As a newcomer to Canada, one of the things that might surprise you about banking in this country is that you often have to pay a monthly fee just to hold a bank account.
This can be a shock given that in other countries bank accounts don’t necessarily come with a monthly fee, and in fact, they sometimes even pay interest on standard deposits.
According to a recent report by the Alberta-based think tank, North Economics, Canadian retail banking customers incur higher fees compared to their peers in Australia and the UK.
After all, in addition to a monthly maintenance fee, Canadians often have to pay additional fees for electronic transfers, accessing ATMs, excessive debit charges, and other transactions.
Despite this abundance of potential fees, the good news is that there’s a way to circumvent these charges, especially as a newcomer to the country: no-fee bank accounts.
In this article, we’ll take a look at the best no-fee bank accounts for newcomers to Canada to help you make educated choices about your banking needs.
Choosing a No-Fee Bank Account
When it comes to opening a new bank account, there are lots of things to consider.
When looking exclusively at no-fee bank accounts, your options will be more limited, but there are certainly some excellent options to choose from. We’ll go over these below.
The first step when choosing a bank and bank account is to decide whether you prefer a more conventional bank with physical locations or whether you prefer a digital-only banking option.
Canada’s five biggest banks are Bank of Montreal (BMO), Scotiabank, Canadian Imperial Bank of Commerce (CIBC), Royal Bank of Canada (RBC), and Toronto-Dominion Bank (TD), collectively known as the “Big Five.”
These conventional banks have the advantage of a physical brick-and-mortar presence that makes it easy to request bank drafts, stamped bank statements, or other important documents.
None of the Big Five banks offer a no-fee chequing account; however, most of them offer a fee waiver on your first year through their newcomer programs and packages.
Generally speaking, a basic bank account with a conventional bank, offering a limited number of transactions, will cost you about $5 (all figures in CAD) a month.
Alternatively, there are mid-range account options for around $10–15 a month, and there are “all-inclusive” packages with unlimited transactions and additional perks that cost $20–30 a month.
If you don’t feel the need to bank in person, then an alternative to these conventional banks is digital banks, which usually don’t charge a monthly fee on their chequing accounts. By not having physical bank buildings, the digital banks save money and pass those savings along to you.
Some of the digital banks in Canada are subsidiaries of one of the Big Five banks, as is the case with CIBC’s Simplii Financial and Scotiabank’s Tangerine, while some digital banks are entirely autonomous organizations, like EQ Bank.
Since digital banks don’t have a physical presence, they generally don’t offer branded ATM access; however, some of the subsidiary digital banks allow clients to access the parent bank’s ATMs.
For example, if you have a bank account with Tangerine, you’ll be able to access Scotiabank’s ATMs for deposits and withdrawals.
You may find that it’s difficult to bank exclusively with a digital-only bank given the limited access to ATMs; however, this will depend on your specific banking requirements.
The Best No-Fee Bank Accounts for Newcomers to Canada
Once you’ve chosen what type of bank you prefer (digital or physical), you need to then decide which bank account(s) you’d like to open based on your unique banking needs and priorities.
In the context of this article, we’re looking exclusively at the best no-fee bank accounts for newcomers to Canada, so let’s dive in!
Scotiabank Preferred Package
Scotiabank, also known as the Bank of Nova Scotia, is one of Canada’s Big Five banks and has around 900 branches scattered across Canada.
Scotiabank is a good choice if you’re new to Canada, since it’s developed a program specifically for newcomers called StartRight. The program offers incentives on bank accounts, investments, money transfers, and credit cards.
As part of the StartRight program, you can receive a monthly fee waiver on the Preferred Package for one year. As detailed below, the Preferred Package comes with a host of features that you need as a newcomer, chief among them unlimited Interac e-transfers.
Scotiabank’s Preferred Package offers the following benefits:
- Unlimited debit card and Interac e-transfers
- Fee waived on one non-Scotiabank ATM withdrawal per month in Canada
- First-year annual fee waiver (up to $150) on select credit cards
- Send money globally for $1.99 with Scotia International Money Transfer
- Enrolment to the Scene+ rewards program
In addition, as a new Scotiabank client, you can receive a welcome bonus of up to $350 in cash. To qualify for the bonus, you must fulfill two of the following:
- Set up an eligible automated direct deposit, such as payroll, that recurs for a minimum of six consecutive months
- Set up at least two separate eligible pre-authorized transactions with a minimum value of at least $50 each that will recur monthly for a minimum of six months
- Make an eligible online bill payment of at least $50 through the Scotiabank Mobile App or through Scotia OnLine
To get your monthly fees waived, your account must already be open and in good standing. Then, you must visit a Scotiabank branch to enroll in the StartRight program.
In all, the Scotiabank Preferred Package is a good choice for newcomers, since it offers a fee waiver, unlimited transactions, and a juicy cash welcome bonus.
BMO Performance Chequing Account
BMO, or the Bank of Montreal, is another one of Canada’s big five banks, with almost 900 branches nationwide.
BMO prides itself on being an ideal choice for newcomers and this is showcased through its NewStart program that caters to permanent residents, foreign workers, and international students.
The NewStart program aims to set up newcomers with banking products they might need.
One of BMO’s flagship products is the Performance Chequing Account. As a newcomer, you’ll pay no monthly plan fees on this type of account for one year.
