7 Best Banks for Students in Canada 2021: Take Early Control of Your Finances

Whether or not you live on your own, it’s a good idea to take control of your finances. You can start by learning about the best banks for students in Canada.

A student’s banking needs are quite different from other adults who joined the workforce or are running their own business. Even if they work part-time jobs or temporary gigs, most students’ primary banking needs revolve around paying rents, bills, dorm expenses, educational expenses, and managing their grants and debts, among others.

So, in this article, we will help you determine the best banks for students in Canada.

Factors Determining The Best Banks For Students In Canada

To identify the best banks for students in Canada, you first need to understand what your banking needs and goals are. These needs might be significantly different from the needs of other domestic and international students.

Assess whether you need a chequing account, a savings account, or both. If you only need a bank account to move funds around or make payments, a chequing account that permits a lot of free debit transactions might be the best option for you. But if you’re one of the relatively few students planning to start saving/investing at an early age, you might require a savings account as well.

The most important factors you need to consider before you open a bank account as a student in Canada are:

1) Fees

If you’re like most students in Canada, you might have a lower stipend or income, so you don’t want more money going out of your bank account than necessary. Thus, you should look for bank accounts with virtually no monthly maintenance fee and minimal to no bank transfer and ATM withdrawal fees.

Even shelling out $40-$50 a year on banking fees is already an unwanted strain on a student’s relatively thin wallet.

2) Necessary Features

The account you choose should have all the core banking features you need to take control of your financial life. For instance, it should have no or minimal transfer fees, should enable you to pay your college tuition and fees, and should make it easier for you to receive your grant money.

3) Transactions or Interac e-Transfers

The more monthly transactions and Interac e-transfers you’re allowed for free, the better. Ideally, you should be able to make as many online transactions as possible without triggering any banking fees.

4) Sign-Up Bonus

That’s an added bonus and not something you might find in every bank. However, many banks offer sign-up bonuses to students, usually on campuses where they try and make a new client for life. A lucrative sign-up bonus can be the cherry on top of the account’s necessary features.

5) Credit Card or Credit History

As a student, you need to remember that a decent credit card is similar to having “great power that comes with great responsibility”.

If you get into the habit of using your credit card responsibly from an early age, you’re more likely to develop good spending habits and build a good credit history. Also, look for additional features like cashback on categories you’re likely to spend the most on.

6) Interest Rates And Investment Products

If you regularly get a decent sum from your parents that you use for paying university expenses, then an account with a decent interest rate can be quite financially savvy. But if your wages or stipend fly out of your account only days after they come in, then you might need to choose a bank account based on factors other than interest rates.

For international students, the ease of fund transfers, associated fees, and time restrictions are crucial factors when choosing the right bank.

The 7 Best Banks For Students In Canada

Once you’ve identified your banking needs, you can then browse the banks available in Canada. It’s important to note that you might not necessarily need a dedicated student account. Some digital banks offer no-fee banking with decent features that might serve your banking needs just as well as a student account from one of the Big Five.

None of the banks listed below have a monthly fee.

1. Royal Bank of Canada

rbc bank logo

Monthly Transactions Allowed: Unlimited
Interac e-Transfers: 999 free transactions a month
Sign-Up Bonus: $60 (applicable during the promotional period only)
Credit Cards: 5

The largest bank in the country is also one of the best banks for students in Canada. You can open a no-fee chequing account and get one of the five credit cards dedicated for students. There are unlimited free transactions, which is a step up from the previous policy of 25 transactions-only a month. And if you apply and qualify within the promotional period, you also get a $60 bonus.

The cap on free Interac e-transfers is so high that it might as well be unlimited. You also get a free chequebook for 50 cheques and access over 4,200 ATMs nationwide.

The bank also offers one of the broadest ranges of credit cards for students. Two of five credit cards come with no annual fee, and all have the same purchase and cash advance rates at 19.99% and 22.99%, respectively. Aside from that, RBC offers a cashback and reward system.

You can also look into its savings account, but the 0.05% interest rate is usually not worth paying $1 for every Interac e-Transfer or having only one free ATM withdrawal a month.

2. EQ Bank

EQ Bank Logo

Monthly Transactions Allowed: Unlimited
Interac e-Transfers: Unlimited
Sign-Up Link: Website here
Credit Cards: N/A

If you’re comfortable with online banking and don’t need access to physical branches, EQ bank is another financial institution you might consider. Again, it doesn’t have a student-focused account, but its Savings Plus account packs all the necessary features.

One disadvantage with EQ bank, however, is that it doesn’t offer a credit card. Still, a major advantage of opening a bank account with EQ bank is that it offers significantly higher interest rates at 1.25% than most other banks.

3. Canadian Imperial Bank of Commerce

Canadian Imperial Bank of Commerce

Monthly Transactions Allowed: Unlimited
Interac e-Transfers: Unlimited
Sign-Up Bonus: N/A
Credit Cards: 3

Another bank that offers students unlimited transactions, free Interac e-transfers, and a decent number of student credit cards is CIBC. The bank isn’t currently offering a sign-up bonus across the board, but you might still get one from their local promotions.

Like most other banks, CIBC counts Interac e-transfers as a transaction, and since it offers unlimited free transactions, there isn’t even a 999-transaction cap like RBC’s. CIBC also has an impressive footprint, with over 1,000 locations across the country. So, if face-to-face interactions with your bankers are vital to you, it’s a plus.

The bank also offers two lines of credit: one for education in general and one for students enrolled in professional programs. You can get up to $350,000 with the latter, depending on your field of study.

