How banking works in Canada

Firstly, you’ll need to decide which type of bank account you want to open, since most banks offer a variety of chequing accounts and savings accounts Opens in a new window.. You'll probably want one chequing and one savings account.

Chequing account: This account is for managing your everyday spending such as shopping, cash withdrawals and bill payments. Chequing accounts usually have fees, but sometimes these are waived for the first 12 months.

Savings account: This type of account is ideal for storing money that you don’t plan to use regularly. This money may be put away to save for a family trip or a down payment on a house. When you place money into a savings account, it’ll grow by earning interest. However, if you urgently require the money, you can take it out easily. Find more information on savings accounts.

Automatically deposit money into your account through direct deposit. You can use direct deposit to have an employer deposit your paycheck right into your bank account. With direct deposit, you’ll no longer need to make trips to bank branches to use their ATM.

You can also use direct deposit for the Canada Child Benefit (CCB), any provincial and territorial payments, the Canada Workers Benefit, overpayment of tax, income tax refund, Canada Recovery Sickness Benefit, Canada Recovery Caregiving Benefit, Canada Recovery Benefit and the goods/services tax credit.

Instruct your billing company to set up pre-authorized payments Opens in a new window. (known as PAPs) to automatically remove money from your account for regularly recurring expenses such as bills. This will keep you from forgetting to make the payment or paying it late, which will cost you in interest.

You can also set up pre-authorized debits Opens in a new window. (known as PADs) as another way of paying bills on a routine basis. PADs can be great for making mortgage, insurance and utility payments.

When you open a bank account, you’ll receive a bank card. In Canada, this is known as a debit card and it comes with a Personal Identification Number (PIN) that you choose. You’ll use this card to pay for things and take out cash withdrawals at your bank’s branch or by accessing their ATMs.