Is it time to break up with your bank? If you want lower fees, better interest rates or just a higher standard of customer service than you get from your current bank, switching banks in Canada is easier than you might think.
In this guide, we’ll show you how to switch banks in six simple steps—and what to consider before deciding if the grass really is greener on the other side.
Switching banks might seem intimidating, but it doesn’t have to be. If you’re wondering how to switch banks in Canada, this step-by-step guide will walk you through everything you need to know to find the right bank and transition effortlessly.
Knowing why you want to switch is the first step in finding a bank that meets your needs. Put together a checklist to help you narrow down the features and perks to look for in new accounts. Common reasons for switching accounts include:
Now that you know what you’re looking for, shop around to find banks that fit the bill. From Big Banks and credit unions to digital banks and fintechs, there are plenty of options to choose from.
Consider features like no-fee chequing accounts, high-interest savings accounts, cashback perks, customer service and digital tools. For example, Simplii Financial and EQ Bank can be great options if you’re prioritizing high interest accounts and no monthly fees.If you prefer a one-stop shop, look for banks like Scotiabank or RBC that offer a full range of products, including chequing, savings and other accounts. Lastly, consider a CDIC-insured institution to protect your deposits.
When you’ve found your perfect match, apply online to open an account. You’ll need to provide your name, address, contact details, proof of ID and (if you’re opening a savings account) your Social Insurance Number (SIN).
You can also sign up for online and mobile banking, download your new bank’s smartphone app and deposit money into your account.
Pro tip:
Don’t close your old account right away. It could take a week or more for your new account’s debit card to arrive in the mail and there may be other hiccups with your new account. By leaving your old bank account open for a couple of weeks or months, you can use it as a backup, just in case.
Of course, be aware that if your balance drops below your old bank’s minimum requirement, you may be charged a monthly fee.
Make a list of all automatic payments to and from your current account, including your salary, streaming subscriptions, rent, insurance premiums and other regular payments. Go back through your past bank statements to make sure you don’t miss anything.
You can then move all those payments over to your new account. This may involve contacting a company directly, for example, informing your employer of your new bank account details or logging into your subscription accounts to update your payment information.
Now that your new bank account is up and running, start using it. If it’s a savings account, you might want to set up a recurring transfer to help grow your balance. If it’s a chequing account, use it to receive your income, pay bills and make everyday purchases.
Once again, it’s important not to close your old bank account yet. There may be a long-standing pre-authorized debit payment you’ve forgotten to transfer to your new account.
Also make sure that your monthly expenses and subscriptions are all being paid from your new account, so consider keeping your old one open for at least one month to check statements for anything you might have missed.
Before closing your previous account, ensure all pending transactions have cleared and there are no remaining cheques outstanding.
Some banks may charge a fee for closing an account, so it’s worth reviewing your bank’s policies beforehand. Once you’re confident that everything is in order, you can officially close the account.
To make comparing even easier we came up with the Finder Score. Welcome offers, account fees and features across 60+ chequing accounts and 25+ lenders are all weighted and scaled to produce a score out of 10. The higher the score the better the account - simple.
Before you switch banks in Canada, there are a few risks and drawbacks to be aware of:
As an added incentive to switch, many Canadian banks offer cash bonuses or perks for new customers. If you’re searching for banks offering cash to switch, here are some examples currently on the market:
These promotions often have specific conditions like maintaining a minimum balance or using your account actively for several months. Be sure to check the terms and timelines before making your decision.
Maybe. Maybe not. Unfortunately, switching banks sometimes comes with a cost.
Check the terms and conditions of your current account to find out if an account closing fee applies. Be aware that some banks charge fees if you ask your bank to transfer the remaining balance in your account to another bank rather than transferring the funds yourself.
Some banks also charge account closing fees to discourage people from regularly switching banks. For example, you may be charged a $15 to $20 fee if you close a bank account within 90 days of opening it.
Finally, be mindful that some bank accounts come with additional fees and costs. For instance, if you transfer funds out of a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP), you may be hit with withdrawal fees ranging from $50 to $150 per transaction.
To avoid or reduce transaction fees, be sure to read the account’s fine print or talk to an account representative before taking action.
If you switch banks, you’ll need to provide documentation when opening an account with your new financial institution. You’ll need to provide proof of ID along with your name, date of birth, address and contact details.
Two forms of ID are required to open an account. Acceptable documents include:
If you’re opening an interest-earning savings account, you’ll need to provide your SIN. However, you can open a chequing account without your SIN.
Find out more in our guide on the requirements for opening a bank account.
No. Simply switching from one bank to another will not affect your credit score. You won’t need to complete a credit check to open a new bank account unless you’re also applying for a new credit card as part of a promotional offer to encourage you to switch banks.
However, your credit score could take a hit if you owe money to your old account and neglect to pay it.
For example, if your account is in overdraft when you decide to change banks, your old bank could sell your debt to a collection agency. This can hurt your credit score, and the default is listed on your credit report.
Switching banks in Canada is a straightforward process if you follow the right steps. It might seem intimidating at first, but with clear guidance and a bit of effort, you can transition seamlessly. Understanding the key actions offered above—like updating automatic payments and keeping your old account open temporarily—can help you avoid common pitfalls.
It can take only a few minutes to open a new bank account, but it can take several more minutes, a few hours or even a few days to complete the rest of the steps for switching banks—like setting up bill payees and signing up for online banking—depending on how much banking you typically do.
The exact timeline to switch banks largely depends on how quickly you update your direct deposits and pre-authorized payments.
As mentioned in our step-by-step guide above, ensuring all transactions are moved to your new account can help speed up the process and minimize any disruptions, but you also don’t want to rush the process to ensure a thorough transition.
Switching banks in Canada can be simple if you follow the right steps. By following a straightforward step-by-step guide, you can avoid common challenges like overlapping account fees and missed payments.
Whether you’re after lower fees, higher interest rates or better quality customer service, taking the time to research and compare your options can make all the difference. With plenty of banks offering promotions and perks for new customers, now might be the perfect time to make the switch and start enjoying better banking. BMO Performance Chequing Account
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