Understanding Canadian Money, Banking, and Currency as a Newcomer (2026)
From the loonie to Interac e-Transfer — your practical guide to how money works in Canada.
Canadian currency: coins and bills
Canada uses the Canadian dollar (CAD), symbolized as $ or CA$. Prices in Canada are quoted in Canadian dollars unless explicitly stated otherwise. The exchange rate with the US dollar fluctuates — as of 2026, 1 CAD is approximately 0.72–0.75 USD.
How Canadian banking works day-to-day
Most Canadians do almost all their banking digitally — through a bank app or website. Physical branch visits are rare. Here is what you need to know:
Interac e-Transfer: Canada's everyday money tool
Interac e-Transfer is one of the most practical tools in Canadian banking. You can send money to anyone with a Canadian bank account using just their email or phone number. The recipient gets a notification and accepts the deposit through their own bank's app.
Many landlords accept rent by Interac e-Transfer. Split restaurant bills, pay a friend back, or transfer money between your own accounts — all free with most bank accounts (some charge per-transfer fees, check your account details).
Autodeposit: Set up autodeposit in your bank app so incoming e-Transfers land automatically without needing to answer a security question. It is faster and more convenient.
Key financial terms you will encounter in Canada
- →GST/HST — Goods and Services Tax / Harmonized Sales Tax. Added to most purchases. Ranges from 5% (federal GST only, in Alberta) to 15% (HST in Maritime provinces). Prices on price tags usually exclude tax.
- →T4 slip — Your annual tax document from your employer showing total earnings and deductions. Needed to file your income tax return.
- →TFSA — Tax-Free Savings Account. Investment or savings account where growth and withdrawals are tax-free. Any Canadian resident 18+ can contribute.
- →RRSP — Registered Retirement Savings Plan. Tax-deferred retirement savings. Contributions reduce your taxable income.
- →Direct deposit — How your employer sends your paycheque directly to your bank account. You provide your bank account and transit/routing number.
- →Void cheque — A cheque with VOID written across it, used to provide banking details for direct deposit setup (branch number, institution number, account number).
Tipping in Canada
Tipping is standard practice in Canada and is not optional in most service settings. At restaurants, 15% is the minimum, 18–20% is standard, and 20–25% is generous. Coffee shops and fast food usually have tip prompts — these are optional.
At sit-down restaurants, tip 18–20% on the pre-tax subtotal. Taxi and rideshare tip 10–15%. Hotel housekeeping $3–5 per night. Hairdressers 15–20%. When in doubt, 18% is safe.