Author: Kritik Goyal
Date: July 15, 2023
Banking is essential to our everyday lives, providing the financial infrastructure to manage our money, save for the future, and achieve our financial goals. In Canada, the banking industry is crucial in supporting the country's economy and ensuring the smooth functioning of financial transactions. I remember moving to Canada with little to no knowledge about the banking facilities other than a little about my GIC account (given by my immigration lawyer).
The Canadian system is renowned for its stability and customer-centric approach. It comprises chartered banks, credit unions, and other financial institutions that provide various services to individuals and businesses. They follow rules from the Office of the Superintendent of Financial Institutions (OSFI) to keep things fair and secure. When it comes to managing your money, Canadian banks offer various types of accounts tailored to
different needs like Chequing accounts, savings account (additional secured investments), Registered Retirement Savings Plans (RRSP), Registered Education Savings Plan (RESP), Registered Disability Savings Plan (RDSP) and Tax-free savings account (TFSA).
As per IRCC, international students must have a GIC Program, which is a secure investment that helps you pay for your studies and living expenses in Canada. A guaranteed investment certificate provides a fixed rate of return over a set period and is typically issued by trust companies or banks. Because of its low-risk profile, its recovery generally is lower than other investments such as stocks, bonds, or mutual funds. The GIC helps demonstrate that you'll have enough money for the tenure of your education. Different institutions provide these certificates with varied interest rates that meet the criteria, such as:
As an international student, my GIC account experience with Scotiabank was exceptional. My parents created a GIC account with a required amount of $10,000, which would be available for me in instalments every month. I planned on saving that money and utilizing it towards my upcoming university tuition fees. Additionally, Scotiabank’s online banking platform was user-friendly, allowing me to manage my account and track my investments easily.
A chequing account is suitable for daily spending, whereas a savings account allows you to save money while earning interest. Investing in stocks and bonds through investment accounts enables you to grow your money.
Most banking organizations are backed up by the Canada Deposit Insurance Corporation (CDIC). This federal Crown corporation insures Canadian deposits. Suppose a member financial institution fails (such as insolvency). In that case, CDIC ensures that people (individuals and businesses) continue to access their funds. In the event of an institution failure, the CDIC has a wide range of resolution tools at its disposal, such as assisting in selling a troubled bank to a healthy one or, if necessary, directly reimbursing depositors. These tools contribute to the overall stability of the Canadian financial system.
To conclude, it is essential to understand your banking requirements and choose one that meets your needs and wants. The basic requirements for international students are to have a chequing account, savings account and GICs, which are offered by most financial institutions across Canada. The person should explore their option before choosing either financial institution to get the best rates and deals.
Canada, F. C. A. of. (2023, June 26). Government of Canada. Canada.ca. https://www.canada.ca/en/financial-consumer-agency/services/banking.html
Institutions, O. O. T. S. O. F. (2022, April 26). About Us. https://www.osfi-bsif.gc.ca/Eng/osfi-bsif/Pages/default.aspx
Immigration, R. a. C. C. (2023, June 6). Student Direct Stream: Who can apply. Canada.ca. https://www.canada.ca/en/immigration-refugees-citizenship/services/study-canada/study-permit/student-direct-stream/eligibility.html#