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Banking in Canada

In this section, we will explain how banking in Canada works, and provide useful terms and definitions that may help you understand our system. 

Getting started

  • Selecting a bank

    There are several banks in Oshawa. Choose a bank that is nearby and convenient for you to use. To look up the banks available, conduct an Internet search for Banks in Durham Region or Banks in Oshawa.  

    Most Canadians are customers of one of the Big Five chartered banks. Each one has extensive nationwide coverage and many offer international services:

  • Opening a bank account
    Do your research

    There are a few factors to consider when opening a bank account. Make sure to check all of the following before opening any account:

    • Exchange rates – especially if your family is sending you money from home or you intend to send money home (ensure you get a good rate)
    • Handling fees
    • Interest rate on credit cards 
    • International money transfer options and associated fees
    • Minimum monthly balance
    • Monthly and annual fees
    • Online banking options (this includes timelines to process a transaction online and fees per transfer)
    • Overdraft amount and penalties
    • Record-keeping fees
    • Telephone banking options
    • Transaction fees
    Required documents to set up a bank account 

    As an international student, you are required to have:

    • A study permit.
    • Two pieces of government ID (International passport, driver’s licence or Ontario ID).
    • Verification of Enrolment Letter.
    • Canadian postal address and phone number. 
    • A fixed deposit (this depends on the bank).
    Please note: If you are an exchange student here for six months or less, you likely do not have a study permit, so opening a bank account can be difficult. If you need assistance, contact us.

Credit cards

  • Factors to consider when applying for a credit card
    • Compare interest rates of credit card companies.
    • Look for annual fees (which you will be charged, whether you use the card or not).
    • Look at how the interest is compounded. Do you start paying interest the moment you make a credit card transaction, or is there a grace period where no interest is charged (typically 21 to 25 days)?
    • Does it come with travel or other forms of insurance?
    • Does it come with cash advances? This is a transaction that allows you to change your credit into cash. There is usually a fee associated with this service which you should inquire about. 
    • Some credit cards will offer extra savings in order to get your business.
      • For example, they may waive interest for a certain number of months on your purchases or provide a very low interest rate for your first year of use. 
      • Some offer Student Price Card (SPC) that gives discounts at select stores and restaurants. 
  • Credit card companies

    There are many credit card companies. Below is a list of a few of your options:

    • American Express
    • Bank of America
    • CapitalOne
    • CitiBank
    • MasterCard
    • Visa

    The documents required to set up a credit card vary greatly from one company to another, so inquire with each one.


Terms and definitions

  • Terms and definitions

    Available credit: Your credit limit minus your credit card balance equals your available credit.

    Bank draft: Refer to a Money order.

    Credit card: Can be used as a form of payment. You are given a credit limit and can spend up to that limit. Each month, you are required to make a minimum payment depending on the balance of your card. 

    Credit card balance: The amount of money you have borrowed on your credit card. 

    Interac: A way in which businesses and banks in Canada transfer money from accounts electronically. When you use your debit card to purchase an item in a store, you are making an Interac transaction. 

    Credit limit: The maximum amount of money you have available to spend on your credit card. 

    Certified cheque (or certified check): A form of cheque where the bank guarantees to the recipient that you have the money available to cover the cheque. Once the bank has verified your account has the funds to cover the cheque amount, the bank sets the funds aside in the bank's internal account until the cheque is cashed or returned by the payee.

    Debit card: you have already deposited the money into your account and are using your own money.

    Handling fees: Fees associated with ATM withdrawals not made at your own bank.

    Interest: This is the additional money you need to pay on top of the money you borrowed on your credit card.

    Interest rate: The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

    Minimum monthly balance: The minimum amount of money you need to keep in your account at all times to avoid getting hit with a monthly fee. 

    Minimum payment: The amount of money you are expected to pay on your balance for a given period of time (typically each month).

    Money order: A payment order for a pre-specified amount of money. The funds must be prepaid for the amount shown on it. There is a charge associated with getting the bank to issue a money order. They typically ask who the money order is addressed to, and include this person’s name on it. That way, the individual (or company) is the only one who can access the funds when they take the money order into the banking institution. It is a much safer method of payment than a regular

    Monthly and annual fees: Fees deducted every month directly from your account.

    Online banking: Lets you manage your money when it's convenient for you. You can view balances and transactions, pay bills, stop cheques, transfer funds between accounts, send cash electronically and much more over the Internet. You typically need to set up the online banking function when you set up your bank account.

    Overdraft: An extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it. Basically, the bank allows people to borrow a set amount of money. For example, your banking institution may allow a $200 overdraft (you can withdraw $200 even if your debit account is empty).

    Record-keeping fees: Fees associated with keeping all your transaction details.

    Transaction fees: Fees associated with every transaction. For example, every time you use your debit card in a store to make a purchase or pull out cash from a machine, this counts as a transaction and you may be charged a fee.