4 Banking Culture Shocks I Experienced in Canada

1. e-Transfer

e-Transfer is very much a Canadian banking custom, as it is the most common method of making transfers between individuals using email or phone number in Canada.

e-Transfer is essentially the Canadian Venmo or Cash App like in the United States, but because its function is built directly into online banking systems and apps, you would only need to access your Canadian bank account through the bank’s website or its apps to use this feature and there is no need to visit a third-party website or install a separate application.

e-Transfers may be free depending on the bank you are with, but certain bank accounts may impose a fee to use it. There are also daily transfer limits for individuals, which typically hovers around CAD 2,000–3,000 per day. e-Transfers can be made to anyone with a Canadian bank account, even if they are with a different bank.

In some other countries, e-transfers are not common and third-party alternatives like Cash App or Venmo are used instead. Another commonly-encountered banking custom include making online transfers using bank account numbers instead of an email and phone number.

2. Chequing Account vs. Savings Account

One of the first few things I noticed after moving to Canada is that Canadian banks make the distinction between what is called a “chequing account” and a “savings account”. Put simply, a chequing account is an account where you can receive incoming and make outgoing transactions, whereas a savings account is designed for receiving incoming transactions, but it is not geared towards making outgoing transactions such as paying bills. Also, money in a chequing account typically earns no interest, whereas money in a savings account does.

In some other countries, the type of accounts offered by banks combine the benefits of both a chequing and a savings account—meaning a single bank account can be used to receive income and make outgoing transactions, and additionally, the money contained in the same account can accrue monthly interest.

3. Banking Fees

In countries where I have previously banked in, some of the common banking fees I am familiar with are:

• Monthly banking fees: Fees that are imposed every month on the account, and can sometimes be waived if a minimum account balance is met
  
  
• Overseas remittance fees: Fees that are imposed for overseas money transfers
  
  
• Wire transfer fees: Fees that are imposed for wire transfers
  
  
• Interbank transfer fees: Fees that are imposed when an outgoing bank transfer goes to a different banking institution

Many Canadian banks impose monthly banking fees, overseas remittance fees, as well as wire transfer fees, but interbank transfer fees are less common due to the use of e-Transfers, where the “brand” of the banking institutions of the sender and receiver is pretty much irrelevant as long as they are Canadian.

One fee that I find quite unusual is transaction fees that are imposed if you were to exceed the monthly limit on the number of outgoing transactions in your account. For instance, some types of Canadian bank accounts will only allow up to 15 free outgoing transactions per month, and if you were to make 20, you will be charged extra fees for 5 of those transactions. There are accounts with unlimited transactions, but the trade-off is that these accounts usually come with a higher monthly fee.

4. Deposit Hold Period

When depositing a cheque/bank draft, depositing money through ATMs, and in some other deposit transactions, Canadian banks would often “hold” most of the deposited funds for several days before they are all directly accessible in your account.

What this means is that if you were to deposit a bank draft of $5,000 for example, the bank might only release $500 for immediate access in your account, but the remaining $4,500 would only be cleared in the next several business days. Sometimes, depending on the transaction and the bank, all of the funds may be held until they clear. Banks hold these funds is to verify whether the sources check out and the money indeed is available from the sender.

I find that the hold period for Canadian banks are somewhat longer than what I was used to. In some other countries, ATM cash deposits and deposits from a bank draft (or cashier’s cheque/order) are usually made available immediately.

Over and Out

All in all, Canadian banking standards are held in high regard around the world. The purpose of this post is not to compare Canadian banking customs against some others around the world and claim which is “better”, but to point out the differences that might be unique to Canada and what you can expect, especially as a newcomer.

Of course, the point of comparison I have is my own banking experiences that I have in other countries, and you may well find Canadian banking customs to be much more similar or a lot more different compared to what you are used to.

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