In Canada, you have the right to open a personal bank account even if you:
- do not have a job
- do not have money to put in the account right away
- have poor credit rating
- have been bankrupt
To open a bank account, you can go to the bank in person and show them documents that prove who you are. The documents you show must be originals (not photocopies), be in good condition and not be expired.
You can also apply to open a bank account online.
Main types of bank accounts
Chequing accounts let you write cheques and usually include the use of a debit card. You will need one if your employer uses payroll deposit.
If you want to save money, savings and investment accounts are helpful. They have higher interest than chequing accounts. You should ask your bank for more information about savings and chequing accounts.
There are many investment opportunities available in Canada. To learn more about investments, contact your bank or consult the Financial Consumer Agency of Canada (FCAC) website.
In Canada, you can use cheques:
- to pay bills by mail
- to pay larger amounts (for example, your rent)
- where credit cards or direct payments are not accepted
You need to have enough money in your account when you write a cheque. If not, the cheque might be returned to you for non-sufficient funds (NSF). Your bank will charge you a fee.
Your bank may apply a “hold” (a waiting period) on money you deposit by cheque. If you need to get your money sooner, you can speak with your bank to see if they can shorten the waiting period. You can also ask your employer or other organizations to deposit funds directly into your account. This way, no hold will be placed on the funds. If the cheque is from a bank or other financial institution located outside Canada, the cheque can take much longer to clear. Foreign cheques are often held for 30 days.
You have a right to cash a cheque from the federal government free of charge at any bank. You can also cash it at bank branches where you are not a customer, as long as the cheque is for $1,500 or less and you show them documents that prove who you are.
Other common types of cheques are:
Post-dated cheques: These are cheques that have a future date written on them (they are usually used to pay for rent). Post-dated cheques cannot be cashed until the date that is written on them, and you can cancel cheques that have not been cashed by calling your bank.
Certified cheques: These are cheques that have been guaranteed by your bank.
Applying for a credit card
You can apply for credit cards at most banks either online or in person. Credit cards let you spend money on credit and be billed for it within a month. If you pay the full amount back by the due date, you will not be charged interest. If you use your credit card for cash advances, you will be charged interest starting on the date you withdraw the money and continue to be charged interest daily until you pay off the entire cash advance amount.