What Are 5 Most Important Banking Services in Canada?
The majority of banks in Canada offer similar types of services. Here are 5 of the most common services that they offer:
Banks offer many different types of loans, such as business loans or personal loans. A personal loan can help people make necessary payments like education expenses, renovations, car purchases, etc. When someone gets a personal loan, they receive a fixed amount.
At the same time, the borrower agrees to repay that loan, including interest over a certain period. The bank sets the loan terms, including the payment schedule and interest.
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Credit & Debit Cards
A credit card gives you access to credit or money that you can borrow instantly to pay for something. So, that you can immediately purchase something even if you don’t have cash, but you will have to pay back that amount with interest.
RELATED: How Credit card Interest Works in Canada?
Interests are usually low, but you will have to pay back that purchase on time to avoid being charged with additional interest. Credit rating is crucial in Canada’s banking system, and you need to maintain it correctly to get a good credit card.
You can get most credit cards either online or directly in a bank. If you clear out your bill each month, you don’t get any interest on your credit. Credit cards come in many different forms and for different uses. Depending on your credit score, you can qualify for Best, Better, or Worse credit cards.
You can use debit cards as an alternative payment method anywhere in Canada. In general, there are no fees associated with their use. That’s why a very small number of Canadians carry and pay with cash.
When you get a debit card, it needs to be connected to a chequing account. Unlike with credit cards, debit cards spend the money that you have in your account.
Cheques are still popular for payments where you can’t pay directly or using credit cards. It often involves paying rent through the mail, bills, or some other larger payments. When writing a cheque, it’s essential to have the amount in the account which you specified on the document.
If not, your payment won’t be completed, and the bank will probably charge you with a fee. This form of payment is best for recurring payments that only happen once a month.
ATMs or Automated Teller Machines offer a lot of conveniences. Using these machines, people can do various banking transactions like withdrawing, depositing, or transferring money from one account to another.
You can use credit or debit cards with ATMs, and depending on what kind of card you have, some ATMs will not be available. For example, closed-loop cards can only be used on the ATMs of the bank that issued the card.
On the other hand, there are open-loop cards like Visa or Mastercard that can be used on various machines and in stores. The fees and interest on your transactions depend on the bank, your card, and the ATM you are using.
Everyone needs a bank account. When you get your pay, it will be directed directly into your account. Everyone who is at least 16 years old can open up a bank account. However, it varies from one bank to another and on the bank account you want to get.
Even non-residents can open bank accounts in Canadian banks. This account is the funds that you leave with the bank for safekeeping, managing, and spending. You can always withdraw your money from this account and get different benefits depending on the account.
This type of account is classified as interest-bearing, meaning that, by committing your money to it, you will be earning through a modest interest rate. Even though the earnings are usually modest, the reliability and safety these types of accounts offer are undeniable.
You should be aware that savings accounts have certain limitations when it comes to withdrawing cash from them. Each bank is different, and you should discuss the limits with your banker.
The most common uses for savings accounts include saving for a car, a vacation, creating emergency funds, or just making your excess cash make more money for you.
See Available Canada Savings Account Offers
These types of accounts are considered one of the most liquid and flexible account types around. Also known as transactional accounts, they can be accessed through many different means. Let’s name a few:
- Electronic transfers
- Automated teller machines (ATMs)
- Electronic debit
- Credit cards
It’s common for Canadian banks to offer chequing Packages – all in one banking services like Scotiabank Preferred Package.
As you can see, this account type can be used with just about anything, and this makes it perfect for people that may need this kind of flexibility. Another advantage is its liquidity, meaning that you can make withdrawals and deposit pretty much without any restrictions.
See Available Canada Chequing Account Offers
Business Banking Accounts
Also known as commercial bank accounts, they are intended for use in managing finances for businesses and corporations. These accounts are usually the equivalent of checking accounts or some other liquid account option meaning that companies are free to withdraw from the account at any point.
When opening this kind of account, businesses are usually offered additional services like cash and investment management, credit products, etc.
Since they are servicing businesses and corporations, these accounts usually have service charges that are a bit more expensive than those for regular accounts. In some cases, banks will assign special relationship managers to help businesses get the most out of their accounts.
Students Banking Account
It might seem that students don’t need a bank account to function; they don’t have income after all. This, however, isn’t entirely true. Many college students get student loans, financial aid, scholarships, etc. Recognizing this, many banks started offering bank accounts focused on students.
Student accounts come with many benefits to help students keep their accounts without having a steady money stream. The maintenance fees might be waived, as well as ATM withdrawal charges; the minimum balance might be ignored as well, and finally, they might get some kind of program to help them learn finance management.
RELATED: Scotiabank Student Account
Senior Banking Accounts
Like student bank accounts, these specialized bank accounts are designed to cater to senior citizens. Now, some banks will have a whole category of accounts intended for senior citizens, while others will just start including perks for people who are 65+ years old once their account holders reach that age.
There are a lot of different accounts with a lot of perks depending on the bank. We recommend that you be patient when choosing, as there are many options here, and what you pick should be based on your needs and not the lists of potentially useless perks.