Students often look for banking options where they can save more than they lose in fees. Many banks, brick and mortar as well as online only banks, offer student options that have attractive features for students and low fees.
This is important since many students need to pay rent, bills, educational expenses, etc.; they also need to manage loans, scholarships, grants, etc. So, creating a student bank account can enable students to learn good financial habits with savings and credits.
Before diving into what to look out for in different student bank accounts, it is important to know your goals, and needs when banking. For example, do you need a chequing account, savings account, or both? Both accounts have their own purpose, even in an ever increasing digital world.
What to look for in a student bank account
A student bank account allows those enrolled in university, college, or CEGEP to open a chequing, or savings account. Opening a chequing account also gives students a debit card to conduct daily transactions.
While you may still get a debit card with a savings account, the two types of accounts serve different purposes when it comes to how financial institutions set up the accounts.
You’ll want to start with a chequing account, but a savings account is also important to build good habits like “pay yourself first”. Here are a few things to look out for when picking the best option for you.
Difference between a chequing and a savings account
- Chequing Account: This account is the day-to-day account used to buy your coffee, meals, or pay for parking. This account is expected to have a lot of transactions.
- Savings Account: This account is generally meant to save money, and will have a higher interest rate than the chequing account. This account is expected to have very few withdrawals as it is meant to accumulate money.
The need to separate the accounts is to allow for the financial institutions to use the money you deposit in the savings account and loan the money to other customers. As such, the financial institution pays you interest in order to loan the money to others.
Bank Account Fees
Banks often offer low to no fees for students, but it will go up once you are no longer a student. It’s a short-term incentive compared with online banks or credit unions where there are often no fees even after you are no longer a student.
These fees can vary and cover a broad range of services such as
- maintenance fees,
- bank transfer fees,
- overdraft fees, and
- ATM withdrawal fees across networks.
Minimum Balance Requirement
It is essential to look out for balance requirements; some banks will charge a fee if you go below a certain balance in your account.
It may not be the case for a student account, but be sure to ask and clarify with the financial institution.
Ability To Pay And Receive Funds
As a student, you may need to pay your tuition and receive grant money; therefore, you need to ensure your bank account will allow this.
Unlimited e-Transfers And Debit Transactions
Since banking is often done with debit and online transactions, you want to ensure you do not pay the transaction fees. Therefore, a free, high, or unlimited number of e-transfers and debit purchases is something to look out for.
Convenient Branch Locations
Although many services are often offered online, some services might require a visit to the branch. However, many services can be handled over the phone with a bank representative. Therefore, branch locality may not be important to you.
However, it is something to keep in mind since some branches may not be in a convenient location. When it comes to loans, such as school loans, being able to have a face-to-face with a person can go a long way to be understood and helped.
Having a convenient branch may not be as important but having access to an ATM may prove necessary sometimes. In addition, there may be times when cash is necessary when debit and credit are not available.
One thing to be aware of is that different financial institutions are part of different ATM networks. The banks will tend to share their network, while the credit unions will share theirs.
Different banks offer different perks depending on your account, or credit card. Therefore, comparing different accounts that best match your livelihood is important.
If you are a movie lover, Scotiabank has a Scene card for example. That could be one of the most popular perks for students.
A perk to look out for is the sign-up bonuses that banks often offer students. Another perk that may pertain to you is if the account has a good interest rate, meaning that your account can make money over time.
Other potential perks are reward points and exclusive offers.
Student Credit Cards
Credit cards can be scary since many students do not want to fall into debt. However, if used responsibly, it can be an important financial tool.
Starting your credit history early can be beneficial to building your credit score. Using a credit card responsibly can also help students learn good spending habits.
To be responsible with your credit card, you must pay off the balance in full, and on time every month. If the credit balance is not paid off on time, the banks will charge interest, leading to more debt. In the long term, it can be devastating to your finances and credit.
Therefore, when looking for a bank, it is important to consider what credit card options are available for students and what features and fees might be involved. This way, you can also check how much interest different banks would charge students.
As a student, having access to your credit card transactions on a mobile app can be important to understand your spending habits, and it could be easier to get a credit card from the same financial institution when you start just to see everything in one place.
There are additional factors to think about for international students when choosing a bank. For example, international students need to pay attention to how easy fund transfers can be done, the fees associated with transfers, and time restrictions.
Money transfer from the home country becomes critical. Wise can be a good option but you need to ensure it works well with your local financial institution, as well as the one you choose in Canada. The big banks appear to be a solid option with Wise.
Most big banks will change your student account to a regular account once you graduate. This will most likely lead to having fees, and fewer perks.
So, when deciding which bank to go with, it is important to look at the conditions for regular accounts. In addition, this may be a reason to investigate online banks since they tend to offer no-fee banking for everyone, not just students.
Since many of the big banks grant you some time after graduating, you also have some time to decide on the next course of action for your banking needs after your student life.
The Big 6 Banks
The ‘Big 6’ banks describe the 6 biggest banks in Canada.
- Royal Bank of Canada (a.k.a. RBC)
- Bank of Montreal (a.k.a. BMO)
- Canadian Imperial Bank of Commerce (a.k.a. CIBC)
- Bank of Nova Scotia (a.k.a. Scotiabank)
- Toronto-Dominion Bank (a.k.a. TD)
- National Bank.
