use online comparison tools such as Ratehub or NerdWallet to see current rates and fees.
It's important to understand the difference between traditional banks (the “Big Five”: RBC, TD, Scotiabank, BMO, CIBC) and online banks (EQ Bank, Simplii Financial, Tangerine). Traditional banks offer a wide network of branches and ATMs, which can be convenient for in-person service. Online banks typically offer higher interest rates and lower (or no) fees, but do not have physical branches.
Step 2: Gather the necessary documents
Check the exact requirements of your chosen bank, as they may vary slightly. In general, you will need:
- A valid passport or other government-issued photo ID
- Documents confirming your immigration status (work permit, study permit, PR card, or COPR)
- Proof of a Canadian address (rental agreement, utility bill, bank statement)
- Your Social Insurance Number
If you don't have all the documents yet, contact the bank in advance to find out if they can work with what you have. Some banks are more flexible than others, especially those that specialize in serving newcomers.
Step 3: Choose how you want to open your account
You have three main options: online, by phone, or in person at a branch.
Online
Online is the fastest method, especially for digital banks. Visit the bank's official website, find the new account opening section, fill out the online form with your personal information, upload digital copies of your documents, verify your identity through the bank's verification system (often through Interac verification service), and wait for confirmation. For online banks such as EQ Bank or Simplii, the process can take anywhere from a few minutes to a few hours. Traditional banks may require 1-3 business days for full activation even after an online application.
In-person visit to a branch
A personal visit to the branch is the most reliable method, especially if you are a newcomer. Book an appointment in advance so you don't have to wait long. Bring all original documents (not copies) with you. A bank representative will check your documents, help you choose the right type of account, explain the terms and fees, and answer all your questions. The process at the branch usually takes 30-45 minutes. Most banks require newcomers to visit in person to open an account under specialized programs.
By phone
Some banks offer this option, but it usually requires a subsequent visit to the branch to verify your documents.
Step 4: Fill out the application
Regardless of the method, you will need to provide:
- Full name (as on official documents)
- Date of birth
- Permanent Canadian address
- Phone number and email
- Social Insurance Number
- Employment details (if applicable)
- Answers to questions about the source of funds
For online applications, you will also need to create a login and password for online banking, set up security questions, and possibly set up biometric authentication (fingerprint or facial recognition).
Step 5: Identity verification
The bank will verify your identity in accordance with anti-money laundering requirements. This may include checking your documents through specialized systems, using the Interac verification service to confirm your identity through another Canadian bank's online banking (if you already have an account), or a video call for verification (for some online banks).
Step 6: Make an initial deposit
Some accounts require a minimum initial deposit to activate. For example, some TFSAs require $25 to open. You can deposit funds via:
- Bank transfer from another Canadian account
- International transfer (if opening an account before arrival)
- Cash deposit at a branch
- Check
Step 7: Receive your banking materials
Once your account is approved and activated, you will receive:
- Your account number and transit number
- Your debit card (mailed within 7-10 business days or issued at a branch)
- Your card PIN (sent separately for security reasons)
- Access to online banking and mobile app
- Checkbook (if ordered)
For digital banks such as EQ Bank, which do not offer a physical debit card, you will only have access through online banking and can transfer funds via Interac e-Transfer.
Navigating bank fees and strategies for minimizing them
Bank fees can have a significant impact on your finances, especially if you don't understand the pricing structure. Understanding the different types of fees and strategies for avoiding them can save you hundreds of dollars each year.
Monthly subscription fees
Monthly subscription fees are the most common type of banking expense for chequing accounts. Basic accounts typically cost $3.95-$4 per month and include 12 transactions. Mid-tier accounts cost $10.95-$16.95 per month with 25 transactions or unlimited transactions. Premium packages cost $29.95-$30.95 per month and include unlimited transactions, free checks, credit card fee waivers, and other benefits.
A key strategy for avoiding monthly fees is to maintain a minimum daily balance. Most banks waive the fee if you maintain a certain amount in your account throughout the month. For example, the TD Unlimited Chequing account costs $16.95 per month, but the fee is waived if you maintain a daily balance of $4,000. The Scotiabank Preferred Package also costs $16.95, but the fee is waived with a balance of $4,000. BMO's Performance Plan requires $4,000, and the Ultimate Package requires $6,000 to waive the fee.
An important caveat: if your balance falls below the minimum for even one day, you may be charged the full monthly fee plus an additional fee for each transaction you make. This makes the minimum balance strategy risky for those with irregular income or unpredictable expenses.
