How to open a bank account as an international student

Moving to a new country for your studies is an exciting adventure, and one of the first steps to settling in is opening a bank account. As an international student, managing your finances efficiently is crucial, and having a local bank account makes it easier to handle everyday transactions, receive funds, and save money. Whether you want to get a credit card as an international student or apply for international student bank loans, having a Canadian account can make a world of difference.

In this guide, we'll walk you through opening a bank account in your new home country, ensuring you feel confident and well-prepared to take this important step. Whether you're new to banking or need some guidance, we've got you covered with friendly advice and clear instructions to make the process smooth and hassle-free.

Can you open a bank account in Canada as an international student?

Yes, you can open a bank account in Canada as an international student. Canadian banks offer various types of accounts tailored to meet the needs of students from abroad. These accounts often come with benefits such as low or no monthly fees, unlimited transactions, and additional perks like discounts or free banking services.

Preparing to open a Canadian bank account as an international student

Gather required documents

Before you open a bank account, you need to gather the required documents as part of your application:

• Passport: Your passport serves as your primary identification.

• Study permit: This confirms your status as an international student in Canada.

• Proof of enrollment: A letter from your Canadian educational institution verifying your enrollment.

• Canadian address: Documentation such as a rental agreement or a utility bill to prove your Canadian address.

• Initial deposit: Some banks may require a small initial deposit to open your account.

Understand the benefits of a local bank account

Opening a student bank account in Canada has several benefits for international students that help them manage finances more effectively:

• Convenient access to funds: Easily withdraw money from ATMs and shop with a local debit card.

• Lower fees: Avoid high fees associated with using international bank accounts for everyday transactions.

• Direct deposits: Receive funds directly into your account, including scholarships, part-time job earnings, and money from home.

• Financial tracking: Keep track of your spending and savings through online banking services and mobile apps.

• Building credit history: Some accounts offer the option to apply for a credit card, which can help you build your credit history in Canada.

Choosing the right student bank accounts

Select a bank that caters to international students

When choosing a bank, look for one that offers specific services and benefits for international students:

• Special student packages: Many banks provide tailored packages for students, including lower fees and added perks.

• Multilingual support: Banks with multilingual support can make communication easier if English or French is not your first language.

• Accessible branches and ATMs: Choose a bank with branches and ATMs close to your campus or residence for convenient access to your money.

• Online and mobile banking: Ensure the bank offers an intuitive platform to create an account online and mobile banking options so you can manage your account from anywhere.

• International money transfers: Look for banks that offer low-cost or free international money transfers, making it easier to receive funds from home.

Consider a savings account for everyday spending

While a chequing account is ideal for daily transactions, a savings account can also be beneficial for managing your money effectively:

• Higher interest rates: Savings accounts typically offer higher rates than chequing accounts, allowing your money to grow over time.

• Budgeting: By keeping a separate savings account, you can better manage your budget and set aside funds for specific goals, like travel or tuition.

• Automatic transfers: Many banks offer the option to set up automatic transfers from your chequing to your savings account, helping you save without thinking about it.

• Emergency fund: A savings account can serve as an emergency fund, providing a cushion for unexpected expenses.

Applying for a bank account as an international student

Apply online or in person

When opening a bank account as an international student, you can apply online or in person.

• Online application: Applying online is a convenient option to complete the process from the comfort of your home or dorm. To get started, ensure you have digital copies of your required documents ready for upload. You will need to fill out an online form, submit your documents, and then wait for confirmation from the bank.

• In-person application: If you prefer direct assistance, you can visit a local branch to apply in person. Bring your original documents for immediate verification. This method offers the advantage of receiving help from bank representatives and getting immediate answers to any questions about the account or banking services.

What to expect during the verification process

The verification process begins once you've submitted your application:

• Document review: The bank will verify your passport to confirm your identity, check your study permit to ensure you are an international student, review your enrollment letter confirming your student status, and validate your Canadian address proof to ensure you have a local residence.

• Credit check: While less common for student accounts, some banks may perform a credit check as part of the verification process.

• Initial deposit: If required, you make an initial deposit to activate your account. This can typically be done through a wire transfer or cash deposit.

• Account activation: Once your documents are verified and the initial deposit is made, your account is activated. You will receive your debit card and other relevant materials via mail or in person.

• Setting up online banking: Setting up online banking and mobile app access allows you to manage your account easily and efficiently.

