Banking Overview for Americans
Canadian banking is dominated by the "Big Five" banks, which are among the most stable in the world. Unlike many countries, opening a Canadian bank account as a US citizen is relatively straightforward.
Unlike many countries that avoid US clients due to FATCA compliance burdens, Canadian banks are accustomed to US persons. The Big Five all have US operations and robust FATCA compliance systems. You should not face rejection for being American.
The Big Five Banks
| Bank | Assets (CAD) | US Presence | Notable For |
|---|---|---|---|
| Royal Bank (RBC) | $1.9 trillion | RBC Bank (US) | Largest bank, strong wealth management |
| TD Bank | $1.8 trillion | TD Bank (US East Coast) | Strong US presence, cross-border solutions |
| Bank of Nova Scotia (Scotiabank) | $1.4 trillion | Limited | Strong in Latin America |
| BMO | $1.3 trillion | BMO Harris (US Midwest) | Growing US footprint |
| CIBC | $950 billion | CIBC Bank USA | Strong in Ontario |
Opening a Bank Account
Opening an account is usually possible within your first few days in Canada, though some documents make the process smoother.
Required Documents
- Primary ID: Valid passport (US passport works)
- Secondary ID: US driver's license, credit card, or other government ID
- Proof of address: Lease agreement, utility bill, employer letter
- Work authorization: TN stamp, work permit, PR card
- SIN (Social Insurance Number): Can open account without, but needed for interest reporting
Before You Arrive
Some banks let you start the process before moving:
- RBC: Newcomer banking package, can apply from US
- TD: Cross-border banking, accounts can be linked
- Scotiabank: StartRight newcomer program
- BMO: NewStart program for newcomers
- CIBC: Smart Start welcome package
All major banks offer "newcomer" packages with fee waivers, no credit history requirements, and sometimes welcome bonuses. These typically last 12-24 months. Take advantage—you'll save $150-300 in fees the first year.
Getting Your SIN
- Apply at Service Canada office (in person) or online
- Need work permit/TN, passport, immigration document
- Free to obtain
- Issued same day in person, 2-3 weeks by mail
- Required for employment, needed for full banking services
Account Types
Chequing (Checking) Accounts
- Primary transaction account for daily use
- Unlimited transactions with premium accounts
- Debit card for purchases and ATM access
- Monthly fees: $0-$30 depending on plan
- Fee waiver often available with minimum balance ($3,000-$5,000)
Savings Accounts
- High-Interest Savings: 2-5% interest (varies by bank)
- Tax-Free Savings Account (TFSA): Tax-advantaged savings—BUT problematic for US persons (see taxes)
- RRSP: Retirement savings—complex for US persons
- Limited free transactions, fees for excess
The TFSA is NOT recognized as tax-free by the IRS. Income earned in a TFSA is taxable on your US return, and the TFSA may be treated as a foreign trust requiring burdensome Form 3520 reporting. Most cross-border advisors recommend US citizens NOT open TFSAs.
Typical Monthly Fees
| Account Type | Monthly Fee | Waiver Option |
|---|---|---|
| Basic chequing | $4-5 | Usually no waiver |
| Standard chequing | $11-17 | $3,000-4,000 minimum balance |
| Premium chequing | $25-30 | $5,000-6,000 minimum balance |
| Newcomer (first year) | $0 | Automatic waiver |
Cross-Border Banking
If you'll maintain financial ties to both countries, cross-border banking solutions can simplify your life.
TD Cross-Border Banking
- TD Bank (US) and TD Canada accounts can be linked
- Free transfers between linked accounts
- Same online banking platform for both
- Hold USD in Canada, CAD in US
- Good option if you're near TD US locations (East Coast)
RBC Cross-Border
- RBC Bank (US) available in some states
- Cross-Border Advice services
- USD accounts in Canada
- Wealth management for cross-border clients
BMO Cross-Border
- BMO Harris in US (mainly Midwest)
- Linked accounts available
- Cross-border mortgage specialists
All Big Five banks offer USD-denominated accounts in Canada. This is useful for receiving US income, holding USD investments, or paying US obligations without constant currency conversion.
International Transfers
Moving money between US and Canadian accounts is a regular need. Options vary in cost and speed.
Transfer Options
| Method | Cost | Speed | Best For |
|---|---|---|---|
| Wire Transfer (bank) | $25-45 + spread | 1-3 days | Large, urgent transfers |
| Cross-border linked accounts | Free + spread | 1-2 days | Regular transfers if you have both banks |
| Wise (TransferWise) | ~0.5-1% | 1-2 days | Best rates for most people |
| OFX / XE | ~0.5-1% | 1-2 days | Larger transfers |
| PayPal | 2.5-4% | Instant | Small, urgent transfers |
For most regular transfers, Wise (formerly TransferWise) offers the best combination of low fees, transparent mid-market exchange rates, and convenience. You can hold both USD and CAD in a Wise account and convert when rates are favorable.
