Best Banks For Students In Canada…

Students often look for banking options where they can save more than they lose in fees. Many banks, brick and mortar as well as online only banks, offer student options that have attractive features for students and low fees. 

This is important since many students need to pay rent, bills, educational expenses, etc.; they also need to manage loans, scholarships, grants, etc. So, creating a student bank account can enable students to learn good financial habits with savings and credits.

Before diving into what to look out for in different student bank accounts, it is important to know your goals, and needs when banking. For example, do you need a chequing account, savings account, or both? Both accounts have their own purpose, even in an ever increasing digital world. 

What to look for in a student bank account

A student bank account allows those enrolled in university, college, or CEGEP to open a chequing, or savings account. Opening a chequing account also gives students a debit card to conduct daily transactions. 

While you may still get a debit card with a savings account, the two types of accounts serve different purposes when it comes to how financial institutions set up the accounts.

You’ll want to start with a chequing account, but a savings account is also important to build good habits like “pay yourself first”. Here are a few things to look out for when picking the best option for you.

Difference between a chequing and a savings account

• Chequing Account: This account is the day-to-day account used to buy your coffee, meals, or pay for parking. This account is expected to have a lot of transactions.
• Savings Account: This account is generally meant to save money, and will have a higher interest rate than the chequing account. This account is expected to have very few withdrawals as it is meant to accumulate money.

The need to separate the accounts is to allow for the financial institutions to use the money you deposit in the savings account and loan the money to other customers. As such, the financial institution pays you interest in order to loan the money to others.

Bank Account Fees

Banks often offer low to no fees for students, but it will go up once you are no longer a student. It’s a short-term incentive compared with online banks or credit unions where there are often no fees even after you are no longer a student.

These fees can vary and cover a broad range of services such as 

• maintenance fees, 
• bank transfer fees, 
• overdraft fees, and 
• ATM withdrawal fees across networks. 

Minimum Balance Requirement

It is essential to look out for balance requirements; some banks will charge a fee if you go below a certain balance in your account.

It may not be the case for a student account, but be sure to ask and clarify with the financial institution.

Ability To Pay And Receive Funds

As a student, you may need to pay your tuition and receive grant money; therefore, you need to ensure your bank account will allow this. 

Unlimited e-Transfers And Debit Transactions

Since banking is often done with debit and online transactions, you want to ensure you do not pay the transaction fees. Therefore, a free, high, or unlimited number of e-transfers and debit purchases is something to look out for.

Convenient Branch Locations

Although many services are often offered online, some services might require a visit to the branch. However, many services can be handled over the phone with a bank representative. Therefore, branch locality may not be important to you. 

However, it is something to keep in mind since some branches may not be in a convenient location. When it comes to loans, such as school loans, being able to have a face-to-face with a person can go a long way to be understood and helped.

ATM Access

Having a convenient branch may not be as important but having access to an ATM may prove necessary sometimes. In addition, there may be times when cash is necessary when debit and credit are not available. 

One thing to be aware of is that different financial institutions are part of different ATM networks. The banks will tend to share their network, while the credit unions will share theirs.

One of the best known networks in Canada is the Interac network. The other popular ATM network is The EXCHANGE used by many credit unions.

Perks

Different banks offer different perks depending on your account, or credit card. Therefore, comparing different accounts that best match your livelihood is important. 

If you are a movie lover, Scotiabank has a Scene card for example. That could be one of the most popular perks for students.

A perk to look out for is the sign-up bonuses that banks often offer students. Another perk that may pertain to you is if the account has a good interest rate, meaning that your account can make money over time. 

Other potential perks are reward points and exclusive offers.

Student Credit Cards

Credit cards can be scary since many students do not want to fall into debt. However, if used responsibly, it can be an important financial tool. 

Starting your credit history early can be beneficial to building your credit score. Using a credit card responsibly can also help students learn good spending habits.

To be responsible with your credit card, you must pay off the balance in full, and on time every month. If the credit balance is not paid off on time, the banks will charge interest, leading to more debt. In the long term, it can be devastating to your finances and credit.

Therefore, when looking for a bank, it is important to consider what credit card options are available for students and what features and fees might be involved. This way, you can also check how much interest different banks would charge students.

As a student, having access to your credit card transactions on a mobile app can be important to understand your spending habits, and it could be easier to get a credit card from the same financial institution when you start just to see everything in one place.

International Students

There are additional factors to think about for international students when choosing a bank. For example, international students need to pay attention to how easy fund transfers can be done, the fees associated with transfers, and time restrictions. 

Money transfer from the home country becomes critical. Wise can be a good option but you need to ensure it works well with your local financial institution, as well as the one you choose in Canada. The big banks appear to be a solid option with Wise.

After Graduating

Most big banks will change your student account to a regular account once you graduate. This will most likely lead to having fees, and fewer perks. 

So, when deciding which bank to go with, it is important to look at the conditions for regular accounts. In addition, this may be a reason to investigate online banks since they tend to offer no-fee banking for everyone, not just students. 

Since many of the big banks grant you some time after graduating, you also have some time to decide on the next course of action for your banking needs after your student life.

The Big 6 Banks

The ‘Big 6’ banks describe the 6 biggest banks in Canada.

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

The big banks are notorious for having fees on everything but when it comes to student accounts, they tend to waive all fees, and often provide unlimited transactions.

Credit Unions

Credit unions tend to be offered within the province, but rarely across provinces. Below is a short list of the biggest ones.

Since credit unions are not for profits, they tend to have no fees for basic accounts and lower fees for more features.