How to open a bank account

5 steps to open a bank account

1. Decide what kind of account you need

Choose a savings account if you’re looking for a place to save money over a short period of time, but still keep it readily accessible. Choose a chequing account to keep money that you plan to use for day-to-day spending or to pay bills over the short termTerm The period of time that a contract covers. Also, the period of time that an investment pays a set rate of interest.+ read full definition. You’ll earn less interest than with a savings account.

2. Look for an account with the services you’ll use most

In particular, think about how you’re likely to put money in and take it out:

• branch – make deposits and withdrawals using a teller or ATM
• debit card – buy something or get cash at a store
• cheques – pay bills
• direct debit – pay bills automatically from your accountAccount An agreement you make with a financial institution to handle your money. You can set up an account for depositing and withdrawing, earning interest, borrowing, investing, etc.+ read full definition each month
• direct depositDirect deposit A way to have money from your pay, investments or the government put into your account without a cheque. Example: You can ask the Canada Revenue Agency to deposit your tax refund directly into your bank account rather than mailing you a cheque.+ read full definition – have your pay put into your account
• Internet or telephone banking – for a range of transactions

3. Shop around to compare rates and fees

Understand the service fees you can be charged before you open an account. Look for accounts that charge the lowest fees for the services you need. And compare interest rates. They will vary across financial institutions.

4. Choose a financial institution and location

Choose one that has branches or bank machines located close to where you live or work.

5. Open your account

You’ll have to give personal information such as your address, date of birth, social insurance number, job title and phone numbers when you complete the account application. You’ll also need to show 2 pieces of acceptable identification. One of them must be from the government. Then make your first deposit.

Key point

Understand the service fees you can be charged before you open an account.