Banking 101

Banks provide so many products and services, so getting started can be overwhelming. How do you find out which is one right for you?

It’s important to know what options are available. Banking is not limited to just the Big Five (RBC, TD, Scotiabank, BMO and CIBC). You also don’t have to go with the same bank the rest of your family uses. You need a bank that caters to your specific needs and priorities.

Below are some things to consider when choosing your bank and how you use your credit and debit cards.

Checking vs. Savings Accounts: What’s the Difference?


  • Purpose: Day-to-day spending
  • Monthly Fees: Yes
  • Interest Rates: None
  • Transactions: Unlimited or monthly limit
  • Incentives: Waived fees for carrying minimum balance or bundling with other products


  • Purpose: Emergency fund and short/long-term saving
  • Monthly Fees: None
  • Interest Rates: Little
  • Transactions: None
  • Incentives: Receive higher interest rates as you save more money

Keep in mind, this does not cover everything. With all the various banking institutions that exist, there are definitely some exceptions.

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Deciding Where to Bring Your Money

Now that you have a better idea of these accounts, you might be wondering where you should bring your money. Let’s go over three methods: traditional banks, direct banks and credit unions.

Traditional Banks

The brick-and-mortar banks are what you will encounter the most. The main advantages of traditional banks over the other two alternatives are the numerous locations and the ability to interact one-on-one with a representative. Being able to develop a personal relationship with your bank can be beneficial for negotiating better rates, assuming you’ve been a long-time customer. As you explore this option, you will notice these banks have student checking accounts. These accounts are often free but have limited monthly transactions.

Note that banks may automatically change your account type upon graduation. Be mindful of this so you are not caught off guard!

Direct Banks

As mentioned earlier, banks are not just limited to the Big Five. It would be wise to look at direct banks such as PC Financial and Tangerine. These institutions are primarily online-based but have little to no fees at all – even for their checking accounts! The companies also offer competitive rates on both borrowing and saving. If you don’t have the need to visit banks in-person, they may be a good alternative to the traditional banks. If you need to withdraw cash, you can access one their partnered Automatic Banking Machines (ABMs) free of charge.

Credit Unions

The last alternative you could look into are credit unions. One of the key differences between a bank and a credit union is that you’re not necessarily a “customer” of a credit union but rather a member. If you decide to join a credit union, there is generally a $25 initial deposit to become a member (which you will get back if you decide to leave). When you buy into the union, you are essentially a shareholder of the company. Members of a credit union will generally have better borrowing and saving rates as well as fewer fees than a traditional bank. Credit unions are smaller in scope than traditional banks so physical establishments are harder to come by.

With all these institutions and their various products, it can be very time consuming to do thorough research. Luckily, the Financial Consumer Agency of Canada (FCAC) has you covered. The website has anAccount Selector Tool which includes a comprehensive database of all bank accounts. You can filter by services, discounts and type of account.