Student FAQ
About Accounts
- Can anyone open a bank account?
- What is the minimum amount of money I need to open a bank account?
- Is there a way to avoid or reduce the fees I pay?
- Can students get a break on bank fees?
- Once I couldn't immediately withdraw cash on a cheque I deposited because a "hold" was put on the cheque. What does this mean?
- What happens if I write a cheque and there's not enough money to cover it?
Accessing Your Money
- How do EasyLine Telephone banking and EasyWeb Internet banking work?
Financing Your Education
- How do students get student loans?
- I'm staying on campus. What is the best way to deal with switching my accounts to a different branch or city?
Budgeting Your Money
- What does budgeting mean?
- What's so important about a budget?
- I hate budgeting. What's the use of it?
- I've never been able to stick to a budget. What am I doing wrong?
- What do I need for a successful budget?
- What are the important factors I need to take into account when planning a budget?
- Are there different types of budgets?
- Can anyone open a bank account?
Yes. You will be asked for two signed pieces of suitable identification to open an account, such as a drivers license, passport, etc. As well, a Social Insurance Number will also be required for tax reporting purposes.
- What is the minimum amount of money I need to open a bank account?
There is no minimum amount of money required to open a bank account, but you may find that below certain balances there are fees that you may be required to pay. It is a good idea to make a small deposit to help pay for cheque orders and monthly maintenance fees.
When you are contemplating opening a new account, take a little time to evaluate how you want to bank, in terms of such things as the account balances you maintain and the number of monthly transactions you will have. Many banks have special student banking plans that can help take the guess work out of selecting an account plan because they are designed to provide the kind of services that students find they most often need.
- Is there a way to avoid or reduce the fees I pay?
Certain fees can be avoided or reduced. On automated transactions, such as Automated Banking Machine transfers, telephone banking and pre-authorized payments, most banks charge reduced rates compared to the fee charged for conducting an in-branch transaction. Some banks offer no-charge fee levels if you maintain a minimum monthly balance in the account.
- Can students get a break on bank fees?
Many banks offer accounts for students which offer the type of banking services that students are looking for at reduced rates.
Information about TD Canada Trust’s Value Plus Account – free for students – can be accessed directly from here.
- Once I couldn't immediately withdraw cash on a cheque I deposited because a "hold" was put on the cheque. What does this mean?
A "hold" means that your account has been credited with the value of the cheque but that you do not have the ability to access the funds until the cheque clears the account on which it was written. This doesn't mean that your bank doesn't trust you, it only means that your bank needs assurances that the account of the person who wrote the cheque has sufficient funds and has not stopped payment on the cheque. "Holding" the cheque allows the cheque to be processed by the bank of the person who wrote the cheque and for your bank to receive any notice of insufficient funds. Each bank has its own policy on the time limit of "holds" and under what circumstances it will place a hold on a cheque.
- What happens if I write a cheque and there's not enough money to cover it?
If you write a cheque that overdraws your account, your bank is not obligated to pay it. The cheque is then returned, not sufficient funds (NSF), to the person or company who tried to cash it via their bank. This can be an embarrassing situation to deal with.
One way to avoid this is to be approved by your bank for Overdraft Protection. Overdraft Protection allows you to overdraw your account up to an approved amount. But you are not charged interest until and unless you overdraw the account. Most banks charge a monthly fee for this service in addition to any interest charges. TD Canada Trust's monthly fee is $2.00. The annual interest rate is 21%.
- How do EasyLine Telephone banking and EasyWeb Internet banking work?
Basically, you use your computer or telephone to access your accounts. Once you're in there you can move money from account to account or pay certain bills like utilities, postdate bill payments up to 90 days, and view your account activity and balances without coming into the bank or writing a cheque. And confirmation numbers are provided so if you pay a bill you can keep a record of the payment. Two advantages to phone and web banking: the weather doesn't matter and neither does the time of day. If your life is busy, phone or web banking might be the convenient banking option that will make your life a little easier.
Check out EasyLine Telephone banking and EasyWeb Internet banking for more information.
- How do students get student loans?
