Category:
Financial Literacy

Adopting Effective Banking Practices

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BANKING IN CANADA

Banks, credit unions, trust companies, or caisses populaires  are safe places to keep your money.

Deposit Insurance

  • Deposits of up to $100,000 in most banks and trust  companies are insured by the Canadian government.
  • Deposits of up to $100,000 in most credit unions and  caisses populaires are insured by provincial governments.
  • Deposit insurance is only available in Canada for Canadian  funds held by Canadian banks.
  • The bank must tell you if it is not covered by government  deposit insurance.
  • You should always inquire if the investment product that  you are buying is covered by deposit insurance.

Credit Unions and Caisses Populaires

  • Credit union and caisse accounts differ from banks and trust  companies because you become a member and owner of  the institution.
  • Members are paid a share of the institution’s profits.

HOW TO OPEN A PERSONAL BANK ACCOUNT

In Canada, you can open a bank account even if:

  • You do not have a job
  • You do not have money to put in the account right away
  • You have been bankrupt

To open an account, you must go to the bank in person  and present two pieces of original identification from  those listed below. You have three choices.

Choice #1: Show two pieces of I.D. from this list:

  • Canadian driver’s license
  • Current Canadian passport
  • Canadian birth certificate
  • Social Insurance Number (SIN) card
  • Old Age Security card with your Social Insurance Number  on it
  • Certificate of Indian Status
  • Provincial or territorial health insurance card (this cannot be  used in Ontario, PEI or Manitoba)
  • Certificate of Canadian Citizenship or Certification  of Naturalization.
  • Permanent Resident card or a Citizenship and Immigration  Canada form IMM 1000, IMM 1442, or IMM 5292.

If you do not have two pieces of I.D. from Choice #1 you can:

Choice #2: Show one piece of I.D. from Choice #1 and one  piece of I.D. from the following list:

  • Employee I.D. card
  • Debit card or bank card with your name and signature on it
  • Canadian credit card with your name and signature on it
  • Current foreign passport

Choice #3: Show one piece of I.D. from Choice #1 and have  someone the bank knows confirm that you are who you  say you are.

To find out other types of acceptable I.D. contact the Financial  Consumer Agency of Canada https://www.canada.ca/en/financial-consumer-agency.html

OPENING A BANK ACCOUNT

Having Difficulty Opening a Bank Account?

Speak to your bank. If you are not satisfied, you can  contact the bank’s ombudsman or the Ombudsman for Banking Services and Investments (OBSI): https://www.obsi.ca/en/index.aspx

Before you Open a Bank Account, Ask Some Questions

  • What are the monthly fees?
  • What transaction fees are included, and how many?
  • What are the different accounts available?
  • Does the bank require you to maintain a minimum balance  to avoid monthly fees?
  • Are there additional fees, on top of the monthly fee?
  • Ask about seniors’ personal banking plans with low or no  monthly fees.
  • Check out the fees of other financial institutions.

WHICH ACCOUNT IS RIGHT FOR ME?

Savings Accounts

  • Banks pay you to keep money in your account, by giving you  interest on the funds in the account.
  • You can earn a small amount of interest on the money you  put into a savings account.
  • Savings accounts are a good place to keep money for  an emergency or money you don’t need for day-to-day  transactions.
  • These accounts are usually easy to withdraw money from  using a debit card or at the bank.
  • Fees may be charged for withdrawals.

Chequing Accounts

  • You earn very little or no interest.
  • Gives you access to your money quickly and easily.
  • Useful for day-to-day transactions such as paying bills and  withdrawing cash.
  • Fees may be charged for cheques, using your debit card or  for withdrawals.
  • You may be charged a flat monthly service fee.

BANK CARDS

You will get a bank card (debit card/access card) when you open  an account and you will create a Personal Identification Number  (PIN), a secret password that only you know. Your PIN will allow  you access to your account by phone, internet, or bank machine.

Your Personal Identification Number (PIN)

  • You create your PIN.
  • Do not use a number that is easy to guess or contains  personal information.
  • Keep your PIN secret. Do NOT write your PIN on your  bank card.
  • If you share your PIN and money goes missing from your  account, you will not get your money back and will be  held responsible.
  • Wherever you use your bank card, always use one hand to  cover the buttons so no one can see your PIN.

Safety Tips

Keep your card safe. Do not give or lend your card to anyone.

You can change your PIN at your bank or with the bank over  the phone anytime.

If you forget your PIN, you can choose a new one at the bank.  If you lose your bank card or it is stolen, call your bank  right away.

ALTERNATIVE FINANCIAL SECTOR

What You Should Know About Payday Loan Services . A payday loan is a short-term loan that you must pay  back from your next pay cheque within 2 weeks or less.  Interest is charged until the loan is repaid in full, and the  rate is considerably higher than those set by other financial  institutions.

  • Payday loans are offered by privately owned companies and  cash-chequing outlets.
  • The federal government does not regulate these companies.
  • Payday loans have high-cost late payment fees, interest  charges, and administrative fees.
  • A payday loan is a very expensive way to borrow money.
  • When possible, avoid using payday loan services.
You should not rely on this pocket tool for financial or legal advice. It provides general information only. NICE is not responsible for any use of the information other than for general educational/informational purposes and no claim can be made against NICE or any of its personnel for any such use.
National Initiative for the Care of the Elderly (NICE)
246 Bloor Street West, Room 234
Toronto, Ontario M5S 1V4, Canada