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Canadian Banking Basics

By cvf, 05/26/2023

Canadian Banking Basics

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Canada has a robust banking system, with domestic and international banks operating in the country. BMO is among the five major banks in Canada and is Canada’s oldest bank with over 200 years of experience. 

Canadians can open different bank accounts, such as savings, chequing, and business accounts, to manage their finances. These accounts may have fees, minimum balance requirements and offer various features and benefits.

For its best banks in Canada for May 2023, Forbes Advisor Canada picked BMO as having the “best bundling and special offers” among the “big five” Canadian banks. 

Forbes Advisor, among other things said of BMO, “Where this bank excels is bundling and special offers”. For newcomers in Canada, the BMO NewStart® Program is designed to make getting started in Canada a little easier with chequing account, credit card, investing and overseas money transfer offers. 

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Chequing accounts are used for everyday transactions, such as writing cheques, making bill payments, and using a debit card for purchases. Chequing accounts, sometimes called current accounts, typically provide features such as cheque-writing, debit card access, and online and mobile banking and may also offer overdraft protection.

A “no monthly fee banking for one year” is part of the benefits of the Performance Plan chequing account in the BMO NewStart® Program.

Savings accounts help individuals save money and earn interest on their deposits. They have higher interest rates than chequing accounts but may have transaction limits and withdrawal fees. Savings accounts are considered a low-risk investment option. They are usually used for short-term or medium-term savings goals, such as building an emergency fund, saving for a vacation, or setting aside money for a down payment on a home.

Chequing accounts vs. Savings accounts: A chequing account is best for everyday transactions, while a savings account is best for long-term savings and earning interest on your money. Having both types of accounts meet your financial needs is a good idea. Learn more about the difference.

bank statement summarizes a bank account’s financial transactions over a certain period. It typically includes the beginning and ending balances, deposits, withdrawals, cleared checks, electronic transactions, and any fees or charges incurred during the specified period.

Bank statements are typically issued by banks or financial institutions monthly, although they may be available more frequently upon request. Bank statements are essential for keeping track of an account’s activity, reconciling transactions, and monitoring the account’s financial health.

They can be obtained in paper format or electronically through online banking portals or mobile apps. Here is how BMO can help you manage and access your bank statements and help you stay on top of your finances.

Managing multiple bank accounts can be challenging, but it can be made easier with some organization and planning. Keep a list of all your bank accounts, including the bank name, account number, and balance. This will help you stay organized and ensure you remember your accounts. Learn more about the benefits of having multiple banking accounts.

Advantages Of Using A High-Interest Savings Account

A high-interest savings account can offer several advantages over a regular savings account or checking account. It typically provides a higher interest rate than a standard savings or chequing account. This means you can earn more money on your savings.

Many high-interest savings accounts do not have monthly maintenance fees, minimum balance requirements, or other fees that can affect your savings.

Easy Access: While a high-interest savings account may offer less liquidity than a checking account, it allows you to access your money quickly when needed. You can typically withdraw money online, by phone, or at an ATM.

Flexibility: A high-interest savings account can be a good option for short-term savings goals or emergency funds. It’s also an excellent place to hold money that you may need to access soon but want to avoid investing in the stock market or other high-risk investments. Learn about the advantages of using a high-interest savings account.

Debit vs Credit: Debit cards are linked to a bank account, and the funds used to make purchases are deducted directly from that account. On the other hand, credit cards allow users to borrow money up to a specific credit limit and pay it back later with interest. Using a credit card and it off on time can help build credit and improve your credit score. Debit cards do not affect your credit score in the same way.

Both cards offer fraud protection, but the process for disputing charges and recovering lost funds may differ. Another difference is that credit cards often offer rewards such as cashback or points, while debit cards do not.

Sending & Receiving Money

Sending money online has become easier because of online payment platforms. More details here on the methods below:

  • Global Money Transfer
  • Bank Wire Transfer 
  • Interac e-Transfer 
  • Cheques
  • Money Transfer Services
  • Online Payment Platforms 
  • Mobile Wallets 

Learn more about the multiple ways you can send money at BMO.

In Summary

Banking terms may vary slightly depending on the specific bank or financial institution in Canada, so it’s always a good idea to consult with a financial professional or your bank for specific details and advice.

Want to learn more about Canadian banking? BMO SmartProgress™ is a free online financial education tool that has been designed with bite-sized content, including videos and tools, to augment understanding of complex financial topics, such as budgeting and credit management, homeownership and investing in your future.

The post Canadian Banking Basics appeared first on Canada Immigration and Visa Information. Canadian Immigration Services and Free Online Evaluation..



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