As a student, one has different financial issues, and the correct bank account may be an essential part of managing your finances effectively. In Canada, most banks offer some student-specific accounts that, with the help of low or no-fee accounts, provide easy access to funds and options to build credit. But with all these options available, how do you choose the best student bank account for your needs?
The following blog will guide you through various aspects you should look into when choosing the best student bank account in Canada so that you can make an informed decision that is better suited to meeting your financial goals. We look at the types of student accounts available and the key features to look for in such an account, and then compare what major Canadian banks are offering to help you make your best choice.
Why a Student Bank Account Matters
Being a student often means going through life on a shoestring budget, and each dollar you save in fees or earn in interest can make a lot of difference. Student bank accounts are designed to look after the needs of young adults who have not yet earned a regular income but need to handle their expenses judiciously. Be it paying for tuition and rent or merely trying to keep track of living expenses, the advantages of a student bank account can be quite a few:
- No or low monthly fees: Most student accounts waive the monthly service fees that are common with regular bank accounts.
- Unlimited transactions: As a student, you’ll likely need to make frequent transactions, whether for buying books, paying rent, or dining out. Many student accounts offer unlimited or a large number of transactions per month.
- ATM accessibility: You’ll want an account that offers access to a wide range of ATMs so that you’re not stuck paying extra fees.
- Perks and rewards: Some student accounts come with added perks such as discounts, loyalty points, or even options to build your credit.
Choosing the right student bank account can save you money, make banking more convenient, and help you build a strong financial foundation for the future.
Types of Student Bank Accounts in Canada
Before diving into the specifics, it’s essential to understand the two main types of bank accounts typically offered to students: chequing accounts and savings accounts.
Chequing Accounts
Chequing accounts are designed to deal with day-to-day transaction requirements. You can deposit, pay bills, withdraw cash, and buy things using a debit card. These also usually have features like the following:
- Unlimited or fixed free transactions
- Access to online and mobile banking
- Ability to have paycheck or scholarships directly deposited
- Interac e-Transfer services for sending/receiving money
As a student, you will be looking to have a chequing account with little to no monthly fees and one through which you can have easy access to your money, whether it is for paying your rent, buying groceries, or living expenses.
Savings Accounts
A savings account is meant for the money that you do not envision needing to have direct, quick access to. Most savings accounts pay higher interest than chequing accounts but will only allow a certain number of free transactions per month before applying fees. A student savings account is a great place to set aside money for big purchases – like tuition or a trip.
- Savings accounts tend to carry with them:
- Higher interest rates against your balance
- Limited numbers of free transactions per month
- Minimal charges for basic account maintenance
If you want to save money, along with the chequing account, you can open a savings account in order to build up an emergency fund or have money set aside to cover future expenses.
Key Features to Look For in a Student Bank Account
As you compare different options for a student bank account, there is more than one consideration to be compared. Some may offer more flexible accounts, while others may offer better perks. Here’s what you want to look at:
Monthly Fees and Transaction Limits
One factor above others when choosing a student account pertains to the charge. Most banks offer no-monthly-fee student accounts, but it may well be worth your while confirming that this indeed applies throughout your studies. Certain accounts will waive their fees for a limited time or cap the number of free transactions you can make per month.
- Unlimited transactions: Some accounts allow unlimited debit card transactions, withdrawals, and bill payments without additional fees.
- Monthly fees: If an account charges a fee, check if it offers discounts or waivers based on student status.
Access to ATMs
The fees for using the ATM add up rather quickly if you continually need access to cash. Some accounts allow you to make free withdrawals through an extensive network of in-branch and ATM locations across Canada, while others may charge you a fee if you use an out-of-network ATM. Be looking for an account offering:
- Access to a large ATM network: The more ATMs available, the less likely you are to pay withdrawal fees.
- International Access: If you plan on studying abroad or travelling, check for accounts that offer low or no fees for international transactions and ATM use.
Overdraft Protection
While nobody expects to overdraw their account, it does happen when the funds are tight. Some student accounts are offering overdraft protection. This means if you spend more than the amount in your account, you will be covered. Sometimes, there is usually a fee that one has to pay, though very minimal. Details include:
- Fee-free overdraft: Some accounts may offer a buffer where you can overdraw a small amount without being charged a fee.
- Standard overdraft: If you regularly run into overdraft situations, look for accounts that offer low-fee overdraft protection.
Online and Mobile Banking Features
This means ease of access to your account from your smartphone or computer. This is quite important for students who are always on the move. While most of the banks in Canada have online and mobile banking, the quality and features differ.
- Mobile apps: Ensure the bank’s app allows you to easily transfer money, deposit cheques, pay bills, and check your balance.
- Interac e-Transfers: These are essential for sending and receiving money quickly between Canadian banks, often free of charge with student accounts.
Credit Card Options
Building up a good credit history as a student is very important, especially if you will ever need to apply for loans or big purchases in the near future. Many accounts available for students include low-limit or secured credit card options, which are ideal for young people just starting their credit history.
- Student credit cards: These often come with lower limits and no annual fees.
- Secured credit cards: These require a deposit but can help you establish or rebuild credit.
Interest Rates
While chequing accounts rarely offer interest, some student savings accounts offer competitive rates that help your money grow. If you plan on saving money for long-term goals, travel, or a postgraduate education for savings accounts with higher interest rates and no fees.
