Immigrants are usually advised to take deliberate steps when managing their finances. This should start before arriving at the shores of your preferred destination. Having an understanding of how the Canadian financial ecosystem works will answer some of your questions and help you to get settled.
Even though the Canadian banking system is touted as being the best in the world, it’s not entirely free. The good thing is that new immigrants are open to many secured options and can enjoy free access for the first year.
This article will help you to get familiar with the Canadian banking landscape. Let’s delve right into it.
How to Open a Bank Account
You can open a Canadian bank account whether you are already in the country or not. The bottom line is to have the necessary documentation that shows your real identity and your status in Canada. The next thing is to get in touch with any major bank in Canada to create a new account.
Types of Canadian Bank Account
The major types of Canadian bank account include saving accounts and chequing accounts.
- Chequing account
This type of account will come in handy for daily transactions and comes with little or no interest. Most Canadian employers pay their employees’ salaries into their chequing accounts.
- Savings account
Saving accounts are useful for keeping money meant for achieving certain goals. This account has a higher interest rate. Several banks support the movement of funds between both types of accounts without any charges.
Bank accounts can also be categorized based on an immigrant’s current needs. For instance, a basic account is perfect if you tend to make a few transactions per month. This type of account may be free or attract a small charge.
However, you can consider opening a bank account with a higher level of flexibility if you conduct more transactions monthly. If you opt for this type of bank account, get ready to pay a higher monthly fee. Be rest assured that you will get an affordable option if you shop around.
Once you’ve opened your Canadian bank account successfully, never share your banking information with anyone.
Here are some of the documents that are essential for opening a Canadian bank account:
- A foreign passport.
- A Canadian driver’s license.
- A Certificate of Canadian Citizenship.
- A Permanent Resident card.
Building an Impressive Credit History
Your credit history will reveal how you pay back your debt. Failing to pay on time can hurt your credit rating and it may be nearly impossible to borrow more money in the future.
Individuals who maintain good credit history tend to meet both their short and long term financial goals. You can take a look at your credit history in your credit reports which are managed by certain agencies.
Check out some of the mistakes you should avoid after getting your credit card:
- Exceeding the credit card limit.
- Applying for multiple credit cards.
- Not paying credit card bills on time.
- Impulse buying.
Bear it in mind that many recruiters will conduct a credit check on each prospective employee before hiring.
Tax-free Investment Options
All fresh immigrants have access to some tax-free investment options which are provided as a result of a partnership with the Canadian government. A typical example is the Tax-Free Savings Account (TFSA).
You need to have a valid Social Insurance Number (SIN) and be at least 18 years old to apply for this financial product.
Conducting International Transactions
New immigrants who want to send funds to their loved ones in a different country are free to take this step. Such transactions are referred to as remittances and will attract a certain fee.
If the recipient is yet to open a bank account, you can send money via transfer services. The reputable ones support transferring money to any country within minutes.
Lastly, online money transfer companies exist for sending money to another country from any bank account.