Canada’s official currency is the Canadian dollar (CAD). There are 100 cents (¢) in a dollar. Coins, which are minted by the Royal Canadian Mint, are different in size, shape and colour. Coins also have nicknames which are used by Canadians in everyday life.
- 1¢ – penny, with an image of maple leaves on the back (the penny was removed from circulation in 2012);
- 5¢ – nickel, with the image of a beaver on the back;
- 10¢ – dime, with the image of the famous sailing schooner Bluenose on the back;
- 25¢ – quarter, with the image of a caribou or elk on the back;
- $1 – dollar, also known as loonie, with the image of a common loon on the back;
- $2 – two dollars or a toonie, with the image of a polar bear on the back.
All paper money is printed by the Bank of Canada in the same size, most bills in circulation are made of polymer, but the older ones are made of paper.
The most common paper bills are:
- $5 – blue, with a portrait of Sir Wilfrid Laurier, prime minister 1896–1911;
- $10 – purple, with a portrait of Sir John A. Macdonald, prime minister 1867–74 and 1878–91;
- $20 – green, with a portrait of Her Majesty Queen Elizabeth II, Queen of Canada;
- $50 – red, with a portrait of W. L. Mackenzie King, prime minister from 1921–30 and 1935–48;
- $100 – brown, with a portrait of Sir Robert L. Borden, prime minister 1911–20.
Financial planning is an organized assessment of one’s financial situation in order to plan out actions and approaches needed to reach financial goals. This can encompass something as simple as figuring out how to make your paycheck last until the next one and budgeting for unexpected expenses.
Accounting and Taxes
In Canada, every individual has to complete and file their taxes to Canada Revenue Agency before April 30th each year.
You might need an accountant to help you with taxes filing because the regulations and rules are pretty complex especially for newcomers.
For mortgages, please visit the Housing section.
In Canada, you have the right to a personal bank account, even if:
- You do not have a job;
- You do not have money to put in the account right away;
- You have poor credit rating; or
- You have been bankrupt.
To open a bank account, you must go to the bank in person and present acceptable identification pieces. The documents you present must be original (not photocopies) and in good condition. Identification that has expired is not valid. There are different combinations of identification you can use to open a bank account.
Requirements to open an personal account:
- At least two forms of government-issued photo identification, such as a valid driver’s license or passport.
- Social security number or individual taxpayer identification number.
- Utility bill with current address information.
- Full contact information of the applicant, such as name, address, and phone number.
- Student checking accounts may require proof of enrollment in an eligible school such as a student ID or acceptance letter.
- If the bank has a minimum deposit requirement, you may need to provide the deposit at the time of applying
Remember: Unless the personal bank account you are opening pays interest, you do not need to provide your SIN to the bank.
For newcomers, you do not have to have a permanent address to open a bank account. However, if you do provide an address, the bank may ask you for proof that you live there. An example of such proof would be a recent utility bill that includes both your name and address.
Main types of bank accounts
Chequing accounts allow you to write cheques and usually include the use of a debit card. They often have lower transaction fees than a savings account and may or may not have a fixed monthly fee. You will need a chequing account if your employer uses payroll deposit. Payroll deposit allows your employer to deposit money directly into your chequing account.
For day-to-day banking needs, chequing accounts are the most common among Canadians.
Savings accounts are helpful if you want to save money because they provide higher interest than chequing accounts. You may be allowed to make only certain types of transactions or a certain number of transactions. Additional transactions may be expensive. Tax-free Savings Account (TFSA) is for 18 and older individuals to set money aside tax-free throughout lifetime.
Your bank may apply a “hold” (a waiting period) on money you deposit by cheque. If you need to access your money sooner, you can speak with your bank to see if the waiting period can be shortened.
However, If the cheque is from a bank or other financial institution located outside of Canada, the cheque can take much longer to clear. Foreign cheques are often held for 30 days.
Registered Retirement Savings Plan (RRSP)
A registered retirement savings plan (RRSP) is an arrangement between an individual and an issuer (an insurance company, a trust company or a bank) under which retirement income commences at maturity. Contributions are made by individuals and are deductible under the Income Tax Act. Earnings in the plan remain tax-free and payments out of an RRSP are taxable on receipt.
Registered Retirement Income Fund (RRIF)
A registered retirement income fund (RRIF) is an arrangement between an individual and a carrier (an insurance company, a trust company or a bank) under which payments are made to the individual of a minimum amount each year. The minimum amount must commence to be paid to the individual in the year following the year the RRIF is entered into. Earnings in a RRIF are tax-free and amounts paid out of a RRIF are taxable on receipt.
Registered Education Savings Plan (RESP)
A registered education savings plan (RESP) is a contract between an individual (the subscriber) and a person or organization (the promoter).
Under the contract, the subscriber names one or more beneficiaries (the future student(s)) and agrees to make contributions for them, and the promoter agrees to pay educational assistance payments (EAPs) to the beneficiaries.
There are two different types of RESP available: family plans and specified plans.