Choosing the right bank account in Canada can feel complicated, especially if you’re new to the country or are studying here. What’s right for you will depend on your financial goals and what you need the account for—whether it’s for daily expenses, saving for the future, or investing.
Canada’s banking system includes a mix of national banks, credit unions, and digital-only banks, all of which are regulated. Most deposits are protected by the Canada Deposit Insurance Corporation (CDIC), giving you peace of mind about your money.
At Remitly, we’re committed to helping you manage your money. In this post, we’ll explain the main bank account types available in Canada. We’ll explain the key benefits and purposes of chequing accounts, savings accounts, and investment accounts, helping you to choose an account that best fits your goals.
Chequing accounts: your everyday banking essential
A chequing account is what many people use for daily transactions like paying bills, making purchases with a debit card, and withdrawing cash. They provide a secure way for you to manage your money.
Key features
Chequing accounts are designed for daily use and typically include:
- A debit card. You’ll receive a card to use for your purchases, linked to the Interac network.
- Transaction limits. Many accounts have a set number of free transactions per month, though some offer unlimited plans for a higher monthly fee.
- Interac e-transfers. You’ll typically have access to online banking for fast online payments and transfers.
- Access to ATMs. Withdraw cash at your bank’s ATM for free. ATMs outside your bank’s network may incur a fee.
- Payment automation. You’ll be able to set up direct deposits for your paychecks or autopay on recurring bills, like utilities or rent.
- A monthly fee. Most chequing accounts come with a monthly maintenance fee. However, there are often ways to waive this fee, like maintaining a minimum daily balance, or if you’re a student or senior.
If you’ve recently arrived in Canada, opening a chequing account is one of the first steps to getting settled. It allows you to make e-transfers to pay your rent, buy groceries with a card instead of needing cash, and receive your paycheque. There are plenty of options available. Comparing account fees, transaction limits, and other benefits will help you find an account that works for you.
Savings accounts: growing your money
If you’re looking for a secure place to put money aside for future goals, like a vacation, a down payment, or an emergency fund, a savings account could be the right choice. Many Canadians use a savings account alongside a chequing account, transferring extra funds to earn interest and help their money grow.
Key features
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- Interest on your savings. A big draw of savings accounts is that they pay interest. This helps your money grow more quickly than it would in a piggy bank or under your mattress.
- No monthly fee. Unlike chequing accounts, savings accounts typically don’t have fixed monthly fees, though there may be limits to the number of free transactions you can make each month.
- Linked to your chequing account. Savings accounts are often connected to a chequing account, making it easy to transfer funds.
- Protected deposits. If your account is with a CDIC member institution, your deposits are insured up to $100,000 CAD per insured category.
The interest you earn will depend on the account type and banking institution. If you’re interested in maximizing your passive income, consider a high-interest savings account (HISA). These typically offer higher interest rates in exchange for certain conditions.
Tax-free savings account (TFSA): a powerful way to save and invest
A Tax-Free Savings Account (TFSA) is a popular way to save and invest in Canada. They’re registered accounts, which means they’re recognized by the federal government and administered by the Canada Revenue Agency (CRA). The TFSA lets you earn interest, dividends, and capital gains without paying tax on that income.
Key features
- Tax-free growth. The key benefit of a TFSA is that you don’t pay tax on any income earned with it, and you can withdraw your funds at any time without any penalty.
- Contribution limits. Each year, you receive a new “contribution room,” which refers to the total amount you can add each fiscal year. Unused room carries forward, and any money you take out creates room for the following year. The annual limit for 2025 is $7000 CAD.
- Investment options. TFSAs can hold various types of investments, such as bonds, stocks, and ETFs.
- Eligibility. You must be a Canadian resident aged 18 or over with a valid Social Insurance Number (SIN).
A TFSA is a versatile tool that allows you to grow your money tax-free, making it one of the most flexible and valuable accounts available in Canada.
Registered retirement savings plan (RRSP): planning for your future
A registered retirement savings plan (RRSP) is a government-registered account for long-term savings goals. It’s specifically designed to help you save for your retirement through tax-deductible contributions, meaning you can reduce your taxable income when you file your return.