The big banks are notorious for having fees on everything but when it comes to student accounts, they tend to waive all fees, and often provide unlimited transactions.
|Banks||Monthly Account Fees||Monthly Account Transactions||Interac e-Transfer||Other ATM Network|
|TD Bank||$0||Unlimited||Free||Fees May Apply|
|Scotiabank||$0||Unlimited||Free||Fees May Apply|
|CIBC||$0||Unlimited||Free||1 Free / Month|
|National Bank||$0||Unlimited||Free||Fees May Apply|
Credit unions tend to be offered within the province, but rarely across provinces. Below is a short list of the biggest ones.
Since credit unions are not for profits, they tend to have no fees for basic accounts and lower fees for more features.
|Coast Capital Savings||BC|
Online & Digital Banks
Although the big banks and credit unions offer services online, there exist financial institutions that only conduct business online.
Therefore, when depositing cheques and paying bills, you will need to have a smartphone or computer available as there is not a physical branch to visit. Online banks often have better rates and low to no fees.
Some online banks in Canada are:
|Online Banks||Monthly Account Fees||Monthly Account Transactions||Interac e-Transfer||Other ATM Network|
|Tangerine||$0||Unlimited||Free||Fees May Apply|
|EQ Bank||$0||Unlimited||Free||No Access. You need another bank.|
|Simplii||$0||Unlimited||Free||Fees May Apply|
|Manulife Bank||$10, unless minimum reached||Unlimited||Free||The Exchange Network|
|Motusbank||$0||Unlimited||Free||The Exchange Network|
|PC Financial||$0||Unlimited||Free||PC Financial® ATMs|
|Wealthsimple Spend||$0||Unlimited||Free||VISA Debit card. ~$3 fee applies.|
|Koho||$0||Unlimited||Free||Visa or Mastercard Debit card.|
- Tangerine is owned by Scotiabank and you get access to all the Scotiabank ATM. Refer a friend is a way to earn a bit of money from being a customer.
- Simplii is owned by CIBC and you get access to all the CIBC ATM. Refer a friend is a way to earn a bit of money from being a customer.
- PC Financial is part of Loblaw and you get access to ATMs at many of the Superstore or Shoppers location.
- You need to scratch EQ Bank or Wealthsimple Spend as a student for day-to-day banking if you want cash for free. There is no way to withdraw unless you transfer the money to another bank.
How To Choose The Best Bank
Let’s be clear that as a student, you pretty much can have no fee banking with unlimited transactions across the big banks, the credit unions and the online banks.
Tangerine, Simplii, and PC Financial have broad access across the country due to their ownership while EQ Bank, Wealthsimple Spend, and Koho are truly just online bank where you pretty much need another bank.
Now, there is one critical consideration to factor when choosing your bank outline below.
- Are you staying local within the same province? If you are, credit unions are great options to start as they usually have no fees, and offer branches in some of the major cities.
- Are you going to school out of province? If you are, one of the big banks might be better (excluding National Bank as it’s not as national as the others). A big bank will allow you to have the same service regardless of the province you are in.
- Are you an international student? This one is a little harder, but you want to understand if one of the Canadian big banks has a foothold in your country. If not, one of the big banks is still probably your best option.
The second consideration is if you expect to receive money from your parents for school or not, and choosing the same bank can provide you with a quick transfer as opposed to across banks.
Within the same banks, limits might be higher than if you were to do it through Interact e-transfer.
How To Open A Student Bank Account
Opening a student bank account can be done through the bank’s website, or local branch. To open a student account, banks will ask for documentation and proof that you are a student. The documentation required will depend on which bank you choose to go with.
Documents are required to prove that you are of legal age in your province/territory of residence, to prove your current address and that you are a full-time student.
The documents needed can be your passport, driver’s license, a copy of your lease, a utility bill with your current address, a copy of your school’s current year’s timetable, confirmation of enrollment or other proof of enrollment.
It is relatively easy for international students to open a bank account in Canada. However, you will need more documents than those mentioned above, such as a Canadian visa or study permit.
For The Conscientious Students
One word would be to put your money where your mouth is, and if you are environmentally conscious, look at your bank ESG score!
More than ever, you don’t just want to talk about the environment, but you want all your actions to make a difference whenever possible.
What is ESG?
ESG, or Environmental, Social and Governance, are factors used to measure the sustainability and ethical impact of businesses or investments. Companies that adopt the ESG standards positively are more conscientious, less risky, and more likely to succeed in the long term.
There are many factors involved in each category; this is not an exhaustive list of ESG criteria but a sample of the potential areas that some businesses may focus on.
Environmental – the performance of a business as stewards of our environment
- Waste and pollution
- Resource depletion
- Greenhouse gas emission
- Climate change
Social – evaluates how people are treated by a company or business
- Employee relations and diversity
- Working conditions
- Local communities
- Health and Safety
Governance – how a business governs itself and polices itself
- Tax strategy
- Executive remuneration
- Donations and political lobbying
- Corruption and bribery
- Board diversity and structure
What to look for when going green and ethical with your bank
Banks have policies on environment and social impacts; however, these policies may differ, and this does not mean that the banks are not supporting fossil fuels at the same time. Therefore, it is important to understand how a company’s ESG performance is evaluated.
The company’s evaluations of ESG performance differ because of different measurement frameworks and reporting standards. So, to get accurate and high-quality data, banks need to outline a clear ESG strategy, execute it, and ensure the data is accessible.
Therefore, you want to ensure that the financial institution you are researching has clear outlines and accessible information on environmental, social and governance impact.
Here is an example from VanCity credit union.
Since the big banks are publicly traded, unlike credit unions, the ESG score for the banks is reported. The higher the better.