British Columbia Newcomers' Guide
to Resources and Services

Money and Banking

In this chapter:

• Banks, credit unions, and trust companies
• Types of accounts
• Cash, cheques, credit cards, and debit cards
• Paying taxes
• Investing money

Banks, credit unions, and trust companies

You can open an account at a bank, a credit union, or a trust company. Before you choose a place to bank, find out what kind of accounts it has. Ask questions about interest and charges.

• Most banks pay you interest on the money in your account.
• A bank may charge you for the services it gives.

Types of accounts

• Chequing accounts – Some chequing accounts charge you for each cheque you write. Some have monthly charges. Some chequing accounts don’t pay interest.
• Savings accounts – All savings accounts pay interest, but the amount of interest is not always the same. You cannot write cheques on some savings accounts.
• Chequing-savings accounts – These accounts pay interest. You can also write cheques. The interest and charges are not the same at all banks.

Paying by cash, cheque, credit card, or debit card

Cash is money–coins and bills.

Cheques are often used instead of cash. When you write a cheque, you are telling your bank to pay the money. To pay by cheque, you must show the cashier some identification (ID). Most cashiers ask to see a driver’s licence and a credit card or a passport. If you don’t have a driver’s licence, ask for an ID card at a Driver Services Centre. See the chapter on "Cars and Driving."

Credit cards let you buy things now and pay for them later. You can get credit cards from department stores or gas companies. You can also get bank credit cards such as Visa and Mastercard. If you don’t pay the full amount of the credit card bill each month, then you have to pay interest. It may be very expensive.

Debit cards can be used instead of a cheque or credit card to buy things in some stores. You get these cards from your bank or credit union. When you buy things with these cards, the money comes out of your account immediately. You pay a fee each time you use a debit card.

Bank machines

Banks, credit unions, and some trust companies have bank machines. There are also bank machines in stores and other convenient places. You can take money out of your accounts or put money into them. You can also pay bills and transfer money to other accounts. You can use bank machines any time–day or night.

Some banks and credit unions charge a service fee each time you se one of these machines.

To use the machines, you need a card from your bank or credit union. You will get a secret number (Personal Identification Number, or PIN) so that only you can use your card. Be careful. Do not give this number to anyone else.

Banking by phone and Internet

You may be able to do some of your banking from home with a touchtone phone. For example, you can transfer money between accounts and pay your bills. Ask your bank about this service.

You may also be able to do your banking from home over the Internet. You need a computer, a telephone or cable line to connect you to the Internet, and software (computer programs) to access the Internet. Ask your bank about this service.

Sending money to other countries

Canadian banks and foreign exchange companies can send money to banks in most countries. You can also mail a money order (draft). You can get this at a bank, a foreign exchange company, or more cheaply at the post office. Check first that this cheque can be cashed in the other country.

Mortgages and loans

A mortgage is money you borrow to buy a house.

A loan is money you borrow for other reasons. For example, some people get a loan to buy a car.

You must pay back part of the money each month and also pay interest. To get a loan, you must be earning enough money to easily repay the borrowed money.

Owing money

Some people borrow money or buy things and plan to pay later. Then they find it is not possible to make the payments. What if they can’t pay? They should phone or write the people they owe money to. Sometimes it is possible to make smaller payments. What if this doesn’t help? There is a provincial government office that will give you free advice and counselling on what to do. Look in the Blue Pages of the telephone book in the Government of British Columbia section. Look under "Debt Counselling" or "Debtor Assistance."

Paying taxes

Governments get most of their money from taxes. Taxes pay for services such as roads, parks, community centres, medical care, welfare, schools, and universities.

PST and GST – Whenever you buy something in British Columbia, you must pay 7.5 per cent Provincial Sales Tax (PST) and 7 per cent Federal Goods and Services Tax (GST). Everything except rent, food, and a few other things are taxed. There is no PST on clothes for children under 15 years old.

If you have a low income, you can get a GST credit. This means the government will send back money to you four times a year. To apply for this money, fill in the special page of the income tax form.

Income tax – Working people have income tax taken off their pay cheques each month. But everyone still has to fill in a tax form each year and send it to the government by April 30. The government may send you back some money because too much tax was taken off your pay cheque. Maybe you will have to pay more because not enough money was taken off.

If you had no income, you should still fill in the form. You may get some money from the government.

Self-employed people and people who own businesses have to pay income tax. Non-working people must also pay taxes on income from investments. For income tax information, phone Revenue Canada. To find the office near you, look in the Blue Pages of the telephone book. Find the Government of Canada section. Look under "Canada Customs and Revenue Agency – Tax Services," or call
1-800-959-8281.

During March and April, many community organizations give free help with filling in income tax forms. You can also pay someone to help you. Look in the Yellow Pages of the phone book under "Tax."

Property Taxes – Everyone who owns a house, land, or buildings must pay property tax. Your city or town sends you a bill once or twice a year. You can also pay your property tax as part of your mortgage.

Investing money

Term deposits and GICs – Term deposits or Guaranteed Investment Certificates (GICs) pay more interest than savings accounts. Up to $60,000 of your money is insured in a bank or trust company, and up to $100,000 in a credit union. When you put money in term deposits and GICs, you must leave it there for a set time (between one month and five years). You may not be able to take it out early. Talk to someone at your bank, credit union, or trust company about these investments.

Canada Savings Bonds and Treasury Bills – When you buy Canada Savings Bonds and Treasury Bills, you are lending money to the government. The government pays you interest on the bonds. For information, check with your bank, credit union, or trust company.

RRSPs – A Registered Retirement Savings Plan (RRSP) lets you invest money for your retirement. Putting money in a RRSP can lower the taxes you pay every year. If you are working or earning money from a business, you can put money in a RRSP. If you take out some or all of the money before you retire, you will have to pay tax on it. The tax is lower if your income is low.

Larger investments – You may want to buy shares in a corporation, join with others in a mutual investment fund, or invest in other ways. Ask your bank, credit union, or trust company for advice. You can also talk to an investment counsellor or financial planner. Look in the Yellow Pages of the telephone book under "Financial Planning." If you are an entrepreneur who must invest in a business as condition of your immigration visa, contact the Business Immigration Office in Vancouver. The telephone number is 604 844-1810, and they are located at Suite 730, 999 Canada Place, Vancouver B.C. V6C 3E1.
Website: http://www.gov.bc.ca/cse

Go to next page: Chapter 6, Finding a Place to Live

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