An alternative strategy is to use free online banks. Simplii Financial, Tangerine, and EQ Bank offer chequing and savings accounts with no monthly fees. Simplii gives you access to the CIBC ATM network, Tangerine gives you access to the Scotiabank network, and EQ Bank has no ATMs at all but offers the highest interest rates. Many Canadians use a hybrid strategy: a free online bank for basic chequing and savings, and a traditional bank for specialized services such as mortgages or investments.
Savings accounts and fees
Savings accounts typically do not have monthly fees, making them ideal for long-term savings. This is one of the key advantages of opening a separate savings account instead of keeping all your money in a checking account.
Transaction fees
Transaction fees are charged when you exceed the number of transactions included in your plan. Basic accounts typically include 12 transactions per month, after which each additional transaction costs $1.00-$1.25. This can add up quickly if you are an active user. The solution is to switch to a plan with unlimited transactions or use a free online bank.
Fees for using other banks' ATMs
Fees for using other banks' ATMs range from $2 to $5 per withdrawal. If you use an ATM that isn't your bank's, you may be charged twice: by your own bank and by the bank that owns the ATM. Avoid these fees by only using ATMs from your bank or its partner network. Some premium accounts include a few free withdrawals from other banks' ATMs per month.
Overdraft fees
Overdraft fees are charged when your balance goes negative. The base overdraft fee is $5 per month (regardless of how many times you go overdrawn) or $5 per use. In addition, interest is charged on the negative balance at a rate of 21% per year. The overdraft must be repaid within 89 days. Overdraft protection is available with limits ranging from $300 to $5,000.
Understanding interest rates and maximizing savings income
Interest rates are a key factor in determining how much your savings will grow over time. Understanding how interest works and how to maximize it can significantly increase your passive income.
How interest is calculated
Most savings accounts in Canada use a daily interest accrual system with monthly payments. This means that the bank calculates interest every day based on your closing balance, keeps a daily record of these amounts, and at the end of the month deposits the total amount of interest accrued into your account. This new balance (your original savings plus the interest earned) is then used as the basis for calculating interest for the following month.
Compound interest
Compound interest is a powerful mechanism for growing wealth. The compound interest formula is: A = P(1 + r/n)^(nt), where A is the final amount, P is the initial amount (principal), r is the annual interest rate (as a decimal), n is the number of times interest is compounded per year, and t is the number of years.
Let's look at a practical example to understand the power of compound interest. Suppose you deposit $10,000 in a savings account with an interest rate of 4% per annum. With annual accrual, after 5 years you will have $12,167. With monthly accrual, after 5 years you will have $12,211. With daily compounding (the most common practice in Canada), after 5 years you will have approximately $12,214. The difference may seem small, but it becomes significant with larger amounts and longer periods of time.
The frequency of compounding affects your total earnings. The more often interest is compounded, the more you will earn, as the interest begins to “earn interest” faster. Daily compounding is most beneficial to depositors and is the standard for most high-interest savings accounts in Canada.
Current HISA interest rates
As of early 2026, the best HISA interest rates in Canada range from 2.25% to 4.75%.
- EQ Bank Personal Account offers a stable 2.75% with no promotional period
- Saven Financial offers 2.85-3.15%
- Neo Savings Account offers 2.25-3.0%
- Wealthsimple Cash offers 2.25%, which is competitive among platforms with additional features
Many traditional banks offer attractive promotional rates to attract new customers:
- Scotiabank MomentumPlus offers up to 4.75% for the first three months, after which the rate drops to 0.50-0.65%
- Simplii Financial offers 4.50% for the first 4-5 months, after which the rate drops to 0.30-1.50%
- Tangerine offers 4.50% for the first 5 months, after which the rate drops to 0.30%
- CIBC eAdvantage offers 4.60% for the first 90 days
Promotion hopping strategy
The promotion hopping strategy is popular among experienced Canadian consumers. It involves opening an account with a high promotional rate, maximizing profits during the promotional period, and then transferring funds to another bank with a new promotional rate. Some users hold accounts at several online banks (EQ, Simplii, Tangerine) at the same time and move money between them to always get the best rates.
Long-term strategy
For long-term savings, EQ Bank is often recommended as the best option because their base rates remain consistently high without promotional gimmicks. EQ also offers a Notice Savings Account, which pays 2.75% with a 30-day notice period (or 2.35% with a 10-day period). This means you need to notify the bank 10-30 days before withdrawing your funds, but you get a slightly higher rate in exchange for this flexibility.
Deposit safety: CDIC insurance system
Understanding how your money is protected in Canadian banks is critical to your financial security. The Canada Deposit Insurance Corporation (CDIC) is a federal Crown corporation that provides deposit insurance in the event of a member bank's bankruptcy.
