One of the realities no one will talk to you about is how much paperwork is involved when you study abroad. From filling out your application form to collecting your study permit, there are key steps you need to take in order to make your dreams come true. Again, the moment you arrive in Canada, there are still things you have to do yourself before classes start.
One of those things is opening a Canadian bank account. This might sound difficult, but it’s actually very straightforward and simple. Please find below the steps we’ve outlined for opening student bank accounts in Canada, including the documents you’ll need to bring and what’s offered by various institutions.
Put together your documents
Before you decide on a bank, we’d would encourage you to have the right documents. Inorder to open student bank accounts, you will need at least two pieces of identification (ID). A proper ID may include your:
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- Letter of Acceptance
- Valid study Permit
- Temporary permit (IMM Form 1442, 1208, 1102)
- Canadian or USA Driver’s License
- Canadian Government Identification Card
- Bank cheques
Some banks will also accept your school-issued student card as valid ID. We would encourage you to bring as many pieces of ID as you can to the bank, just in case.
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Select a bank
Canada operates five major banks and you can find branches in several cities. They are as follows:
- Bank of Montreal (BMO)
- Canadian Imperial Bank of Commerce (CIBC)
- Royal Bank of Canada (RBC)
- Toronto-Dominion (TD) Canada Trust
Other options also include direct banks such as PC Financial and Tangerine, as well as credit unions. All banks offer different accounts and services, but remember to pick one with no service fees. Our favourite is CIBC’s Smart for Students account, which charges no monthly fees and offers unlimited transactions. This account is open to international students as long as they are able to show proof of international student status.
Select your account type(s)
If you are opening just one student account, then make sure it’s a chequing account. This is the account you will use for most of your purchases, so make sure it’s a Canadian dollar account and has no monthly fees.
In addition to chequing, we would encourage you to open a savings account. While some students might question the need for it, a savings account has a good number of benefits. On top of offering higher interest in than a chequing account, a savings account can help you budget your money. Transferring yourself money out of your savings each month can help you stay on top of your spending and develop good habits.
How to use your student bank accounts
Once you’ve chosen a bank and signed up for an account, you will be given a debit card. You will also be given a PIN (personal identification number) to use in accessing your account through an Automated Teller Machine (ATM) or debit machine. Your PIN number is quite delicate and important and is there to protect you against other people trying to break into your account. Make sure you never reveal your PIN to anyone else.
Once your debit card is activated and ready, you will be able to:
- Make debit card purchases at stores and restaurants
- Withdraw and deposit money at ATMs
Most banks and financial institutions equally offer online banking through websites and mobile apps. Online banking allows you the flexibility to access your account at any time. With that, you will be able to check your account balance, make payments, and even transfer cash to another account. Banks typically open Monday to Friday during the day and have limited hours on evenings and weekends. That said, you will most likely rely on online banking but just be careful if you log on using a public device. Don’t let anyone see your password and keep your account information away from prying eyes.
Do Get a credit card
Now that you have opened a Canadian student bank account, you should sign up for a credit card too. In Canada, banks generally offer one of three credit cards: Visa, Mastercard, or American Express. Have at the back of your mind that not every store or restaurant will accept American Express, so Visa or Mastercard are your surest options.
Credit cards are convenient to use, as you do not need to have cash-on-hand inorder to make purchases. The only unfortunate thing is that you will be borrowing money with high interest and debt can quickly go up if you are not careful. So before you sign up for a credit card, carefully go through the terms and conditions. Some banks offer student credit cards but in general, you should try to find one with the lowest possible interest rate. Even if you are not sure you’ll need to use a credit card, it is always a good idea to apply for one to build up your credit rating in Canada. You can find out more about the benefits of having a good credit score here.
Other ones include a student loan or line of credit. These ones generally have much lower interest rates than credit cards, but sometimes require collateral or a safety deposit. If you fail to make payments on your loan, this collateral may be forfeited and you will be charged a higher interest rate. As it is with a credit card, read carefully and make sure you know what you’re signing up for before seeking a loan or line of credit.