Why Open a Bank Account?

It's safe and cheap

  • A bank account is safer than carrying cash
  • Many bank accounts are cheap and some bank accounts have no fees
  • It's free to cash cheques, so you can stop paying cheque cashers
  • Banks offer much lower rates for credit than payday lenders

Access your money 24 hours a day, 7 days a week

  • Set up direct deposit so your pay goes directly into your bank account
  • Pay bills online
  • Withdraw money from a bank machine (ATM)
  • Transfer money to friends/family via email (within Canada)
  • Check your account balance at any time

Everyday Banking Terms

Branch

The places you go to meet with your bank representative (e.g. to open an account). Find a Branch

Transaction

A transfer of money into or out of your bank account

In-branch
transaction

Transactions you conduct at a branch with the assistance of a bank representative (e.g. Money order)

Self-Serve
transaction

Transactions you conduct via ATM, telephone, online or with a debit card

ATM (automated teller machine)

Machines you can use to deposit cheques and withdraw cash. Find an ATM

Debit Card

Plastic card that allows you to pay for items at a store, use an ATM or access online banking

Online banking

Websites that allow you to access your bank account, pay bills and transfer money over the Internet

Telephone banking

Access your account balance and conduct certain transactions using telephone prompts

Chequing account

Account you can use for everyday transactions, such as cashing or writing cheques. These accounts typically do not earn interest

Savings account

Account you can use to save money that you don't need for everyday transactions. These accounts typically earn interest

Minimum balance

The minimum amount of money you're required to keep in your account at all times to avoid paying a monthly fee

Pre-authorized payment

Payments that are automatically withdrawn from your bank account on a regular basis (e.g. car payments)

Cheque

A written order on a specially printed form that allows a specific amount of money to come out from an account and to be paid to a person or business.

Personal Identification Number (PIN)

A private and confidential password, usually four digits, that you create to access your bank account.

Deposit

Money or cheques put into your account at your bank or other financial institutions.

Overdraft

When you withdraw more money than you have available in your account, the excess is known as overdraft.

Common Challenges

Under Canadian law, you have the right to open a personal bank account at a federally regulated financial institution even if you don't have a job, have poor credit, have been bankrupt or don't have money to put into your account right away. Credit unions and other provincially regulated financial institutions are not required to provide a customer with a bank account (for example, they can refuse a customer based on poor credit).

Where can I get help if I have poor credit?

The first thing to do is to get a copy of your credit report. You can get a free copy of your credit rating report mailed to you from either of Canada’s credit bureaus: Equifax and TransUnion. For a charge, and if you have a credit card, you can also get your credit report instantly online.

Not-for-profit credit counselling agencies offer free services to help with debt and credit issues. You can meet with a credit counsellor to discuss all the options available to you to manage debt and improve your credit situation. Money Mentors offers not-for-profit credit counselling services in Alberta.”

Even if you have an outstanding overdraft, you have the right to open a personal bank account at a federally regulated financial institution.

You have the right to open a personal bank account at a federally regulated financial institution even if you have a criminal record as long as it is not a crime related to a financial institution.

Don't have the required ID to open a bank account? No problem. You can open a bank account with any two pieces of ID from List A, or one piece of ID from list A and one piece of ID from list B.

List A

  • Valid driver's license issued in Canada ?
  • Social Insurance Number (SIN) card ?
  • A provincial or territorial health insurance card ?
  • Document or card with your photograph and signature issued by any of the following authorities: ?
    • Alberta Registries
    • Department of Community Government and Transportation of the Territory of Nunavut
    • Department of Government Services and Lands of the Province of Newfoundland and Labrador
    • Department of Service Nova Scotia and Municipal Relations
    • Department of Transportation and Public Works of the Province of Prince Edward Island
    • Department of Transportation of the Northwest Territories
    • Insurance Corporation of British Columbia
    • Saskatchewan Government Insurance
    • Service New Brunswick
  • Valid Canadian passport
  • Old Age Security card issued by the Government of Canada
  • Birth certificate issued in Canada
  • Certificate of Indian Status issued by the Government of Canada
  • A Permanent Resident card or Citizenship and Immigration Canada Form IMM 1000 or IMM 1442

List B

  • Employee identity card, issued by an employer that is well known in the community, with your photograph
  • Bank or automated banking machine or client card, issued by a Canadian bank or credit union, with your name and signature
  • Credit card, issued by a recognized banking institution, with your name and signature
  • Canadian National Institute for the Blind (CNIB) client card
  • Foreign passport

FAQS

Banks can put a hold on non-government cheques up to a maximum of five days to ensure there are funds in the account from which the cheque is written. Typically, as you build a history with a bank, they will reduce hold times on your cheques. There are no holds on federal government cheques up to $1,500 or on electronic transfers of money such as direct deposit or account transfers.

