CanadaPinoys

When you arrive in Canada, one of the first things you need to do is open a bank account. The 5 top banks in Canada are as follows:

• Royal Bank of Canada (RBC)
• Toronto-Dominion Bank (TD Canada Trust)
• Bank of Nova Scotia (Scotiabank)
• Bank of Montreal (BMO)
• Canadian Imperial Bank of Commerce (CIBC)

The two types of accounts you will want to open is a Canadian dollar checking account and a US dollar savings account. You will want at least one set of check books with your checking account. You will need to issue checks for a number of things like rent, and blank checks for direct deposits into your account (eg. Child Tax Benefit can be deposited to your account every month vs receiving a paper check that you will need to go to the bank and deposit in person.) Likewise, you will want a US dollar savings account as you will want to deposit the funds you brought from the Philippines into that account. Most of these banks should have internet banking features that will greatly simplify how you keep track of your funds, and how you pay for bills. Before heading out to any bank, be sure to check the bank website or call them ahead of time to ensure that you have all the required documents and identification. At a minimum you will want to bring your permanent resident card and your passport. Some banks or branches will require you to set an appointment to open an account. Others will entertaiin walk-in clients.

Which bank to choose?

When I first arrived, I did not take a lot of time trying to compare rates and services of the various banks. I just went with the recommendation of my friend. My biggest consideration was accessibility. I didn't have a car, and I knew that I will be moving to my own apartment as soon as possible. Therefore, I needed a bank that was close to where I was living, but also had enough local branches and ATM locations where I can do my transactions (ie. withdrawals). You can always check the banks' websites to compare rates and locations.

What kind of Canadian dollar checking account to use?

When I first arrived in Canada in 2001, I was surprised to learn that I had to pay the bank to keep my money! There are many types of checking accounts to choose from. However, you will find that most of these banks just vary the number of fixed transactions every month for a fee (usually as low as $4 per month to about $13 per month.) These are samples of the types of transactions that will count towards your monthly limit:

• Interac Direct Payment purchases (eg. This is using your bank card to pay for purchases at a store or grocery.)
• Check payments
• ATM withdrawals
• Internet banking bill payments 

The banks will also waive their monthly fee if you keep a minimum monthly balance (usually it is as low as $1,500 per month to around $3,500 per month.) Therefore choose according to the number of transactions you anticipate you will be doing each month. Don't skimp and choose the cheapest package with only 10 transactions a month. Remember, you can use your bank card like a portable ATM machine. When you buy groceries or personal items like clothes, you can use your bank card and pay by "debit". The money is debitted from your bank account, and each payment is counted as one transaction. You will find that if you reach your monthly transaction limit, you will have to pay a per transaction fee... Ouch!

What about your US dollars?

Since you will have most of your "baon" in US dollars, you will need to open a US dollar account. There are two types of accounts - Checking and Savings. I find that most of the banks have very different offers when it comes to US dollar accounts. I find that my US Savings Account with Scotiabank fits my needs nicely. I only need to maintain US$200 per month. Likewise, I was able to get a US Dollar check book (for those rare situations when I need to issue a US Dollarcheck) without having to maintain a high minimum balance.

Now that you've covered the basics, I will give you another tip that will give you free money and increase your savings in my next article entitled - Free $25 and Grow Your Money!

In the Philippines, there is usually no finance to manage. For those whose financial lives have changed for the better in Canada, managing money presents a new challenge. Below is a gist of the more important aspects of managing your finances in Canada.

RRSP is a kind of savings that you use for your retirement. It is encouraged by the Canadian government because the government does not want you to be its liability in your old age.

Whatever you keep aside for your RRSP is deducted from your taxable income for the year. The limit of your RRSP savings for the year is 18% of your income (maximum $13,500). If you do not maximize your RRSP savings for the year, you can make up for it in the future.

One strategy for managing your RRSP is to put more in it as your income grows. This way, you end up in a lower income bracket. When you withdraw your RRSP savings after twenty years or so, it becomes taxable income. However, since you will be retired and probably will not have any other income, you will be in a low, if not the lowest tax bracket. More importantly, your savings would have grown substantially by then because of the power of compound interest (your interest earning interest).