Canadian Banking Industry Information for Foreigners/Americans
First, I'll give a brief introduction to banking in Canada before providing the information on how to open a Canadian bank account as a foreigner.
Canadian banks are regarded as some of the most stable in the world. They've been relatively untouched by the recent "credit crunch", and their stock prices have recovered quite well. The Canadian banking industry is relatively uncompetitive, which is why account fees and higher lending interest rates (and low "Term Deposit"* rates) allowed them to weather the storm so well. The Canadian government makes it very difficult for foreign banks to enter into Canada and compete in the retail banking market. So far, foreign banks like ING Direct, HSBC and Ally only operate online-only high-interest savings accounts, largely without chequing privileges, and these accounts will be unavailable to foreigners.
Generally, a no-monthly-fee Canadian bank account is only available if you keep a sufficient minimum deposit (say, $1000) in the account throughout the month. Otherwise the fee is anywhere from $3.95 to $24.95/month depending on account type.
Most Canadian bank accounts are insured through the CDIC, which is a similar institution to the FDIC, but there are some differences, so be sure to become familiar with them. One key difference is that foreign currency deposits are not insured, so if the bank goes under, the CDIC won't come to your assistance. The chances of one of the Big 5 banks failing is very low, but not zero.
The Canadian banking industry is far more centralized than the US banking industry. What I mean by that is that 5 banks control 90%+ of retail banking across the whole country. Over the past couple of decades, these banks have been increasingly known by their acronyms rather than their full titles. These banks are:
- TD Bank (aka Toronto Dominion Bank) - though they own the US-Based TD-Bank, they're not at all integrated
- RBC (Royal Bank of Canada)
- BMO (Bank of Montreal)
- CIBC (Canadian Imperial Bank of Commerce)
- ScotiaBank (Bank of Nova Scotia)
They all have extensive retail presences across Canada.
A listing of their US$ Account Offerings are here. Some even offer Euro Accounts.
All of these banks should be happy to clear your cheques (yes, it's spelled that way in Canada) from the USA without any additional fees, but there may be a long hold period. Any branch will accept US$ Cash (bills only). Certainly money can be wired for a quicker transaction.
ScotiaBank is a part of the Global ATM Alliance, meaning that you can use your Scotia Debit Card fee-free to withdraw money at any Bank of America ATM. Supposedly the exchange rates are excellent as well.
Opening the Actual Canadian Bank Account
You don't have to be a Canadian resident or citizen to open a Canadian bank account, nor do you have to have any plans on immigrating/moving to Canada. Any of the five banks listed above should open up bank accounts for non-Canadians. You can open one up as a visa student or even a day visitor. As far as I know, you will need to physically visit a branch to set up an account, though there are some exceptions for those planning on moving permanently to Canada. All that should be required as documentation are your passport and another reasonable piece of identification, I'd suggest a local driver's license, national ID card and/or credit card as the second piece.
I am not aware of any way of setting up an account without physically visiting a branch except for:
- HSBC Bank can sometimes set up an account locally where you live, and then transfer it to their Canadian division when you move. Keep in mind that they don't have much of a retail presence across Canada.
- BMO has a "Newcomer to Canada" program, where you send in a painful mess of forms, including one your lawyer needs to fill out, which only allows you to send one wire transfer to it and they'll keep the account active for a max of 12 months until you do permanently move to Canada
It is best to make an appointment with the branch that you wish to visit, so they can have the best person available and the time to properly fill out all of your forms. Canadian banks tend to have very good customer service, since the industry is profitable and mature (so they try to retain whichever customers they can, and recruit any new ones that come along their way).
Based on service and hours of operation, I'd rank the banks as so: TD > Scotia > BMO > RBC > CIBC. TD tends to have the best hours of operation. Look at all of the account offerings to find which would be best for you.
US LLC and accounts in Canadian Banks
Can a US Company, (an LLC), open a Canadian bank account without disclosing directors and other information, and if so which bank or banks are amenable to this?
Firstly, I'm really not sure
Firstly, I'm really not sure about this. but beware of the IRS implications of doing so with regards to reporting foreign bank accounts.
Secondly, the Canadian bank would probably want information on directors and such. When I opened a Canadian account for a Canadian corporation, they wanted a copy of the Articles of Incorporation as well as some other info.