Special Perks for Students
Many banks provide added perks specifically for students. These can range from discounts on purchases, movie tickets, or even offers for opening a new account. Examples of perks include:
- Discounts on transit passes
- Loyalty points on debit or credit card purchases
- Free or discounted services, such as online banking tools or tax filing software
Comparing Major Canadian Banks for Student Accounts
Now that you know what to look for, let’s compare some of the most popular student bank accounts in Canada.
RBC Student Banking
RBC has a no-frills, no-monthly-fee student banking option, offering up to 25 free transactions per month. It also offers unlimited transactions in a more premium student account for a monthly fee and may be a better choice if you make several transactions every month.
Key features:
- No monthly fee
- 25 free debit transactions per month
- Interac e-Transfers included
- Access to RBC Rewards
TD Student Chequing Account
TD offers a no-fee, unlimited monthly student chequing account. Included in this account is an overdraft protection of $1,500 and access to the bank’s mobile and online banking. TD is good for a student who wants unlimited transactions without additional fees.
Key features:
- Unlimited transactions
- No monthly fee
- Free Interac e-Transfers
- Option to add overdraft protection
Scotiabank Student Banking Advantage Plan
Scotiabank has one of the best student accounts available in Canada. This is especially true if one considers maximizing rewards. The Scotiabank Student Banking Advantage Plan comes with limitless debit transactions and lets one earn points through the Scene+, redeemable for movies, travel, and more.
Key features:
- Unlimited transactions
- No monthly fee
- Free Interac e-Transfers
- Earn Scene+ points on debit purchases
CIBC Smart for Students
Another superb option for students is CIBC’s Smart for Students account. It allows unlimited transactions, free Interac e-Transfers, and access to mobile and online banking. It further provides a free overdraft facility in the first four months from opening, which can save one’s skin when living on a really tight budget.
Key features:
- No monthly fee
- Unlimited transactions
- Free Interac e-Transfers
- Optional overdraft protection
BMO Student Chequing Account
BMO informs that it has a no-fee student account with unlimited transactions. In fact, it offers up to $500 in overdraft protection with no monthly or extra fees for its mobile and online banking services. BMO may be your best option if you want some flexibility in daily banking.
Key features:
- No monthly fee
- Unlimited transactions
- Free Interac e-Transfers
- Optional overdraft protection
How to Open a Student Bank Account in Canada
Opening a student bank account in Canada is a straightforward process. Here are the steps you’ll typically need to follow:
Gather Required Documentation
To open a student account, you’ll need to provide identification and proof of enrollment in a post-secondary institution. Here’s what you might need:
- Two pieces of government-issued ID (passport, driver’s license, etc.)
- Proof of enrollment (such as a letter from your university or student ID)
- Your Social Insurance Number (SIN) if you’re applying for a credit card
Visit a Branch or Apply Online
Most of the banks allow the application for student bank accounts online or at any branch. In that case, you will need to scan your documents and upload them. Visiting a branch may imply that your application process can be faster since the staff at the bank can directly verify your documents.
Choose the Right Account Type
Be express whether you want to operate a chequing account, a savings account, or one that can serve both purposes. You may then have an explanation from the bank representative concerning the options available, the benefits accruable, and the limitations attached to each of the accounts.
Set Up Online and Mobile Banking
When your account is opened, enroll in online and mobile banking to be able to manage your account, transfer funds, pay bills, and all other financial transactions with the convenience of your phone or computer.
Consider Additional Services
If you are looking to build credit, you might want to apply for a student credit card or any other financial product the bank is offering. Added to that, most banks have additional services that include the issuance of student loans, credit lines, and financial advising, which are all very helpful in helping you navigate your finances as a student.
Final Tips for Choosing a Student Bank Account
Here are some final tips to keep in mind as you choose a student bank account in Canada:
- Compare multiple options: Don’t settle for the first bank account you come across. Take the time to compare accounts from different banks to find the one that best suits your needs.
- Ask about perks: Some banks offer limited-time promotions for opening a new account, such as cash bonuses or reward points. Be sure to ask about any current offers.
- Understand the fees: Even if a bank account is labelled as “free,” there may still be fees for certain transactions, such as using out-of-network ATMs or going into overdraft. Make sure you understand all potential fees before committing to an account.
- Consider your long-term needs: While you may be focused on finding a bank account that meets your immediate needs as a student, it’s worth considering how the account will serve you in the long term. Some student accounts automatically convert to regular accounts after graduation, which could mean higher fees down the line.
- Monitor your account regularly: Keep an eye on your account activity and balances to avoid overdraft fees or other unexpected charges. Most banks offer email or text alerts to help you stay on top of your finances.
The Final Verdict
Having the right kind of student bank account in Canada can make a difference in how one manages their finances while pursuing higher education. A student may find the right account to suit his or her particular needs by considering a few things, like monthly fees, limits on the number of transactions allowed, services provided by online banking, and perks associated with an account. From unlimited transactions and easy access to ATMs to rewarding programs, big banks give students a lot to choose from.
Take time to consider your options, gather the necessary documents required, and start an account that better places you in the lead concerning your finances. By doing so now, you will be assured of financial success for a long time to come.
Know More: Student Direct Stream: Fast-Track Your Study Permit in Canada