Opening a Savings Account In Canada: A Step by Step Guide

Gone are the days of stuffing money beneath your mattress or storing bills inside a jar in the kitchen. Today, opening a savings account is one of the simplest ways to not only protect your cash, but also help it grow. The process of opening this type of bank account is now easier than ever, too.

Whether you want to build an emergency fund, save for a short-term spending goal, or set up a safer place to hold your extra money, knowing how to open a savings account is the first step. The good news? You can now choose to apply online in a matter of minutes. Or, if you prefer to speak with someone face to face, you can head into a branch for in-person support. Either way, the process is simple. In this guide, we’ll walk through each step so you can manage your expectations and know exactly what to prepare as you apply for a savings account in Canada.

Eligibility criteria for a Canadian savings account

A little preparation goes a long way. This is a rule that rings true for many things in life and it’s no different when it comes to opening a bank account. Preparing your documents ahead of time helps you avoid delays.

While most banks keep the application process simple, they still require certain documentation and eligibility checks. To open a savings account in Canada, you must meet the basic requirements set by federal regulations as well as the financial institution. Most of the time, the banks ask you to be a Canadian resident. But the Financial Consumer Agency of Canada says that banks must allow anyone who meets identification requirements to open a retail deposit account. This means, in some cases, non-residents are eligible to apply for an account.

Age also matters. Usually you need to be the age of majority in your province or territory, which, in Canada, means age 18 or 19. Some banks do offer youth or student accounts for minors, though they still require parental consent.

Step-by-Step: How to Open a Savings Account in Canada

Step 1: Gather your identification and documents

Before you begin your application, the first step is to start by gathering the following:

• A valid piece of government-issued ID. This could be a passport, driver’s license, permanent resident card, or other provincial ID card. The document must be the original. No scans, pictures, or photocopies allowed.
• Proof of your permanent home address
• Employment and income details. Though you can open a bank account without a job.
• Your Social Insurance Number (SIN), which is required for tax reporting if the account earns interest.

Step 2: Compare Savings Account Options

With your documents ready, the next step is to decide which type of savings account fits your needs. Just like there is a clear difference between savings vs chequing accounts in Canada, not all savings accounts are built the same either. Some offer higher interest rates. Others come with digital tools or in-branch support. Take a few minutes to compare your banking options, as it can save you both time and money down the line.

What to look at as you decide which bank is best for you:

• Interest rate: Focus on the standard rate, not just the promotional offer. This is the rate you’ll earn over the long run, so it makes a difference when choosing the account.
• Promotional period: Some banks will boost your interest rate for the first few months. If you sign up for one of these accounts, be sure to note when the promotion ends and what the regular rate will drop to.
• Monthly fees: Some savings accounts come with no additional fees, but not every account works this way. Look into the details; even small fees can reduce your overall return.
• Minimum balance rules: Check to see whether you must maintain a certain account balance in order to avoid fees or to earn a higher rate.
• Transaction limits: Some accounts limit the number of withdrawals or transfers each month. If you plan to move money out of your account on a frequent basis, the transaction costs and limitations will make a difference.
• Mobile banking and online tools: Look for budgeting features, automatic transfers, and alerts. For those who prefer to bank digitally, consider the quality of the bank’s mobile application as well.
• Personal goals: What are you going to use the account for? Are you planning to build an emergency fund? Or are you simply looking for a place to put short-term savings? The answer to these questions can help point you in the right direction.

Step 3: Choose How You Want to Apply

Once you know which savings account and financial institution fits your needs, the next decision is how you want to open that account. Today, there are several options and each one has its own advantages. Remember, though, the best option is the one that you’re most comfortable with.

• Online application. Today, this is a popular option. It’s fast, convenient, and available at any time of day. Digital banks and other institutions even encourage this method because it helps streamline the process. It benefits you as well because you can start earning interest right away. If you prefer a self-serve approach, this is the easiest option.
• In-branch application. Some Canadians would rather speak with someone or have their documents verified in person. If this is you, visiting a branch might be the right choice. This route is also helpful if you’re new to Canada or want advice on choosing the right account.
• By telephone. Some banks offer phone-assisted applications, especially for existing customers. This option works well if you want guidance but prefer not to visit a branch in person. It’s important to note, though, that you will still need to upload your ID or visit a branch for in-person ID verification.

Your choice on how to apply for a new bank account will ultimately depend on how much support you want and how quickly you’d like to finish the account set-up process.

Step 4: Complete the Application

With your account choice made, now it’s time to fill out the application. The bank will ask for your personal information including your full, legal name, address, and employment details. You’ll also go through an identity verification step using your government-issued ID.

As part of your application, you will select your account preferences. This is where you decide whether or not you want e-statements and which chequing account you want to link. If you apply online, you’ll also set up your login details and multi-factor authentication to keep your account secure.

Step 5: Funding Your New Account

Once you’ve finished your application and have a new account number, the bank will ask you to make your first deposit. You can do so by transferring money from an existing chequing account, sending an e-transfer, or depositing a cheque or cash in-branch. Some banks require a minimum deposit while others let you start with any amount, so ask your financial institution for details on the specifics of your account. The key, though, is funding your account early so you can begin earning interest right away.

Takeaway

Opening a savings account in Canada is straightforward when you break it down into easy-to-follow steps. Once you gather your documents, compare your options, and decide how you want to apply, everything moves quickly. It’s an important process though, as the right account gives your money a safe place to grow while staying accessible to help you meet your goals.