Credit Cards
Building Canadian credit history starts from scratch—your US credit score doesn't transfer.
Credit Cards for Newcomers
- Secured cards: Deposit required, easiest approval
- Newcomer cards: No Canadian credit history required
- American Express Global Transfer: Transfer your US Amex history to get Canadian Amex
Building Canadian Credit
- Get a credit card and use it responsibly
- Pay full balance monthly
- Keep utilization low (under 30%)
- Set up automatic payments to avoid late payments
- Get a cell phone plan in your name
- Don't apply for too many cards at once
If you have a US American Express card in good standing, you may be able to transfer that relationship to get a Canadian Amex without building credit from scratch. Call Amex to inquire—not all cards qualify, but it's worth asking.
Popular No-Fee Cards
| Card | Annual Fee | Rewards | Notes |
|---|---|---|---|
| Tangerine Money-Back | $0 | 2% in 3 categories | Popular no-fee option |
| BMO CashBack | $0 | 0.5% cashback | Easy for newcomers |
| PC Financial Mastercard | $0 | PC Optimum points | Good for groceries |
| Rogers Mastercard | $0 | 1.5% cashback | Good for foreign purchases |
Investment Accounts
Investment accounts in Canada have significant US tax implications. Careful planning is essential.
Canadian Investment Accounts
| Account Type | Canadian Tax | US Tax Issue |
|---|---|---|
| Non-registered (taxable) | Taxable | Taxable, potential PFIC issues with Canadian mutual funds |
| TFSA | Tax-free | NOT tax-free, possible foreign trust reporting |
| RRSP | Tax-deferred | Need treaty election, contributions may not be deductible |
| RESP | Tax-advantaged | Income taxable, possible trust issues |
Canadian mutual funds and ETFs (except US-listed ETFs held in a Canadian account) may be classified as Passive Foreign Investment Companies (PFICs) for US tax purposes. PFIC taxation is punitive. Stick to US-listed ETFs or individual stocks. Consult a cross-border tax advisor before investing.
Best Practices for US Citizens
- Avoid TFSAs: The tax headache isn't worth it
- RRSPs can work: With proper treaty election, contributions can be tax-advantaged
- Use US-listed ETFs: VTI, VXUS, BND in Canadian brokerage account
- Consider keeping US accounts: Maintain existing US investment accounts
- Get professional help: Cross-border investment planning is complex
US Reporting Requirements
Canadian accounts trigger US reporting requirements. Stay compliant to avoid severe penalties.
FBAR (FinCEN 114)
- Threshold: $10,000 aggregate in foreign accounts
- What counts: Bank accounts, investment accounts, RRSPs, TFSAs, RESPs, life insurance cash value
- Deadline: April 15 (auto-extended to October 15)
- How to file: Online at FinCEN BSA E-Filing
- Penalties: Up to $10,000/year non-willful; up to $100,000 or 50% of balance willful
FATCA (Form 8938)
- Threshold (living abroad): $200,000 end of year or $300,000 at any time
- Filed with: Tax return
- Penalties: $10,000+ for failure to file
Keep meticulous records of all Canadian accounts—banks, investments, RRSPs, and any other financial accounts. The $10,000 FBAR threshold is aggregate, meaning if your combined balances ever exceed $10,000 during the year, you must file. When in doubt, file.
Digital Banking Options
Canada has a growing fintech sector with digital-first banks offering competitive rates and features.
Digital Banks
- Tangerine: Owned by Scotiabank, no-fee banking, good savings rates
- EQ Bank: High-interest savings (competitive rates), no branches
- Simplii Financial: Owned by CIBC, no-fee chequing and savings
- Motive Financial: Owned by CWB, high-interest savings
- Wealthsimple Cash: Hybrid spending/savings, investing integration
Digital Banks vs. Big Five
| Feature | Digital Banks | Big Five |
|---|---|---|
| Monthly fees | Usually $0 | $5-30 |
| Interest rates | Higher (2-5%) | Lower (0.5-2%) |
| Branch access | None | Extensive |
| ATM access | Partner networks | Own + Interac |
| Complex services | Limited | Full service |
| Cross-border | Limited | Strong options |
Many people use a Big Five bank for primary chequing and complex needs (mortgage, cross-border), plus a digital bank like EQ or Tangerine for high-interest savings. This gets you branch access when needed plus better interest rates on savings.