Important: You can now submit a Claim for the Removed Child Class and Removed Child Family Class. Learn more about how to complete a Claim.
The information on this page includes:
Opening a savings or chequing account
Rather than cashing your compensation through a cheque-cashing or payday loan company, consider depositing it into a low or no-fee chequing or savings account. Cheque-cashing or payday loan companies often charge high interest or fees, meaning you’ll end up with less money.
By depositing your compensation into a bank or credit union account, you ensure that you receive the full amount.
If the community you live in does not have a local branch of a bank or credit union, you could consider opening an online account. You can do this without having to physically go anywhere.
Whatever your needs and goals, it may be helpful to discuss your options with a bank, credit union, organization or person you trust who is good with finances.
Why open a bank or credit union account?
Opening an account offers several benefits:
- Keep your money safe: Your money won’t get lost or stolen.
- Help you manage your money: You can track your spending and plan for the future.
- Save more money: Unlike cheque-cashing and payday loan services, most banks and credit unions charge little or no fees to deposit your cheque, allowing you to keep more of your compensation.
- Make life easier: Pay bills, withdraw money and make online purchases whenever you need.
- Grow your money: Explore investment options to help your money grow.
Not sure about using a bank or credit union?
If you have concerns about banking, here are a few tips to help make banking work for you:
- Ask questions: You have the right to know about account features, such as fees, limits and online services, before choosing a bank or account type.
- Start small: You don’t need a large deposit to open an account. Many banks and credit unions offer accounts with no deposit required.
- Choose a trusted bank or credit union: Look for a bank or credit union that offers low or no-fee accounts. Some offer accounts designed specifically for Indigenous Peoples.
- Rest easy knowing your money is protected: Banks that are members of the Canada Deposit Insurance Corp. (CDIC) protect your deposits, so your money is safe even if something happens to the bank
Before you open an account
Here are a few things to consider before choosing a bank or account:
- What fees does the bank or credit union charge? Some accounts have no fees, while others may charge monthly fees.
- Which account suits your needs? Ask if there are accounts tailored to your situation, such as options for students, seniors or people with disabilities.
- How can you access your money? Ask about online banking, debit cards and ATM locations.
- Is your money insured? Most Canadian banks protect your money through Canada Deposit Insurance Corp. (CDIC) deposit insurance, so even if something happens to the bank, your money stays safe.
- Are there limits on the account? Check if there are limits on deposits or withdrawals, or if there are holds on cheques while the bank processes the deposit.
Types of financial accounts
What you do with your compensation is completely up to you. The decision to save, spend, or invest depends on your personal situation and your goals. A bank, credit union, organization or person you trust who is good with finances can discuss what may be good for your situation.
Here’s an overview of some different financial products and their benefits:
Tax-Free Savings Account
Contribute to your Tax-Free Savings Account (TFSA) each year, and the money grows without being taxed. Depending on the type of investments in your TFSA, you may be able to withdraw money at any time, with no penalties. each year, and the money grows without being taxed. Depending on the type of investments in your TFSA, you may be able to withdraw money at any time, with no penalties.
- Benefit: Your money grows tax-free.
- This could be good if: You want to save for long-term goals like purchasing a home, starting a business, or creating a financial cushion for emergencies.
- Considerations: There is a limit to how much you can put in a TFSA each year.
Registered Retirement Savings Plan
A Registered Retirement Savings Plan (RRSP) is an account that helps you reduce what you pay in annual taxes in the year you add money to the account while also helping you to save for the future. Money in the RRSP is only taxed when you withdraw it.
- Benefit: Save for the future while reducing taxes in the present. As a retirement account, you would withdraw from an RRSP after you’ve retired. If you’re in a lower tax bracket when you retire, this means you pay less tax when you take the money out of your account.
- This could be good if: You’re employed, earning taxable income and want to reduce the taxes you pay now while building savings for retirement—especially if you plan to retire in a lower-tax situation later.
- Considerations: Withdrawals from an RRSP are taxable. A penalty is applied to withdrawals that happen before you retire. If your income is not taxed because it's earned on a reserve, contributing to or withdrawing from an RRSP won't impact your tax situation. Consider talking to a tax professional who specializes in First Nations[1] taxation if you have questions.
Registered Education Savings Plan
A Registered Education Savings Plan (RESP) helps save for post-secondary education, including tuition, books and even rent while in school, for you, your child or another person you choose. The government adds money to your RESP through programs like the Canada Education Savings Grant and Canada Learning Bond that can help you increase your savings over time.
- Benefit: Additional funding from the government to help save for education.
- This could be good if: You or your child want to attend university, college or trade school.
- Considerations: The beneficiary of an RESP (you, or child or another person you choose) must use money from the plan to pay for school and other related expenses, such as books, tools, transportation and rent.
Registered Disability Savings Plan
A Registered Disability Savings Plan (RDSP) is designed to help people with disabilities save for the future. The government adds money to your RDSP through programs like the Canada Disability Savings Bond that can help increase your savings over time.
- Benefit: Extra savings from the government.
- This could be good if: You’re looking for a savings option that offers government contributions to increase your savings.
- Considerations: The person the RDSP is opened for must first be approved for the Disability Tax Credit.
Questions to ask your bank, credit union or financial professional
When planning your finances and choosing a financial account that works for you, it’s important to ask questions to ensure you make the best choice for your situation. Here are some questions to consider asking when speaking with someone about your financial plan:
- What should I keep in mind when thinking about my short-, medium -and long-term goals?
- What financial products could be good for me and my life situation?
- What kind of risk can be expected with this type of investment? Does this level of risk make sense for me and my goals?
- Are there any penalties if I need to access my investment early?
- How can I benefit from interest rates, and how will they impact my savings or investments?
- How might using certain accounts affect my taxes?
Getting answers to these questions will help you gain a clearer understanding of your options and make informed decisions based on your goals.
[1] First Nations: Under the Removed Child Class, as defined in the Settlement Agreement, a First Nations individual is someone who:
- Is registered under the Indian Act
- Was entitled to be registered under section 6 of the Indian Act as it reads as of February 11, 2022
- Is a band member of a First Nation that controls its membership and was included on the band membership list before February 11, 2022