How to Switch Banks in Canada: The Easy Step-by-Step Guide

Switching banks in Canada is easier than most people think. Follow this checklist to move your account in under two weeks without missing a payment.

Why Switch Banks in Canada?

The most common reason Canadians switch banks is to eliminate monthly fees. Canada's Big Five banks charge $15–$30/month for standard chequing accounts — up to $360/year. Digital banks and fintech apps like KOHO, Tangerine, and Simplii Financial offer identical core banking features for free. Switching can save hundreds of dollars per year with minimal effort.

Other reasons to switch include better savings rates, higher cash back rewards, better mobile banking experience, or dissatisfaction with customer service.

The Complete Bank Switching Checklist

Step	Action	Timeline
1	Open new account and verify it works	Week 1
2	List all pre-authorized debits (PADs)	Week 1
3	List all pre-authorized credits (direct deposits)	Week 1
4	Update direct deposit with employer/CRA/benefits	Week 1–2
5	Update all pre-authorized debits with new account info	Week 1–2
6	Keep old account open for one full billing cycle	Week 2–4
7	Confirm all payments have moved to new account	Week 4
8	Close old account (request written confirmation)	Week 4–5

Step 1: Open Your New Account

Choose your new bank and open an account. With digital banks like KOHO, this takes about five minutes on your phone. You'll receive your new account number and transit number immediately — you need these to update direct deposits and pre-authorized payments. Use code 45ET55JSYA when signing up for KOHO to earn a $20 welcome bonus.

Step 2: List All Pre-Authorized Debits

Go through three months of bank statements and list every pre-authorized debit — these are automatic payments that pull money from your account on a schedule. Common examples include:

• Rent or mortgage payments
• Utility bills (hydro, gas, internet)
• Insurance premiums (car, home, life)
• Streaming subscriptions (Netflix, Spotify)
• Gym memberships
• Loan repayments
• CRA installment payments

Step 3: Update Direct Deposit

Contact your employer's payroll department and provide your new banking information (institution number, transit number, account number). Most employers need 1–2 pay cycles to process the change. Also update your direct deposit with:

• Canada Revenue Agency (CRA) — update via My Account at canada.ca
• Employment Insurance (Service Canada)
• CPP/OAS payments (if applicable)
• Any provincial benefits

Step 4: Keep Your Old Account Open During Transition

Don't close your old account immediately. Keep enough money in it to cover any payments that haven't switched yet. Give yourself at least one full billing cycle (30 days) after updating everything before closing. This prevents missed payments due to slow-updating merchants.

Step 5: Close Your Old Account Properly

To close your Canadian bank account, visit a branch (for big banks) or contact the bank by phone or secure message (for digital banks). Request written confirmation of the account closure and keep this for your records. Ensure your balance is $0 before closing — some banks charge a fee if you close an account with a negative balance, and some will send a cheque for any remaining balance.

Canadian Bank Switching Rights

Under Canada's Code of Conduct for the Credit and Debit Card Industry and FCAC guidelines, Canadian banks are required to make it reasonably easy to close accounts and transfer your information. They cannot charge a penalty for closing a standard deposit account. If a bank makes closing difficult, you can file a complaint with the Financial Consumer Agency of Canada.