Finance and Banking in Canada

Types of accounts in Canada
Finance and Banking in Canada

Savings Account
It is an account that is suitable for frequent transactions (receipt and withdrawal) and it is also possible to issue a batch of checks for this type of account.
The main difference between a savings account and a current account is that it does not accrue to the savings account. Banks usually pay a small interest rate on these accounts, and the interest rate depends entirely on the amount of your deposit. Most of the work of this type of account is done online or by going to ATMs and there is no need for a booklet.

Checking Account
It is a practical account with a small bank interest on its balance sheet.
Most current accounts do not pay interest or their interest rates are very small (sometimes 1% per annum or even less). Most of these accounts are monetary, meaning that you have to pay a monthly fee to the bank in order to have such an account. This can range from $ 3 to tens of dollars a month. Depending on the monthly amount you pay, there will be restrictions on your account. These restrictions are usually on the number of times you withdraw money from your account. Instead of paying a monthly fee, some banks will ask you to keep a minimum amount in your account to be exempted from the monthly payment or get a discount.
You can request a check book for the current account. This is possible as soon as you open an account. Sometimes it takes between 1 and 3 weeks for the check to reach you. In the meantime, you can request a temporary check from the bank.

Investment account
Investment accounts are opened for profit and there are different types. The least risky of these accounts is the ICG, or Guaranteed Investment Certificate, in which the principal is guaranteed by a bank or financial institution and a fixed or variable interest rate is accrued. These types of accounts can be short-term or long-term.

After opening a bank account, what loans can be used?
In Canada, there are various types of loans available to bank account holders, which can be repaid with the minimum required by financial institutions. The most important of these loans are the following:

• Reconstruction and renovation loans
• Self-employment loans
• Commercial loans
• Residential loans
• Agricultural loans
• Multiple loan facilities for immigrants and newcomers
• Investment loans
• Loans for construction
• Loans for personal projects
• Loans for industrial projects

Having credit to get a loan

Having credit in Canada allows you to buy something today and pay for it in the future.

Credit is used in Canada for a variety of purposes; Examples include:

• Mortgage
• Car loan
• Obtaining a line of credit for large purchases
• Obtaining a credit card to make everyday purchases easier

In order to receive these loans in Canada, you must have a good credit history. Credit history is determined by your track record of repaying previous loans.

Your track record is maintained by at least one of Canada's three major credit rating agencies. Credit rating agencies will give you a "credit score" based on the health of your financial performance. Factors affecting "credit score" include:

• Amount of loans requested (quantitative and qualitative)
• Loan application intervals
• Observance or non-observance of timely payment of bills

Banks and other financial institutions decide to approve a loan applicant based on reports submitted by credit rating agencies.

2 very important points

Failure to pay bills on time (such as phone bills, electricity, credit cards, etc.) will negatively affect your "credit score".

Be careful not to apply for a large number of loans at the same time; Because in addition to the negative impact on the "credit score", it may also have an impact on future loans.

Documents required to open a bank account
In general, to open a bank account, you need to provide two identification documents, at least one of which must be a photo. The submitted documents must be valid and original. (Photocopy is not accepted in any way) These 2 identification documents can be one of the following:

• Passport
• Permanent or temporary residence card
• Landing sheet
• Card containing social insurance number