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Canadians are often surprised by how different banking is in the U.S. versus back home. Understanding the differences, and how to manage them, can help make your time in the U.S. stress-free and enjoyable. Here is an overview of some of the primary differences you may come across when banking in the States.
Your U.S. debit card has more advantages. It can be used either with your signature or with your PIN, and it’s accepted worldwide. Because it’s a Visa‡ debit card, you can use it anywhere Visa is accepted—including at online retailers, to book hotels, buy airline tickets and more. But just like when you use your debit card in Canada, you must have funds in your account in order to make a purchase. It’s a Visa card, but it’s not a credit card.
Post-dated checks are processed when received in the U.S. Typically, post-dated checks are not accepted in the U.S., but if they are, the checks will be processed immediately. As soon as they clear, the amount is deducted from your account.
U.S. utility company bills must be paid in U.S. dollars. Unlike in Canada, they can’t be paid at any bank offices in the U.S. or via telephone banking or ATMs. It’s easiest to pay your U.S. bills using your U.S. checking account through RBC Bank’s Online Bill Pay.
U.S. bank account statements generally display two balances. The first, your available balance, is the amount of money in your account available for use. The second, your ledger balance, is calculated at the end of the day, and it includes deposits made by the bank cutoff time and checks that cleared. Your available balance may be lower than your ledger balance if some transactions, such as debit card transactions, haven’t yet posted. Also, some amounts will be reflected only when the entire transaction posts. Tips at restaurants, gas pump purchases, car rentals, and hotel deposits or reservations are examples.
If your overdraft protection line of credit has automatically advanced funds, you must make payments on the interest and principal in a separate transaction, by either calling your lender or transferring funds using Online Banking.
Debit card purchases are deducted from the available balance in your checking account. Your available balance may not include checks or debit card purchases that haven’t posted to your account. An overdraft line of credit can help prevent accidentally overdrawing your account and help you avoid the fees associated with an overdraft. Take note of the key difference here. Unlike in Canada, if funds from your personal line of credit have been automatically advanced to your checking account, you must make payments on the interest and principal in a separate transaction. You can repay the advance using Online Banking or by calling us. Or, you can set up an automatic draft as a recurring monthly payment.
In the U.S., transactions may take a few more days to post than you’re used to. Allow:
- 1-3 days for ATM or debit card transactions
- 5-7 days for bill payments processed by merchants
- Up to 5 days for a check
In the U.S. your deposits are insured by the Federal Deposit Insurance Corporation (FDIC)12. The FDIC guarantees the safety of a depositor’s accounts in U.S. member banks up to $250,000 USD per depositor for each deposit ownership category in each insured bank. In comparison, the CDIC insures Canadians’ deposits held at Canadian banks up to $100,000 CAN.
To close a checking account, you must contact the bank. In the U.S., bringing your account balance to zero does not automatically close your account. This leaves you open to incur monthly service fees that could overdraw your account. If you’re an RBC Bank client, call 1-800 ROYAL 5-3 (1-800-769-2553) to close your account.
