Comparing the Best Bank Accounts in Canada
Canadians looking for their ideal bank account should understand that there’s no one-size-fits-all option.
Annual income and overarching financial goals, amongst an array of other factors, all play pivotal roles in landing upon an ideal place to store your money. Furthermore, the directions you take now might need adjusting a few years down the line.
Plus, there are matters such as free Interac e transfers, monthly fees, annual fees, other bank fees, minimum balance requirements, and rewards programs worthy of consideration. We won’t touch all these issues, but many of them will come up throughout this web page.
There’s a wealth of banks in Canada offering plenty of viable choices – depending on your needs.
Find the Banking Products that Make Money for You
Below, we’ll compare bank accounts in Canada that offer a variety of perks and advantages:
Chequing accounts are the most integral facet in your day to day banking.
In a sense, chequing accounts are akin to the pawns on a chessboard—the first line of defence. They’re involved in ATM transactions, bill payments, money transfers, and point-of-purchase sales.
You wouldn’t be alone thinking that once you’ve used one chequing account, you’ve used them all. However, some differentiating factors throughout the Canadian banking world might have you leaning toward specific financial institutions.
For example, Simplii Financial offers the best no-fee chequing account. Additionally, while CIBC has an ideal account for students, and Scotia Bank provides the best rewards program.
Are you looking for a secure place to store your cash for the short term (and maybe a bit longer)?
Then it would be best if you began looking at which Canadian bank is best for savings accounts.
Generally, you should consider traditional savings accounts for more immediate purposes, including an overseas getaway, home renovations, or an emergency fund.
These options differ from chequing accounts because they are not meant for withdrawals and daily purchases.
Savings accounts are available at every reputable financial institution across Canada, commonly opened alongside your chequing account. Most advantageous is that any market volatility doesn’t impact these accounts. Plus, you’re able to withdraw your money at any point without being penalized.
If you’re looking for the best savings accounts in Canada, Scotiabank is an excellent no-fee option.
High-Interest Savings Accounts
Unlike standard savings accounts, a high-interest savings account allows you to earn substantially more on interest.
Since many traditional savings accounts offer rates as low as 0.05%, it fails to keep up with inflation. Thus, your money loses buying power by staying in that account. Conversely, a high-interest savings account comes with rates that remain ahead of inflation and help you earn extra money on top of your contributions.
Are you seeking out the best high-interest savings account?
Look to Oaken Financial, which offers a rate of 1.5%.
Tax-Free Savings Accounts (TFSA) allows you to invest money from various financial instruments. From stocks, bonds, and exchange-traded funds, to cash savings, you have plenty of options with what goes into your TFSA.
The philosophy behind a TFSA is to stop you from paying anything additional for withdrawing money you’ve already paid taxes on.
Unlike the other accounts presented, a TFSA is something primarily dedicated to your retirement. Unlike an RRSP, there are no penalties for early withdrawals. However, RRSPs come with the benefit of deductible contributions for your income taxes, which does not exist for TFSA contributions.
Our recommendation: For a minimum deposit of $500, People’s Trust offers a rate of 1.65% for a TFSA.
How to Open a Bank Account Online in Canada
Due to factors such as convenience, features, and pricing, it should be no surprise that more than 76% of Canadians have shifted to online banking.
With that said, here’s a breakdown of how to open an online bank account in Canada:
Step 1: Do the research and find the right bank account for you.
Step 2: After finding a good fit, fill out the required application.
Step 3: You’ll have to verify your identification—generally, a government-issued ID through your phone will suffice. Still, some financial institutions require you to confirm who you are in person.
Step 4: Generally, you’ll have to leave a deposit with your debit card, or an account and institution number for an existing bank account. Cash will also work if this is your first account.
After this, you’ll usually receive a debit card in the mail.
Bank Accounts in Canada – FAQ
Below are some frequently asked questions about Canadian bank accounts:
What do you need to open a bank account?
First and foremost, to open a bank account in Canada, you need to be a national resident with a residential address.
Many banks do let minors open accounts if they’re with a guardian. But you usually must be at least 18 years old, or whatever the age of majority is in your province.
You’ll then require government-issued ID (e.g., passport or driver’s license), which you might need to scan for verification purposes.
Some banks don’t require an initial deposit, but you sometimes might need some initial cash to put down.
How do you transfer money between banks online?
Here’s how to transfer money between banks online:
First, log into your online account of the first bank. Then, find “Account Services & Settings” (or its equivalent) before selecting “Manage External Accounts.” From there, click whichever option equates to “Add External Account.”
Now you can input your account and routing numbers, click continue, and follow the necessary prompts. Lastly, decide on the transfer amount and frequency before sending the money.
What is the difference between a chequing and savings account?
If you need an account for everyday transactions (e.g., purchases, bill payments and ATM withdrawals), then chequing accounts are ideal. The interest earned in these accounts is negligible.
Alternatively, savings accounts are ideal for money storage, comparatively earning more interest than their chequing counterpart. They often come with a monthly withdrawal limit before fees come into play.