Your bank account will positively impact your credit rating if you add overdraft protection to your account or line of credit, and if you promptly pay back loans. A bank account will negatively impact your credit rating if there are outstanding amounts owed to the bank or if you write bad cheques due to insufficient funds in your account.

Not if your credit accounts remain in good standing. Yes, if you have delinquent accounts at another financial institution (e.g. a credit card in collections), then that financial institution can obtain a court order to recover funds from your bank account. Also, if you have borrowed money from the same bank at which you have a chequing or savings account, your bank may have an"offset" clause that allows it to access your account in order to recover funds for unpaid credit, without a court order.

Wages can be garnished from your bank account if there are amounts owing. The Alberta government runs a Maintenance Enforcement Program (MEP) to collect funds owed for child support payments. The MEP will send support deduction notices (SDN) directly to employers to collect funds owing. An employer must comply with an SDN, and in effect, garnish wages from an employee who owes child support.

Different banks charge different fees, so make sure you compare them before opening an account. Below are the different types of fees a bank may charge:

  • Transaction fees - Fees charged per transaction
  •  ATM fees - The cost to withdraw money from an ATM. Typically this is free within the bank's own network (e.g. a BMO customer using a BMO ATM), but there is a charge when an out-of-network ATM is used (e.g. a BMO customer using an RBC ATM)
  •  Monthly fees - Monthly fee charged by the bank to maintain the account
  • NSF (not sufficient funds) fees - A fee charged if a customer writes a cheque over the amount the customer has in his/her bank account (e.g. $10 cheque when there is only $5 in the account)
  • Stop payment - Fee charged to cancel a post-dated cheque
  • Email money transfer - A bank may charge a fee for transferring funds via email

Federally regulated financial institutions include: Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), Canadian Western Bank, Bank of Nova Scotia (BNS), HSBC Bank Canada, Tangerine, National Bank of Canada, President's Choice Financial, Royal Bank of Canada (RBC), Toronto Dominion Bank (TD), among others.

  • 1. The bank must give you a letter saying that it will not open an account for you. If you do not receive it, ask for it. The bank must also tell you how to contact the Financial Consumer Agency of Canada (FCAC).
  • 2. Tell the bank you want to make a complaint. By law, all banks must have a complaint-handling process.
  • 3. Call FCAC toll-free at 1-866-461-3222 for more information.

Videos

Welcome message

Welcome to Banking For All. Watch this quick introduction video to learn how this site will help you find the right bank account for your money.

Holds

If you have not yet built a relationship with your bank, you may need to wait to have access to all of your money once you have cashed a cheque. Nonetheless, there are options that may allow you to access your money right away. To learn more about how cheque holding works, watch our Hold on Cheques video.

Why open a bank account?

Using a bank account saves you money and helps you build your financial future. Watch our Why Open a Bank Account video to learn more about the benefits of using bank accounts.

Banking Basics

Understanding the fees associated with using bank accounts can be tricky. To learn more about basic bank fees, watch the Banking Basics video.

What if I have a criminal record?

Are you worried about using a traditional bank because of past convictions? Every Canadian has the right to open a bank account. Watch our video on Criminal Records and Bank Accounts for more information.

Owing someone money

Sometimes, if you owe the government or a bank money, they may be able to take money out of your account to pay themselves back the money you owe. You will not lose your whole deposited amount, but a portion of your deposited money may be taken to pay back debt. To learn more about using bank accounts when you owe someone money, please watch our video on debt payments.

Choosing a Bank Account

There are many different types of accounts and services available at the bank, and choosing the right product for you and your money can be confusing. For some tips on how to choose the right bank account for you, watch our Choosing a Bank Account video.