If you are a new migrant to Canada, among your major concerns will be how to manage your finances while staying in the country. One of the important conditions for immigrating to Canada is to have sufficient money to meet your expenses.
So, it becomes essential for you to find a way to manage payment expenses like rent, keeping a debit/credit card, groceries, money transfers, and depositing cheques among many others.
For your need to stay on and settle well in Canada as a Canada PR, you will need to learn some important facts about banking and finance in Canada. So, without any more delay, here we go!
The banking system in Canada
If you want to start a bank account in Canada, you will need to provide:
- Passport or another document as identification
- Your Social Insurance Number (if you got one)
- Immigration papers
- Address proof
In certain banks like Scotiabank, you can even use a referral from an existing customer in good standing instead of address proof. For immigration proof, you may use:
- A temporary residency permit
- Your COPR
- Study/work permit
Banks like Scotiabank even allows you to open an investment account online. You can do this prior to arriving in Canada. This can however be done if you are eligible to make your banking simpler.
Once you arrive in Canada, you can open an chequing account you can operate everyday at a branch of the bank. There are many aspects and even differences from the banking system that you are used to that you need be aware of about the Canadian banking system.
5 major banks and some online banks, smaller community banks, and credit unions constitute the banking scene of Canada. Knowing your specific needs as to handling finances will help you choose the type of bank to be a customer of.
Details like the fees charged for services and services provided must be well acquainted with so that you won’t overspend on transactional and monthly fees. In Canada, it’s commonly seen that people keep 2 types of accounts: a chequing account and a savings account. The chequing account can be used to meet recurring and regular expenses like bills. Its transaction fees are lesser or you will get some free transactions granted every month.
Keeping a certain minimum balance in the account could lead to waiving of monthly fees. Savings bank has lower interest rates. This type of account is meant mainly for keeping your savings. If you are interested, try a tax-free savings account where you can save a fixed amount of money annually besides investing it in ways to earn tax-free interest.
Managing money in the household
After banking comes budgeting at home. This is a lot about planning, paying, investing money. Your options include RRSPs, TFSAs, and RESPs. Getting started early on with a financial plan will make affairs pretty perfect for you once you get a Canada PR visa.
Credit and debt
Your handling of credit and debts strategically can lead to your building wealth in time. Credit scores aren’t transferable between countries in Canada. So, your credit score in Canada will have to be built from scratch. If you want to start building credit, start with a credit card and mobile phone. You may, nevertheless, access credit even without a credit history in Canada in a facility some banks like Scotiabank gives.
As for taking debt, be sure that what you are taking is manageable for you. It will need you to be cautious and smart with making your choices.
Safety in financial matters
Let’s be real. Scammers and frauds are everywhere; even in Canada. As a beginner and entirely new to the Canadian banking system, you will be their favorite target. But remember that no bank or financial institution will ask you over call for your card numbers or personal information. Always cross-check with the bank before you reveal any information.
Be thoroughly knowledgeable about who is renting you an apartment or offering you a job.
Remember, it’s COVID time and even otherwise your necessities that need money will need you to be careful and alert to stay safe and resourceful to stay on in Canada. Stay alert, stay smart, and enjoy your life in Canada.
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COPR – Confirmation of Permanent Residence
RRSP – Registered Retirement Savings Plan
TFSA – Tax Free Savings Account
RESP – Registered Education Savings Plan