Why use banks and other financial institutions?

Safety

The Government of Canada watches banks and financial institutions carefully to make sure that your money is safe. All financial institutions that accept deposits—except caisses populaires and credit unions—must be members of the Canada Deposit Insurance Corporation (CDIC). The CDIC provides insurance for eligible deposits to a maximum of $100,000.

Advice

Banks and other financial institutions will help you choose the kind of account, loan or mortgage that is best for you. Ask many questions and do not sign any agreement until you are sure that you understand what it means.

Services

All financial institutions offer a range of financial services. A bank may offer you an account that includes travelers’ cheques, international credit cards and foreign banking services. Do your research and ask questions before choosing an account as fees and services and transactions covered will vary.

Borrowing

You may want to borrow money to pay for college or university fees so you can improve your education, open or expand a business, or buy a car or house.

When you borrow money, make sure you understand how and when you have to pay it back. Ask these questions before you make your decision:

  • Can I make extra payments?
  • What happens if I miss a payment?
  • How much interest will I be charged?
  • Is there a penalty for paying off the loan early?
  • What is the interest rate?

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