BMO’s Performance Chequing Account also comes with the following features:
- Unlimited debit and Interac e-transfers
- Fee waived on one non-BMO ATM withdrawal per month in Canada
- Up to a $40 rebate on the annual fee for select BMO credit cards
- Send unlimited BMO Global Money Transfers for no fee
In addition, you can earn up to $350 in cash as a welcome bonus when you open your new account. To be eligible for the bonus, you must fulfill two of the following:
- Set up a recurring direct deposit, such as your payroll
- Make two eligible online bill payments of at least $50 to different billers
- Set up two eligible pre-authorized debits of at least $50 to different billers
If you open a BMO Savings Amplifier Account at the same time, you can earn a further $200 by making a deposit of $10,000 or more. But keep in mind, you must maintain this balance for a predetermined period of time as stated in the terms and conditions.
The BMO Performance Chequing Account is a great choice for newcomers thanks to it offers a fee waiver and a lucrative welcome bonus.
Tangerine No-Fee Daily Chequing Account
Moving on to digital banks, Tangerine is a subsidiary of Scotiabank; though, unlike its parent company, it doesn’t have any branches of its own.
While Tangerine doesn’t have a specific newcomer program, we think it’s suitable for foreign workers, international students, and permanent residents nonetheless since its No-Fee Chequing Account offers free and unlimited transactions.
Plus, should you want to make a cash deposit or withdrawal, you can use your Tangerine Visa debit card at any Scotiabank ATM thanks to the relationship between the two banks.
Additionally, when abroad, you can withdraw cash with no access fees through the Global ATM Alliance, which includes Bank of America (US), Deutsche Bank (Germany), and Barclays (UK). However, your withdrawals are still subject to foreign conversion fees.
Despite the fact that Tangerine offers everyone a no-fee account, it still lets you earn up to a $500 bonus as a new client.
When you open both a no-fee chequing account and savings account at the same time, you’ll be eligible for the following offers:
- 20% cash back on eligible online Visa Debit transactions when you shop online or in-app for 60 days (up to $400 cash back)
- $100 cash bonus when you set up automatic transfers between your chequing and savings account within 60 days of becoming a new client (at least $50 two months in a row)
- 5.75% savings rate for five months on up to $1,000,000 in deposits
Once again, the Tangerine No-Fee Chequing Account offers free and unlimited transactions, plus a sizable cash back bonus as a welcome offer, making this a great choice for a no-fee newcomer bank account.
EQ Bank Personal Account
The next digital bank we’ll look at is EQ Bank.
EQ Bank markets its Personal Account as an account that “acts like chequing, earns like savings,” since it uniquely offers 4% interest on chequing account deposits.
EQ Bank, like Tangerine, doesn’t have a newcomer program; however, with its Personal Account, you’ll get unlimited transactions and a free EQ bank card, plus, there are no monthly fees or minimum balance requirements.
As a wholly digital bank, EQ Bank has some potential drawbacks that are important to be aware of.
Perhaps the biggest drawback is that since it’s wholly a digital bank you can’t do in-person banking at all. This can particularly be an issue if you need to deposit cash.
Additionally, EQ Bank doesn’t operate its own ATMs. In Canada, you can withdraw at any ATM and get reimbursed for the fees; however, when you use international ATMs, EQ Bank won’t reimburse you if the ATM you’re using abroad charges an access fee.
Based on the pros and cons we’ve explored, consider EQ Bank if you’re comfortable with a digital-only bank, and you’re looking for the simplicity of unlimited transactions and no-fee banking with the added bonus of a 4% interest rate.
Simplii Financial No Fee Chequing Account
Simplii Financial is the digital banking arm of CIBC, another of Canada’s Big Five banks.
Simplii wants to be the bank of choice for newcomers, so it has been launching initiatives to be top-of-mind among this demographic. For example, they recently tapped Indian music and film star Diljit Dosanjh to be their brand ambassador.
Like Tangerine and EQ Bank, Simplii offers a chequing account that charges zero fees for account maintenance, transactions, and the use of CIBC ATMs.
Simplii also currently offers a welcome bonus of $400 cash when you open a No Fee Chequing Account. To earn this welcome bonus, all you need to do is add an eligible direct deposit (such as your payroll) amounting to at least $100 a month for three straight months.
Additionally, if you choose to open a no-fee High Interest Savings Account at the same time, your deposits will earn a special 6% interest rate for five months.
One of the most notable features of banking with Simplii is that as a newcomer, you can open a No Fee Chequing Account even if you don’t yet hold Canadian-issued identification.
You can even apply for a bank account online before you arrive in Canada. To do this, you’ll need your port of entry letter stating that you’re coming to Canada as a worker, student, or permanent resident.
We think Simplii is a good choice for newcomers given its no-fee banking, strong welcome bonus, its relationship with CIBC, and the fact that you can apply for an account prior to receiving Canadian ID.
Conclusion
The cost of banking in Canada can come as quite a shock for many newcomers, with banks often charging a monthly fee to cover account maintenance and various transactions and services.
Fortunately, as we’ve explored above, there are ways to avoid paying account fees as a newcomer.
Whether you take advantage of newcomer bank accounts and products or you choose a no-fee account with a digital bank, we hope that the information we’ve provided is helpful in your efforts to set up your new bank account.