CDIC coverage limits
The current CDIC coverage limit is $100,000 per depositor per category at each member financial institution. “Per category” means that you can have more than $100,000 insured if your money is spread across different account categories. The main categories include:
- Personal accounts
- Joint accounts
- Trust accounts
- Registered Retirement Savings Plans (RRSPs)
- Registered Retirement Income Funds (RRIFs)
- Tax-Free Savings Accounts (TFSAs)
Practical example of coverage
If you have a Personal Account with a balance of $100,000, a joint account with your spouse with a balance of $100,000, and a TFSA with a balance of $100,000 — all at the same bank — you have $300,000 in CDIC coverage because these are three different categories. Each category is insured separately.
Joint accounts and CDIC
For joint accounts, coverage is $100,000 per set of co-owners, not per person. This means that if you have a joint account with your partner with a balance of $150,000, only $100,000 is insured, and $50,000 is uninsured. If you have a joint account with another person (e.g., your parents), it is considered a separate set of co-owners and receives separate coverage of $100,000.
Future changes to limits
As of 2025, the Canadian federal government is considering raising the CDIC coverage limit to $150,000. The last change to the limit was in 2005, and since then, the real value of deposit protection has declined due to inflation. Adjusted for inflation, the limit would be approximately $150,000 today. The government is also considering extending coverage for temporarily high balances associated with significant life events, such as the sale of real estate or inheritance. These changes may come into effect after the consultation and legislative process is complete.
What the CDIC covers
The CDIC covers most types of deposits and Guaranteed Investment Certificates (GICs), but does not cover mutual funds, stocks, bonds, or cryptocurrencies. All major Canadian banks and many other financial institutions are members of the CDIC. You can check if your bank is a member of CDIC on their official website.
Diversification for large savings
If you have significant savings that exceed the coverage limit, consider a strategy of diversifying across several banks. For example, if you have $250,000 in savings, you could spread it across three different banks ($83,333 in each) so that all of your funds are fully insured by the CDIC.
Technology and security: mobile banking and digital tools
Modern banking in Canada is predominantly digital, and understanding how to use mobile apps and online banking safely is critical for convenience and security.
Mobile banking security
Canadian banks have invested millions of dollars in advanced cybersecurity technology, making mobile banking apps very secure. Apps such as the Scotiabank Mobile Banking app have a secure connection to the bank's systems, making it virtually impossible for fraudsters to interfere. The apps have multiple layers of security: multi-factor user verification, hiding credit card and account numbers, availability of aliases for accounts, and automatic session termination after a period of inactivity.
Biometric authentication
Biometric authentication is one of the most important security features. It allows you to log into your banking app using your fingerprint (Touch ID or Fingerprint) or facial recognition (Face ID or Face Unlock). This is much more secure than a password because even if someone gains access to your phone and cracks your password, it would be virtually impossible to log into the banking app without your fingerprint or face. It is important to note that biometric data is never stored in the Scotiabank system or other banks — it is only stored locally on your device.
Two-step verification
Two-step verification (2-Step Verification) adds an extra layer of security. When you log in, you not only need to enter your password, but also confirm your identity through an additional factor, such as a one-time code sent to your phone. RBC and other banks offer Sign-In Protection, which requires you to answer Personal Verification Questions that only you know the answers to.
Basic security practices for mobile banking
Basic security practices for mobile banking include:
- Create a strong, unique password for your banking app that contains a combination of letters, numbers, and symbols. Do not use the same password for other websites or apps.
- Enable biometric authentication on your device and in your banking app.
- Set up a passcode or biometric authentication to unlock your phone.
- Never share your user IDs, passwords, or PINs with anyone, even family or friends.
- Do not store bank account numbers, user IDs, or passwords on your mobile device.
- Always download banking apps only from the Apple App Store (iPhone) or Google Play Store (Android), never from unverified sources.
- Enable automatic software and security updates.
- Be cautious with free apps and utilities, such as wallpapers or calendars, that may collect your data or contain malicious code.
Alerts and Monitoring
RBC Alerts and similar notification services from other banks allow you to set up alerts for large transactions on your account so that you are immediately notified of any suspicious or unauthorized activity. NOMI (for RBC customers) tracks your usual spending and notifies you of any new or unusual activity.
What to do if you suspect a security breach
If you suspect a security breach, take the following steps immediately:
- Change your online passwords (email, mobile banking, etc.).
- Contact your device service provider to disable your account and blacklist your phone by its unique identifier (IMEI).
- Notify your bank of the incident immediately.