Managing your bank account

Understanding credit cards and loans for international students

As an international student, managing your finances can be complex, especially for credit cards and loans.

Many banks offer student credit cards with lower credit limits and fewer requirements, making them accessible even if you have no prior credit history in Canada. Using a credit card responsibly by making timely payments can help you build a credit history, which can benefit future financial endeavours such as renting an apartment or taking out a larger loan.

As an international student, you might have limited loan options than domestic students. However, some banks and financial institutions offer student loans tailored for international students. These loans often require a co-signer who is a Canadian citizen or permanent resident. It’s crucial to understand the terms, interest rates, and repayment schedules before committing to a loan.

Managing foreign currency and exchange rates

Handling foreign currency and exchange rates is another important aspect of managing your bank account as an international student:

• Currency exchange: Many banks offer currency exchange services. It’s wise to compare rates among different banks and financial institutions to get the best deal. Some banks also offer multi-currency accounts, which can be beneficial if you frequently deal with different currencies.

• Transfer services: If you need to transfer money between your home country and Canada, look for banks that offer low-cost or free international transfer services. Online platforms and apps like PayPal can also be useful, often offering better rates than traditional banks.

• Exchange rate fluctuations: Keep an eye on exchange rate fluctuations, as they can significantly impact the amount you receive or send. Timing your transfers when the rates are favourable can save you money. Some banks and financial services offer tools to monitor rates and set alerts when the rates reach a certain level.

• Foreign currency accounts: If you frequently receive funds in your home currency, consider opening a foreign currency account. This can help you manage your money more effectively without the immediate need to convert to Canadian dollars, avoiding exchange rate losses.

Additional tips and resources

Utilizing university support for international students

Many universities offer dedicated support services for international students, which can be invaluable when managing your finances.

• Financial counselling: Universities often provide financial counselling services to help you understand budgeting, banking, and other financial matters. Take advantage of these services to gain insights and personalized advice.

• Workshops and seminars: Attend workshops focused on financial literacy. These events can cover budgeting, saving, and understanding Canadian banking systems.

• Student associations: Join international student associations and groups. They can offer peer support, share experiences, and provide useful financial management tips.

Best practices for managing your bank account

• Regular monitoring: Check your account balance and transactions regularly to stay on top of your finances. Use online banking and mobile apps to monitor your account anytime.

• Set a budget: Create a monthly budget to track your income and expenses. This helps ensure you live within your means and avoid overspending.

• Automate payments: Set up automatic payments for recurring expenses like rent, utilities, and tuition fees.

• Use alerts: Set up account alerts to notify you of low balances, large transactions, or upcoming bills.

Have an emergency fund

An emergency fund is essential for unexpected expenses such as medical emergencies, travel, or urgent repairs. Here’s how to build and manage your emergency fund:

• Start small: Begin by setting aside a small amount each month. Aim to build an emergency fund covering 3-6 months of living expenses.

• Keep it accessible: Ensure your emergency fund is easily accessible, such as in a savings account, so you can quickly access it when needed.

• Replenish when used: If you need to dip into your emergency fund, make it a priority to replenish it as soon as possible.

Have a slush fund

A slush fund is a separate pool of money set aside for non-essential spending, such as dining out, entertainment, or hobbies. Here’s how to manage a slush fund:

• Allocate a budget: Decide a monthly budget for your slush fund based on your financial situation.

• Separate account: Keep your slush fund separate to avoid mixing it with your essential savings and expenses.

• Monitor and adjust: Track your spending from the slush fund and adjust your budget as needed to ensure you’re not overspending.

Be prepared for your financial journey as an international student with KOHO

The KOHO virtual credit card makes it easy for international students to shop in-store and online while earning cash back on every dollar spent. With the KOHO app, you can instantly unlock your virtual credit card and enjoy top-tier security protection against fraud and cyber threats. Plus, you can request a free credit score report to monitor your credit-building progress.

KOHO also offers overdraft protection through the Cover feature, providing up to $250 in zero-interest cash advances for unexpected expenses, so you can keep your budget in check. Building credit with KOHO is straightforward, helping you qualify for various credit products tailored to your financial needs as a student and after graduating.

In addition to virtual credit cards, KOHO provides different plans for spending and saving to help you achieve your financial goals. Our high-interest savings account offers a higher interest rate than traditional accounts, maximizing your savings to reach your goals quickly.