Key features
- Tax-deferred growth. You don’t pay tax on money inside an RRSP until you withdraw it, usually during retirement. When you do withdraw money, it’s taxed as regular income, typically at a lower rate than when you were working.
- Contribution limits. Every year, you can contribute as much as 18% of your earned income from the previous year, up to a maximum—in 2025, the limit is $32,490. Any unused contribution room carries forward indefinitely, and you can make contributions for the current tax year up to 60 days into the following year.
- Early withdrawals. You can access your money before retirement, but withdrawals will be taxable.
- Eligibility. You need to have an earned income and a valid SIN to open an RRSP. You can make contributions until December 31 of the year you turn 71—then, the account has to be converted into a Registered Retirement Income Fund (RRIF) or an annuity.
An RRSP is a great tool for anyone who is planning for retirement, especially if you’re in a higher income bracket now and expect to have a lower income in retirement.
TFSA vs RRSP
Both TFSAs and RRSPs can help you with long-term savings goals and provide tax benefits. Here’s a simple comparison of the two account types to determine which might be right for your situation.
| TFSA | RRSP | |
| Limits for contributions | Fixed annual limit starting at age 18 | 18% of the previous year’s earned income, up to $32,490 |
| Tax on contributions | Contributions made with after-tax income | Contributions are tax-deductible |
| Tax implications on withdrawals | Withdraw at any time without tax penalties | Withdrawals are taxed as income; best to withdraw after retirement |
| Best for | Flexible short- or long-term goals, emergency funds, or tax-free investment growth | Long-term retirement savings, especially for higher earners |
What about joint accounts?
A joint account is shared by two or more people. Anyone named as an owner on the account will have equal access and responsibility, meaning anyone can deposit, withdraw, and complete other transactions.
If you’re sharing expenses like rent, mortgage payments, or bills, or working towards short- or long-term goals with someone else, like a partner, family member, or friend, a joint account could be a good solution.
Before you consider a joint account, get to know what joint ownership means:
- Equal access. Each person listed on the account can access the funds at any time.
- Shared responsibility. Account holders are equally liable for overdrafts or debts, even if one person causes them.
- Tax implications. Any interest earned is taxable and must be reported based on who contributed the money.
A joint account can be a convenient way to share finances, but it requires clear communication and trust between account holders.
Find the right fit for your money
If you’re planning to move to Canada or are just reviewing your banking options, consider opening one or more of the four main types of bank accounts to suit individual needs.
A chequing account is great for daily use, while a savings account helps you work towards short- and long-term financial goals. For tax-efficient growth and saving for retirement, a registered account like a TFSA or RRSP can be a valuable tool.
Many Canadians choose to open more than one account to balance different financial needs and goals. No matter where you are on your financial journey, taking that first step towards smarter banking is a great way to feel more at home in Canada.
FAQs
Can I open a Canadian bank account if I’m not a citizen?
Yes. Under Canadian law, anyone living in Canada can open a personal bank account, even if you’re not a citizen, a permanent resident, or living there full-time. You’ll need a valid ID and may be asked to visit the branch in person to open the account. Requirements vary by institution.
What identification is typically needed to open a bank account in Canada?
You’ll need to bring original documents that prove your identity. Usually, a minimum of two of these documents is required, such as a Canadian driver’s licence, passport, permanent resident card, or provincial ID card. Sometimes, additional documents like a recent utility bill may be accepted as proof of address.
Can a bank refuse my account application?
Yes, in certain situations, such as if they suspect fraud, cannot verify your identity, or if you’ve engaged in illegal activity. If a bank refuses your application, it must inform you in writing and explain the reasons for the rejection.
Are there fees for Canadian bank accounts?
In some cases. Most chequing accounts charge a monthly fee, though many banks offer ways to waive it, such as maintaining a minimum balance. Savings accounts don’t usually have monthly fees, but they may have a limited number of free withdrawals or transfers each month.