International students – Your guide to banking before you move to Canada

Are you one of the many international students that arrive in Canada every year? Welcome! We have some tips to help you manage your finances and adjust to the Canadian banking system.

Open a GIC

A Guaranteed Investment Certificate (GIC) is a fixed-term investment, meaning that it gives you a determined rate of interest for the length of the GIC. You are also guaranteed to get your principal back. It is one of the lowest risk investments in Canada, like putting your savings in a bank account. Up to $100,000 CAD in a GIC, per financial institution, is guaranteed by the Canadian Deposit Insurance Corporation (CDIC).*

The preparation starts in your home country, and if you're from China, India, Morocco, Pakistan, Philippines, Senegal or Vietnam, you'll probably be applying under the Student Direct program.** This program offers an expedited way to get your study permit. But it requires that you show proof of funds by purchasing a $20,635 CAD GIC (as of January 1,2024).

You can open a GIC while still in your home country by sending a wire transfer of $20,635 CAD plus any applicable fees to a CDIC insured bank.

For example, Scotiabank offers a specific GIC program for international students with an easy online application. If you're coming from China then it's also possible to apply through a partner bank, such as China Everbright Bank, Bank of Xi'an or the Bank of Beijing.

On arriving in Canada, the Canadian bank will release a portion of the funds once they confirm your identity, and then the remaining funds are distributed in installments over the next 10 to 12 months. This is required by the Government of Canada to ensure that you have the proper financial support for the length of your study.

If your study permit is denied or cancelled then no worries, you can request a refund.

If your study permit is accepted, then congratulations! Once you land, one of the first tasks you want to check off (besides getting a warm coat!) is opening an appropriate bank account.

How banking in Canada works

Canada has five major banks, and they are all extremely large and stable financial institutions – most of them dating back to the 19th century. Scotiabank, for example, was founded in 1832.

Opening a bank account is essential to daily life in Canada.

The primary mode of earning and spending in the Great White North is handled through a chequing account (same as the United States “checking” account, just spelt different). Employers usually deposit wages directly in your chequing account and you can withdraw funds using a debit card connected to this account. You can take out cash at an automatic banking machine (ABM) with a debit card or use it at a store to buy items, just as you would cash. Debit cards are accepted almost everywhere, except sometimes at smaller merchants, like convenience stores or online.

Another way to deposit and withdraw funds is through personal cheques. Unlike the United States and many European countries, paper cheques are still fairly prevalent here. Some landlords still require a stack of post-dated monthly cheques to pay rent. Online Interac† e-Transfer transactions however, are becoming more and more popular and are often used to transfer money to friends and sometimes even small businesses.

Luckily, there are special student accounts available with your needs in mind.

Open a student bank account

You can sign up for a student bank account at the same time you go to a bank’s branch to release your GIC.

Make sure to bring along your Temporary Resident Visa, your passport and proof of enrollment in school, such as your student ID card.

You want to look for chequing accounts with features you can use, like Interac† e-Transfer and a secure app to manage your money. You can also choose to buy a chequebook if your landlord requires it.

Your account may also come with the option of applying for a credit card for a low limit -- here's why you should consider that.

Build a credit history

Building a credit history is essential to building a life in Canada. Your credit history and the score based on your credit history (called a credit score), is one thing a lender looks at to determine how big a risk you are as a borrower.

Do you pay your bills on time? How much of your available credit do you use? How long have you used credit? These are just a few of the questions your score is based on.

Landlords, for example, often look at this score to determine how trustworthy you are. And when it comes time to purchase a car or home, lenders will look at your score to determine what interest rates and terms to offer.

Avoiding borrowing can be a mistake – you should start to consider proving your trustworthiness as a borrower by taking out small amounts of debt and paying it back on time.

That's why a credit card with a relatively low limit, like the one of Scotiabank’s student cards, is the perfect way to begin building up a history of credit. These types of cards are available to users without a credit history and can offer rewards like cash back or free movie rentals.

With these three products – a GIC, a chequing account and a credit card, you're well on your way to enjoying a seamless transition to daily life in Canada.

If you are an international student enrolled in a Canadian Graduate program, you can apply for a ScotiaLine® Personal Line of Credit with a co-borrower who is a Canadian citizen/permanent Canadian resident and enjoy a 12-month grace period after graduation on repayment of the principal amount borrowed.