Call one up and ask!
opening Canadian bank account
Can we open Canadian bank accounts (as US citizens) without SS# or EIN?
canadian banking for us cit.
canadian banking for us cit.
canadian banking
are canadian bank accounts secure from lawsuit or jugjement ? JD
Canadian dollars with American Banking
If you're like me then you don't really want to make arrangements to go to Canada to open an account - especially if you live nowhere near the border. I use Everbank - an online bank in America. Here's what I did, maybe you want to check it out for yourself...
1. Open a Yield Pledge Checking account online. This is a standard checking account (earns interest) with check writing and debit card access.
2. Open a World Markets account (a separate business unit within Everbank). With this account you can buy nearly any currency you want including Canadian Dollars. You can also buy gold and silver - not paper gold and silver, actual gold and silver coin held for you in a vault (I think you can have the coins delivered to you for a fee, but if you want to hold it yourself why not go to a respected local dealer?)
3. Link the two accounts together. You can now transfer money freely between your checking account and your World Markets account. Putting your US$ into Canadian$ this way essentially means you are buying Canadian$ as an investment.
4. Link your Yield Pledge Checking to any external bank account.
Here's what I do: Client pays me in US dollars, I deposit the check into my local bank account (for convenience), once it clears I transfer the US dollars into my Everbank checking (a few simple clicks - a simple money transfer between banks), then transfer again into Canadian dollars (a simple internal bank transfer). The process takes a few days longer than if I had an account at a Canadian bank, but it's super flexible as I have access to many different currencies. Canadian dollar suddenly not looking good? Transfer it to Australian Dollars or Danish Krone (both looking good). My purpose is not to get Canadian dollars, but to protect my money and this is the most flexible way of doing it that I've found (without having to get on a plane).
Some More Info
CDIC protection only covers Canadian Dollar Accounts up to $100,000 per CDIC Member Bank. If you open a Checking Account, you get $100,000 coverage. If you open a Saving Account and a Checking Account - your coverage is still only $100,000. The only suggestion is to open a savings account at more than one institution that has CDIC Insurance coveage. Opening more than one savings account at the same bank, but different branches doesn't count - your coverage will still be $100,000.
I suggest opening an account at either TD Canada Trust since they have a large US entity, TD Bank on the East Coast and are open 7 days a week. If you have an account at TD Bank in the US and a TD Canada Trust account in Canada...you can call one 1-800 number to transfer funds back and forth, within the day. I believe that Harris Bank in the Mid-West has a similar service with their parent company Bank of Montreal in Canada. RBC (Centura) Bank in the South can do it for their RBC Royal Bank of Canada but as they are looking into selling their US Banking Unit soon, that may screw things up. In all cases, you have to show up in person with 2 pieces of ID to open an account in Canada - US Passport to prove citizenship, State Driver's License or Major Credit Card in your name. Also bring a small amount of US cash to deposit.
As far as I know, Canadian Banks don't involve the IRS for the opening of basic savings/checking accounts (they barely pay any interest if any) - Brokerage Accounts are a different story where there is an IRS form to fill out. They may just use a Social Security Card for ID purposes with regards to opening the checking/savings account - after they record the number on your signature card, there really isn't any other use for it by the bank at branch level. Americans now have to check a box on their 1040 if they have any foreign based accounts over $10,000 - so the whole IRS/SS thing with the bank is moot.
American Opening Canadian Bank Account
I live in a border town and am considering opening a Canadian Bank Account. I was told by TD Bank in Canada that I would need 2 pieces of photo ID to open an account. I asked specifically if they required a US Social Security Number to open an account, and they said "yes". I asked if they had any reporting requirements with the US IRS, they said "no", but I'm not sure I trust what they say. Why the hell would they need to know my SS number if they don't have some sort of communication with the IRS? Anyone have any idea if I could trust a Canadian bank not to communicate with the IRS?
to pedro
Hey pedro, you can get a foreign currency account with an online bank called everbank. Also, if you are near california, there is a chinese-american bank called cathay and they offer foreign currency accounts too. Both banks have fdic insurance for depositors. I hope this helped. Good luck.
American seeking Canadian Bank Accountg
I am impressed with the knowledge that no Canadian banks have failed why we lost over 700 in the past year. I have been stunned to find that a bank I do business with is rated D-, that is just since September when was rated a C by Weiss Ratings. Any information would be welcome. Thanks in advance.
American opening Canadian bank account
How do you overcome the foreign currency deposit exception to CDIC protection.
I want to open an account as a safety measure against the decline of the US dollar but I want the CDIC protection.
What's the most efficient way to just open a personal savings account there ?
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