All its credit cards come with no annual fees, though the cashback offer is not as lucrative as RBC’s. The Aeroplan Visa card is ideal for students that require a lot of air travel.

4. Scotiabank

Scotiabank Logo

Monthly Transactions Allowed: Unlimited
Interac e-Transfers: Unlimited, but your 100th transfer onward may be initially charged. They will be reversed in the next month, though.
Sign-Up Bonus: 5,000 SCENE or Scotia Reward Points
Credit Cards:

Scotiabank offers two different bank accounts to students. Getting There Savings Program for Youth is aimed at students 18 years and younger, while the Student Banking Advantage Plan is for older students. However, both student accounts come with unlimited debit transfers and free 99 Interac e-transfers, although you can get the fees rebated in the subsequent months.

One additional benefit of Scotiabank’s Student Banking Advantage Plan is that you can get up to 5,000 Scotia or SCENE reward points and four free movies out of those points.

Another reason that makes Scotiabank one of the best banks for students in Canada is that it offers a powerful enough line of credit for students. You can get up to $375,000, with a grace period of up to 24 months. The bank also offers two no-annual-fee credit cards to students. One comes with cashback and the other with a SCENE point-based reward system.

5. Bank Of Montreal

BMO

Monthly Transactions Allowed: 25
Interac e-Transfers: Unlimited
Sign-Up Bonus: $70 cash bonus on a BMO student chequing account, $125 cashback on a BMO Cashback Mastercard, and up to $500 bonus on a BMO Student Line of Credit (during the promo period only)
Credit Cards:

If you don’t mind a limited number of transactions and are looking for generous sign-up bonuses, BMO’s student accounts might be for you. The bank offers a cash bonus more generous than any of the Big Five, a cashback bonus on one of the two student credit cards, and a bonus on the line of credit.

It offers a no-fee account to students and unlimited free Interac e-transfers not exceeding $3,000 per 24 hours. Note, though, that some non-BMO ATMs may charge transaction fees.

BMO also offers other student accounts: Performance, Plus, and Premium. Premium and Performance offers unlimited transactions, but Plus offers no monthly fees for your monthly plan.

BMO also has a line of credit that allows you to borrow up to $45,000 for four years at a variable interest rate. It also offers two credit cards with no annual fees at typical interest rates (19.99% for purchases and 22.99% for a cash advance). One card offers cashback in dollars, while the other offers bonus air miles.

6. Toronto-Dominion Bank

Monthly Transactions Allowed: 25
Interac e-Transfers: 25 (included in monthly transactions)
Sign-Up Bonus: N/A
Credit Cards:

If you’re looking for a restrictive banking account as a student, TD might be the one for you. It comes with overdraft protection options, and you earn an interest of 0.01% for every dollar you have in your student account.

However, the major disadvantage of the TD student chequing account is its restrictive monthly transactions. You can only make 25 total transactions, including Interac e-transfers.

The line of credit is quite generous, though. Both full-time and part-time students can get up to $20,000 a year for a total of $80,000 in four years. On the other hand, MBA and Law students can get as much as $125,000.

TD offers four credit cards to students, with two out of the four offering no annual fees. One of these two free cards offers cashback, while the other offers TD reward points.

7. Tangerine

Monthly Transactions Allowed: Unlimited
Interac e-Transfers: Unlimited
Sign-Up Bonus: 2.1% interest rate for the first five months (during the promo period only)
Credit Cards: based on your annual income

As a premier online bank in Canada, Tangerine offers almost a full range of financial products. Unfortunately, a “student account” is not one of them. However, Tangerine’s no-fee chequing account ticks almost all the boxes that you’re looking for in a student bank account.

It doesn’t have a monthly fee, it offers unlimited debit transactions and Interac e-transfers, and you get to earn a 0.01% interest on any amount less than $50,000. The sign-up bonus can be quite hefty compared to what other banks offer, but you have to put a decent amount in your chequing account first to take advantage of it.

Since Scotiabank owns Tangerine, you can take advantage of Scotiabank’s ABMs to withdraw cash from your debit card for no fee. The fee for non-CIBC ATMs is also lower compared to other banks, at $1.5 per withdrawal.

The online bank has a line of credit, but it might not offer special allowances to students. As for credit cards, if your gross annual income as a student is $12,000 or more, you’d be eligible for Tangerine’s money-back credit card.

What Students Need To Know About Personal Finances And Banking

Banks, especially the Big Five, offer bank accounts tailored specifically for students. Once students graduate, they usually need to move on to a “paid” account. But that trend is slowly dying as more fintech and digital banks started offering no-fee banking. The Big Five also now offer similar products to stay competitive.

If you’re researching the best banks for students in Canada, there are two more things you need to know.

First, it’s not just traditional or digital banks that can serve your digital banking needs. Investment platforms like Wealthsimple also offer basic “spending” accounts that come with their own version of debit cards and that you can use for your routine expenses. It’s especially useful if you’re also trying to invest your money.

Second, even as a student, you can open and utilize your TFSA and RRSP accounts. It might seem too early to start saving for retirement, but the earlier you can start utilizing your TFSA account, the more you can take advantage of your investment.

Another benefit of saving and investing as a student is that you might pick up good financial habits like careful spending, budgeting, and debt management.

Conclusion

Everyone’s choices for the best banks for students in Canada might differ because of individual banking needs and requirements. But lists like this are still helpful to comprehensively compare your choices.

We hope you got the answers you were looking for and are now a few steps closer to making the right choice for your best banks as a student in Canada.

Best Banks for Students in Canada
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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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