I went for a second (thought it's technically third and fourth - explained later) bank account today. Through a long discussion with the salesperson, I managed to get a better understanding of just why banking here is such a pain, and why it's so safe. First, all the things you really notice that are different:
- No more than $800 per day from an ATM, for example. Similar for buying things in store (called Interac here).
- Most times your bank card will have two accounts associated with it. One, called 'Chequing', is for daily banking and offers lots of transactions. The other, called 'Savings', offers few transactions but much better interest.
- You need a credit history to open a regular account, even if it has no credit.
- People use cheques a lot, and electronic transfers between accounts seems new and difficult.
So why all these quirks?
Banks here must impose tighter restrictions on the flow of money. That explains why there's a really tight limit on ATM withdrawals. And why they normally give you two accounts - one which doesn't move, and one which does, so their bookkeeping is more accurate.
When you deposit a cheque into your savings account the bank has to take it on trust it is all correct. Until proper checks are made, they have to trust you, and so you need a credit history.
Of course, some people need to make large purchases. But again, you want to make sure that the flow of money can be halted in case of economic meltdown. So cheques are needed, because they can be cancelled.
In the end, it's a monetary system that can never get out of hand because it's moving slowly and methodically, with lots of checking (no pun intended).
Update: Check out PADs for an interesting read on doing 'safe' electronic transfers. To set up a PAD involves the use of a void cheque...