The federal and provincial governments make available loans to students who meet certain criteria. As well, some banks offer special loan programmes for students. You can choose which method fits your needs best.
For government loans, application forms are available at all post-secondary schools. Once reviewed and approved, the loan schedule can be taken to any participating financial institution to be negotiated. It's important to be aware that financial institutions are becoming increasingly strict about repayment of student loans. Students who fail to keep up payments may find their credit status adversely affected since they will be reported to credit bureaus.
- I'm staying on campus. What is the best way to deal with switching my accounts to a different branch or city?
Ask your bank to do it. You can maintain your account at the home branch for a period of time, but let them know of your change of address. Your statement will be sent to your new address. Some banks may offer special moving services that are designed to help make the transfer of your financial affairs to a bank branch nearest your new address as painless as possible.
- What does budgeting mean?
Budgeting is a kind of balance between income and expenses. It helps you plan out your expenses and manage them in advance of paying them so you can ensure that you have more than enough money in reserve to cover your expenses. Expenses can be itemized within categories (for example, housing, utilities, food, entertainment, transportation, insurance, personal care, vacation and savings could all be budget items) and are over the time period you intend to manage (say weekly, monthly or annually).
Some expense items can be variable (i.e., they don't occur on a regular and predictable basis) and some are the same every month. Budget items are deducted from income. In the ideal budget, there are savings after expenses. The most basic of budgets balances income and expenses. When expenses exceed income, you are spending your reserve savings, and action should be taken to cut expenses or increase income to restore the balance.
- What's so important about a budget?
A budget is a financial tool to help you keep expenses and income in balance. As a student, your financial needs are fairly straightforward and predictable but your resources might be limited. Budgeting can help you to manage your spending patterns so you stay on track in managing limited financial resources.
As long as your expenses stay at or below your income or plan, then you're OK. If expenses exceed your expectations, you're spending your savings, running in the red. Once you get comfortable with budgeting, you will find that you can do more with your resources than you might have initially thought.
- I hate budgeting. What's the use of it?
Not everyone actually enjoys budgeting. But it is a tool to gain control over the financial part of your life. And finances are usually a key part of everyone's life.
- I've never been able to stick to a budget. What am I doing wrong?
It's not easy to stick to a budget. You may have variable items like personal care, entertainment or department store purchases that rise and fall every month. If you are consistently off budget, you need to take another look at the process.
Are you being realistic? You may have set savingsgoals that are too high. Or you may have taken on rent that is out of line with your income. You may be willing to live this way, but your budget should reflect this choice with accurate numbers.
Or are there areas where you could reduce expenses? Perhaps the best use of a budget is in really letting you examine your expenses in order to separate the essentials from the not-so-essential.
- What do I need for a successful budget?
The most important thing you need for a successful budget is the willpower to sit down and do it the first time.
Give yourself time to think of all your monthly expenses. Look in your cheque book and outline your typical bill payment schedule. Put expenses on one side of the page. On the other side, put your monthly income after taxes.
Forecast your expenses and income month by month, one month to a page. After a few months, you will find that a pattern emerges and that projecting your spending and planning for savings becomes easier and easier. For an example of one possible approach to a budget plan, link to TD Canada Trust's Student Budget planner.
- What are the important factors I need to take into account when planning a budget?
When doing a budget, you must take into account many factors.
Be thorough in evaluating your income and your expenses. You may have hidden items in each category. For example, bank interest for income and bank charges for expenses. Items may look small, but if you add enough of them up, they can be sizable.
Be honest. Commit to recording every expense. At the end of the month, your items should balance.
Don't be too tough on yourself. A life should contain a little enjoyment. Don't use your budget just as a stick. Put in a carrot, too.
The most important budgeting concept to learn as early as possible is how to plan for savings. Pay yourself first. As you consider all the expenses that you need to pay in any given month, always remember that paying yourself first should be at the top of the list.
- Are there different types of budgets?
Yes... budgets can differ and usually vary to reflect the specific needs people have at different stages of life. Whether you are a student or a young person just starting out on your career path, or you're in mid-life, or preparing for retirement, everyone has different financial requirements along the way and therefore needs different things from a budget plan.
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