Joint accounts: benefits, risks, and best practices
Joint accounts can be a useful tool for managing family finances, but they also carry specific risks and legal implications that are important to understand.
What is a joint account?
A joint account offers the same features as a chequing or savings account in one person's name, but all account holders have full access to the funds. This means that any co-owner can withdraw all funds from the account without your permission. All joint account holders can also view all transactions on the account. In the event of a divorce, the account may be considered a marital asset and divided accordingly.
Typical uses for joint accounts
Common uses for joint accounts include:
Married couples
Married couples (married or unmarried) often share finances and use a joint account to manage their money together. They may also save together for retirement, achieve shared financial goals, and track household expenses.
Parents with children
Parents with teenagers or young adults may use joint accounts as “training wheels,” teaching their children about budgeting, saving, spending limits, and understanding what constitutes a financial emergency.
Families with elderly parents
Families with elderly parents can use joint accounts to help parents manage their finances, especially if they need assistance due to age or health.
Siblings
Siblings who jointly own a family villa or other real estate can use a joint account to manage related expenses such as insurance and bill payments.
The process of opening a joint account
The process of opening a joint account is identical to opening an individual account, but you fill in the joint applicant's information alongside the primary information. All joint owners must provide the same identification documents required for individual accounts.
Legal and tax implications
The legal and tax implications of joint accounts can be complex. In most cases, if one account holder dies, the funds usually remain available to the surviving account holder. However, this can be challenged if the deceased's funds are subject to probate (for example, if an elderly parent had a joint account with one of their children). In Quebec, joint accounts are frozen upon the death of an account holder, which is different from the practice in other provinces.
CDIC for joint accounts
CDIC insurance for joint accounts is $100,000 per set of co-owners, not per person. This means that if you have a joint account with your partner, you get $100,000 of coverage together, not $100,000 each. However, if you also have an individual Personal Account at the same bank, it gets separate $100,000 coverage because it is a different category.
Hybrid Strategy for Couples
The hybrid strategy is popular with many couples. Each partner keeps their individual checking and savings accounts for personal expenses and savings, plus they have a joint checking account for household expenses. Salaries are deposited into individual accounts, and then each partner transfers an agreed-upon amount to the joint account to cover shared expenses such as rent, utilities, and groceries. This system allows you to maintain financial autonomy while effectively managing shared responsibilities.
Discuss before opening
Before opening a joint account, be sure to discuss with all co-owners how the account will be used, who has access to the money and for what purposes, whether approval is required for all expenses or only for certain ones, and how financial disagreements will be resolved. Since legal and tax implications may vary depending on various factors, including account ownership, survivor rights, and the province in which you live, consider consulting with a legal and tax advisor before setting up a joint account.
Cash withdrawal limits and managing access to funds
Understanding cash withdrawal limits is important for planning your financial transactions and avoiding unpleasant surprises when you need cash.
Daily withdrawal limits
Most Canadian banks set daily limits on ATM cash withdrawals for security reasons. These limits depend on your account type, your bank, and whether your card is local or foreign.
For a standard debit card, you can usually withdraw between $500 and $1,000 per day. Premium accounts may allow you to withdraw up to $2,000 per day. With a foreign card, the limits may be stricter, and there may be additional checks to prevent fraud. For example, TD Bank allows $1,000 per day for a standard debit card, while Scotiabank allows up to $1,200. These rules are important, especially if you are traveling and relying on cash for transportation, food, or emergencies.
Two-way limits
It is important to understand that there are both limits set by your bank on your card and limits set by the bank that owns the ATM. Some ATMs, especially older models, have physical limitations on the number of bills their dispensers can handle at one time to prevent jamming. For example, some TD ATMs allowed withdrawals of up to $1,200 per transaction, especially when they first introduced machines that dispensed $50 bills. Some older Scotiabank ATM models may allow withdrawals of up to $1,000 in $20 bills. RBC also had machines in select locations that allowed withdrawals of up to $2,000, but this feature is limited to specific models.
Viewing and changing limits
You can view your daily card access limits through your bank's mobile app or online banking. Most banks allow you to temporarily increase your withdrawal limit for specific needs.
For RBC, you can set temporary limits on ATM withdrawals or in-store purchases through RBC Online Banking by selecting an end date for the increased limit. For TD, you need to call EasyLine Telephone Banking or visit your local TD Canada Trust branch to change your withdrawal limits. Tangerine allows you to change your withdrawal limits through their website or app.
