During my first year in Canada, my friend suggested that I speak with a financial advisor to get me acquainted with the various investment tools available. He directed me to an independent advisor (he is not affiliated with any of the major banks). Best of all, his services were free (I didn't have to pay him any consultation fee.) Independent financial advisors usually make their money from commissions that they draw from the financial institutions where you invest your money. The other type of financial advisor charges a consultation fee for his time. These are both generally accepted industry practices.
Now let'sgo back to how you can be smart and save even more, and I will relate my story with my financial advisor later. Like most immigrants, you will need to bring sufficient money to help you settle down and cover living expenses while looking for employment. As I suggested in my other article entitled, Opening a Bank Account, you will want to open 2 types of accounts immediately after you land in Canada. You will need to decide what type of Canadian checking account package to sign up for. At the start, I will recommend that you pick the checking account that allows you unlimited transactions a month for a minimum balance (usually $3,500 or more). Since you won't have a Canadian credit card, I will recommend that you use your bank card for purchases at stores (so you don't have to keep too much cash on hand). You will want to keep additional spending money on top of the minimum monthly balance required by the bank. If you fall below this amount, the bank will automatically charge you the monthly fee which is around $13. (Just imagine, $13 per month over one year is $156! You will need to find a bank that pays an annual interest of 4.4% on $3,500 before it makes sense to pay the monthly fee.)
Now if you brought in $10,000 and keep it mostly in your checking account or US dollar account, you will start to realize that the interest rates are painfully low! To give you an idea of current rates (as of 2010-07-14), the annual interest rate of a Scotiabank Canadian checking account is 0.000% for amounts below $10,000. Yes, you're reading it correctly - it's zero! The annual interest rate for a Scotiabank US Dollar Savings account is 0.010% for amounts below $5,000. Now, there are other investment avenues available to you, but you are still probably at the point where you want to be able to access your cash relatively easily and you feel you are not yet ready to take the plunge in RRSPs, RESPs, etc. (At this time of this article, I would not recommend GICs. This does not give you a lot of return for your money, and it restricts your access to your money.)
