Banking

Canada is home to one of the most robust financial systems in the world. The banking landscape in Canada is dominated by the ‘Big 5’ which represent the five largest banks in Canada. As of 2021, the Toronto-Dominion (TD) Bank is the biggest bank in Canada measured by assets. Other members of the Big 5 include the Royal Bank of Canada (RBC), Bank of Nova Scotia (BNS), Bank of Montreal (BMO) and Canadian Imperial Bank of Commerce (CIBC).

The Federal Deposit Insurance Corporation (FDIC) provides deposit insurance up to US $250,000 to depositors that place their money with registered American banks. The FDIC’s deposit insurance does not extend to Canadian banks. Instead, we have the Canada Deposit Insurance Corporation (CDIC) which insures deposits held within Canadian banks up to a sum of CA $100,000.

NSF is short for ‘Non-Sufficient Funds’, and is also colloquially called a ‘bounced check’. Simply put, NSF means a situation where the balance in the bank account is lower than the amount of money presented on the check provided. NSF notices may cause fees to be levied on the account holder as a penalty.

If you have been asked to write a post-dated cheque, this means drafting a cheque with a date payable in the future from when the cheque is being written. For example, if the cheque was written on March 30th, 2022 for May 1st, 2022, this would be an example of a post-dated cheque. In our day-to-day lives, post-dated cheques are most commonly given to landlords by tenants for rent payments that are due at the beginning of each month.

If you have a cheque that you are writing or want to cash in, you will notice some numbers on the bottom of the cheque. The first number will be your transit number (usually 5 digits). The second number will be your financial institution’s number (usually 3 digits). Lastly, to find the account number on your cheque, look for the number with 7 digits.

The meaning of an e-transfer is the electronic transfer of funds between personal and business accounts. This capability is available at participating Canadian banks, and enables customers to make inter-country payments quickly and seamlessly without requiring the bank account information of the beneficiary. The only requirement for an e-transfer is for the beneficiary to have a Canadian account with a participating Canadian bank and an email or phone number that the e-transfer notification can be sent to.

There are several financial institutions (including credit unions) that offer chequing accounts without charging any monthly or annual fees to depositors. To help you compare different chequing account offerings from banks with fees, as well as banks with no fees, we have developed a chequing accounts comparison tool.

Most retail bank branches in Canada work a 6-day week comprised of Monday through Saturday with Sunday being closed. However, there are certain branches of TD and CIBC that continue to remain open on Sundays as well. A full list of bank branches open on Sunday can be found on the specific bank websites. For day-to-day banking tasks though, it may be worthwhile to conduct them online or through the banks’ mobile apps to save time. Electronic banking capabilities are open 24/7 with the exception of maintenance downtime.

Although the premise of regular and high-yield savings accounts is the same, there is one fundamental difference. High-yield savings accounts offer a high rate of return on deposits which can be up to 10x of that found in a regular savings account. This makes the high-yield savings account more attractive for depositors looking for slightly higher growth on their deposits.

A joint bank account is a chequing or savings account that has two or more named beneficiary owners who can each withdraw from or deposit funds into the account. At the inception of a joint bank account opening, specific permissions are provided as to who can conduct specific types of activities on the account.

The meaning of a neobank is a bank that conducts the entirety of its operations online without a physical retail branch presence. Also referred to as challenger banks, neobanks are rising in popularity and prevalence as consumers increasingly adapt to accessing banking services via a computer or mobile phone.