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Banks Love Students
If you are a university or college student in Canada, every major bank desperately wants you to open an account with them.
Why? Because human beings are inherently lazy. Statistical models show that if a bank captures you when you are 18, you are highly likely to stay with them for the next 40 years, eventually opening lucrative mortgages, car loans, and mutual funds with them.
Because they are fighting for your lifetime loyalty, students have incredible negotiating power. If you are paying a single cent in banking fees while in school, you are doing it wrong.
1. The Free Student Chequing Account
Every single “Big 5” bank (TD, RBC, BMO, Scotiabank, CIBC) offers a completely free, unlimited transaction chequing account for full-time post-secondary students.
What to look for:
- Zero Monthly Fees: Mandatory.
- Unlimited e-Transfers: Mandatory for splitting pizza and rent with roommates.
- Sign-up Bonuses: Banks frequently run promotions in August/September where they will literally give you $100 to $300 in cash, or free Amazon Prime memberships, just for opening an account. Shop around.
The Trap: The bank requires proof of enrollment every year. The absolute second you graduate, they will automatically upgrade you to a $16/month adult account. Set a calendar reminder to call them and downgrade immediately upon graduation.
2. The Student Credit Card
Building a credit score early is crucial for your post-graduation life (renting apartments, getting car loans). Students have zero credit history, so banks offer specialized “Student Credit Cards” with highly lenient approval requirements.
Top Picks for Students:
- BMO CashBack Mastercard for Students: No annual fee. Gives 3% cashback on groceries, 1% on recurring bills. Excellent for off-campus living.
- Tangerine Money-Back Credit Card: No annual fee. Let’s you pick your own 2% cashback categories (like Restaurants and Transit).
The Trap: Credit card debt is financial poison. The interest rate is 20%+. If you buy a $1,000 laptop on your credit card and only pay the minimum balance, it will take you years to pay off. Treat your credit card exactly like a debit card. If you don’t have the cash in your chequing account, do not swipe the credit card.
3. The Student Line of Credit (SLOC)
If OSAP or provincial student loans are not enough to cover your tuition and living expenses, banks offer Student Lines of Credit.
A SLOC gives you access to a pool of money (e.g., $10,000 a year). You only pay interest on the exact amount you withdraw. Furthermore, while you are in school, you are only required to pay the interest each month, not the principal.
Professional Student Lines of Credit: If you are entering Medical School, Dental School, or Law School, banks will practically throw money at you. They offer “Professional SLOCs” with massive limits (up to $350,000 for Med students) at extremely low interest rates (often Prime - 0.25%).
The Trap: Because you only have to pay interest during school, it feels like “free money.” It is not. The day you graduate and your grace period ends, the bank will demand the principal back. Do not use your student line of credit to finance a spring break trip to Cancun. Only use it for tuition, rent, and groceries.
Conclusion
As a student, your financial goal should simply be to survive with minimal debt while building a foundational credit score. Take the free bank accounts, collect the sign-up bonuses, get a no-fee cashback credit card for groceries, and avoid the 20% interest trap at all costs.