Opening a Bank Account in Canada after Incorporation

If you’ve recently incorporated a company in Canada, one of the essential tasks on your checklist should be opening a bank account. A Canadian bank account offers convenience and access to various financial services that will help you manage your business finances efficiently. Numerous advantages come with having a local bank account, including simpler access to financial services, better spending management, and credit growth. From receiving payments to paying bills and managing daily transactions, a bank account is a fundamental tool for establishing your business in Canada.

This blog will describe how to open a bank account in Canada after incorporation, the different types of bank accounts available, and the leading Canadian banks.

Types of Bank Accounts in Canada

There are numerous types of bank accounts available in Canada, each suited to a specific set of requirements and preferences.

Common Bank Accounts for Businesses

Here are some common types of accounts available for businesses:

• Savings Account: A basic account designed for storing funds while earning a small amount of interest. It’s suitable for keeping emergency funds or saving for short-term goals.
• Foreign Currency Account: Allows you to hold funds in currencies other than Canadian dollars. It is useful for frequent international transactions.
• Business Account: Designed for entrepreneurs and businesses, these accounts offer various features to manage business finances, such as multiple users, transaction limits, and account analysis.
• Investment Account: While not provided directly by traditional banks, investment accounts offered by financial institutions or brokerage firms allow you to invest in stocks, bonds, mutual funds, and other financial instruments.

Identification Requirements to Open a Corporate Bank Account in Canada

Before allowing you to establish a bank account in Canada, the bank needs to verify your identity using valid identification. You must present genuine identification documentation, and there are two strategies you can use to fulfill the identification (ID) criteria:

1. Two pieces of documentation from a dependable source:
2. One document should have your name and address.
3. The other should provide your name and birthdate.
4. Any documentation with your name and birthdate from a reputable source.

Procedure for Opening a Bank Account in Canada

Opening a bank account in Canada is a simple procedure that involves a few key steps. Whether you’re a newcomer or a resident looking to set up a new account, here’s a step-by-step guide to help you through the process:

Step 1: Research and Choose a Bank

Begin by researching different banks in Canada to find one that complies with your financial requirements and preferences. Consider aspects such as account types, costs, services, and branch locations. Popular institutions in Canada include RBC, Scotiabank, BMO, and CIBC.

Step 2: Apply in Person or Online

Once you’ve chosen a bank, decide whether you want to visit a bank branch physically or apply for an account online. Most major banks offer online account opening services, which can be convenient if you prefer a digital approach.

Step 3: Collect Required Documentation

Before going to the bank or applying online, ensure that you have the necessary documents ready. Commonly required documents include valid government-issued photo identification, proof of address, and Canadian company formation documents.

Step 4: Fill Out the Application Form

You have to fill out an application form, either in person or digitally. The form will request personal information, contact information, and details about your business. To avoid any delays, be careful to supply precise information.

Step 5: Provide Identification

When visiting a bank branch, bring your identification documents for verification. Bank representatives will need to confirm your identity prior to beginning the process of creating an account.

Step 6: Initial Deposit

Many bank accounts need an initial deposit to activate the account. The minimum deposit amount may differ based on the type of account you’re opening. Ensure you have the required funds available to meet the deposit requirement.

Step 7: Set Up Online Banking

If you’re opening an account that offers online banking services, take the opportunity to set up your online banking profile. This will allow you to manage your account, conduct transactions, and access various financial services digitally.

Can You Establish a Bank Account Online in Canada?

Yes, you can establish a bank account online in Canada. Many banks offer the convenience of online account opening to make the process easier and more accessible for customers.

Process for Opening a Bank Account Online in Canada

• Select a Bank: Choose a bank that offers online account opening and the type of account that suits your needs.
• Visit the Bank’s Online Portal: Visit the bank’s website to begin the online account opening process.
• Provide Personal Information: Present personal details, such as your name, address, date of birth, and contact details. Have valid identification documents on hand.
• Select Account Type: Choose the type of account you intend to create. The bank’s website will usually provide information about the features and benefits of each account type.
• Submit Documentation: Submit your identity documents as scanned copies via the online form or document upload feature on the bank’s website.
• Verify Identity: Complete identity verification steps as required by the bank, which may include providing additional information or answering security questions.
• Review and Fund the Account: Review the data you’ve provided to ensure it’s accurate before completing the account opening. You may need to make a deposit for the account to be activated.
• Receive Account Information: Once your account is properly opened, the bank will provide you with your account details, including your account number and any login credentials for online banking.
• Access Online Banking: Use the bank’s online banking system to manage your account, conduct transactions, and access a variety of financial services.

Leading Banks for Opening a Bank Account in Canada

Several leading banks in Canada are well-known and widely used for opening bank accounts. These banks provide a variety of services and account options to accommodate different financial needs. The banks are:

• Royal Bank of Canada (RBC): One of Canada’s largest and most reputable banks, offering a range of banking options for individuals and businesses.
• Toronto-Dominion Bank (TD Bank): Known for its extensive branch network and range of banking services, including credit cards, savings accounts, chequing accounts, and investment products.
• Scotiabank: A significant player in the Canadian banking industry, offering loans, investment opportunities, savings accounts, and chequing accounts.
• Bank of Montreal (BMO): Offers a wide range of financial services and products, including chequing accounts, savings accounts, credit cards, and investment options.
• Tangerine: An online bank providing savings accounts, investment products, and daily banking services without any fees, known for its user-friendly internet interface.

Types of Canadian Bank Account Services

In Canada, a range of bank account services are provided to meet the varying financial requirements of both individuals and corporations.

Common Bank Account Services

• Online Banking: Access your account and perform transactions through the institution’s website or smartphone app.
• Mobile Banking: Similar to online banking, manage your accounts, make transfers, and pay bills using a dedicated mobile app.
• ATM Services: Use ATMs to make cash withdrawals, deposits, account balance inquiries, and transfers across accounts.
• Debit Cards: Issued with chequing accounts, debit cards enable you to make purchases and access funds from ATMs.
• Credit Cards: Banks provide a range of credit cards, each with distinctive characteristics and advantages.
• Wire Transfers: Transfer funds electronically to other bank accounts domestically or internationally.
• Overdraft Protection: Prevents you from going over your credit limit by immediately replacing insufficient funds.
• Cheque Services: Order and use cheques for payments or transfers.
• Online Bill Pay: Set up and manage your bill payments through online banking.

Conclusion

Opening a bank account in Canada is a crucial step towards establishing your financial roots in the country. It allows you to manage your finances, meet your financial obligations, and work towards your financial goals. Choosing the right bank and account can significantly impact your overall experience as you embark on your new journey in Canada.