Options for large withdrawals
If you need to withdraw a large amount of cash, you have several options:
- Visit your bank branch in person and withdraw the funds from a teller (most secure for large amounts)
- Withdraw the maximum amount over several days to stay within your daily limits
- Call your bank and request a temporary increase in your limit
- Use Interac e-Transfer to transfer funds to another account, if possible
Closing a bank account: the process and best practices
While opening a bank account is your first priority as a newcomer, understanding how to close an account properly is also important to avoid unnecessary fees and problems in the future.
Closing process
The process of closing a bank account in Canada varies depending on the bank, but the general steps include:
Step 1: Contact your bank
Even if you plan to close your account online, you still need to contact the bank and inform them of your intention to close the account. You can contact them by calling customer service, sending an email, visiting a branch, or even sending a letter.
Step 2: Cancel all automatic payments and direct deposits
Before closing your account, make sure you cancel all automatic payments (utilities, insurance, subscriptions, etc.) and redirect all direct deposits (paychecks, government payments) to your new account. This is critical because if a payment tries to go through after your account is closed, you may be charged an NSF (insufficient funds) fee, which can be around $50.
Step 3: Review and pay any outstanding fees
Review your last statement and make sure all outstanding fees or charges have been paid. If you have a negative balance or overdraft, it must be paid off before closing the account.
Step 4: Submit a formal request to close the account
You can submit your request online (via secure mail in online banking), by phone through customer service, or in person at a branch. For some banks and account types, a personal visit is required.
Step 5: Transfer or withdraw any remaining funds
Before the account is closed, you must transfer or withdraw any remaining funds. You can transfer them to your new account or ask the bank to issue you a check for the balance.
Step 6: Wait for confirmation
Once you have completed all the steps, wait for official confirmation from your bank that the account has been closed. Keep all documentation and communication with the bank regarding the account closure—this may be useful in case of any disputes or issues later on.
Account closure fees
Account closure fees vary by bank:
RBC: Free if you close within 15 days of opening; $20 fee if you close after 15 days, but the fee is waived if you close the account in person at a local branch.
BMO: $20 if you close within 90 days of opening; also $20 if you have a remaining balance that needs to be transferred to another bank.
CIBC: $19.50 to transfer your balance upon closing if you don't do it yourself in advance.
TD: Varies depending on account type and closure method.
Best Practices
Best practices for avoiding problems when closing an account include:
- Open your new account before closing your old one to avoid missed deposits or payments
- Keep your old account open for one to two months after transferring all automatic payments to ensure that all transactions have been transferred to your new account
- Keep a list of all automatic payments and direct deposits for tracking purposes
- Keep confirmation of account closure for your records
Final recommendations and strategies for successful banking in Canada
Successful integration into the Canadian banking system requires a strategic approach and constant attention to optimizing your finances. Here are key recommendations for maximizing the benefits of your banking relationship.
The right combination of accounts
For most newcomers, the optimal strategy includes:
- A free or low-cost chequing account for everyday transactions (consider Simplii or Tangerine for a free option, or take advantage of special programs for newcomers from major banks)
- A high-interest savings account or HISA for your emergency fund and short-term goals (EQ Bank offers the best stable rates)
- A TFSA for long-term savings once you've built up a sufficient emergency fund
Maximizing the benefits of newcomer programs
Take full advantage of the 12-month fee-free period offered by most major banks. During this time, actively use all banking services to understand what you need. A few months before the end of the free period, reassess your needs and consider switching to a more economical option if fees start to apply.
Aggressively build your credit history
Apply for a secured credit card immediately after opening a bank account. Use the card for small purchases each month and always pay the full balance on time. This is the most effective way to quickly build credit history in Canada. Check your credit score regularly through free services such as Borrowell or Credit Karma to track your progress.
Automate your savings
Set up automatic transfers from your checking account to your savings account immediately after each paycheck. Even a small amount, such as $100 every two weeks, adds up to $2,600 per year plus interest. Automation makes saving painless and ensures that you pay “yourself first” before spending on anything else.
Use technology
Download your bank's mobile app and set up alerts for important transactions. Enable biometric authentication for security. Use the budgeting features in the app (if available) or third-party apps such as Mint or YNAB to track your expenses and income.
Regular review and optimization
Review your bank statements quarterly and analyze:
- Are you paying unnecessary fees?
- Can you downgrade your account or switch to a free online bank?
- Are you getting competitive interest rates on your savings?
- Whether your current banking structure is working effectively for your needs
Conclusion
Opening and managing a savings account with a Canadian bank is a fundamental part of your success as a newcomer. With the right knowledge, a strategic approach, and a constant focus on optimization, you can build a solid financial foundation in Canada, maximize your savings through compound interest and CDIC protection, and create a platform for achieving larger financial goals, such as buying real estate, investing, or planning for retirement.