A Guide to Online Banks in Canada

Tangerine

By now, most of us are familiar with online banking, also known as digital banking. This term refers to banks that operate primarily online. This can mean banks that offer in-person services but put an emphasis on their online presence or banks that operate solely online with no brick-and-mortar establishments.

This style of banking has become increasingly popular over the last decade due to the convenience and practicality it offers over traditional banking establishments, providing 24/7 access to your money instantly. This access has made online banking one of the most used ways to manage money.

However, with this increased popularity came many new options for online banking. So, to help you make the best decision to suit your financial needs, we turned to the professionals at Wealth Rocket to help us create this guide to online banks in Canada. Let’s get started.

Tangerine

Tangerine first entered the stage for online banks in 2014. Once known as ING Direct Canada, this subsidiary of Scotiabank made a name for itself by offering no-fee chequing and savings accounts with unusually high interest rates, not to mention the low-fee investments designed for bankers with long-term goals. Tangerine explains that their high interest rates and lack of fees are thanks to not having brick-and-mortar banks as a way to pass these savings on to their clients.

Instead of opening traditional branches, Tangerine has what they refer to as “cafes” in various places around Canada, including Toronto, Montreal, Vancouver, and Calgary. These cafes are simply places to learn more about the company’s services and get financial advice with a cup of coffee.

Tangerine boasts some of the highest-rated customer services and what’s largely considered the best mobile banking app in Canada for iOS and Android users. They also offer two credit cards through Mastercard, including Tangerine’s Money-Back Credit Card and Tangerine’s World Elite Card. Neither card has an annual fee, and interest rates are fair at 19.95 percent, with both cards offering cash-back up to 2 percent.

Simplii Financial

Simplii Financial is a direct bank founded by CIBC. After CIBC ran a joint venture with the Canadian grocery store chain Loblaws called PC Financial, the company got its start. PC Financial still offers insurance services and credit card options. However, all customers who had bank accounts, including mortgages, investments, or other loans, with PC Financial were transferred to Simplii Financial.

The company had a rough start with frequent call center delays and a data hack, but the company seems to have figured these problems out to make itself one of the top online banks in Canada. Simplii Financial offers no monthly or annual fees, unlimited transactions, e-transfers, and wide-range account offerings. They may not have the best app out there, but it’s user-friendly enough to make everyday use a breeze.

EQ Bank

EQ Bank, otherwise known as Equitable Bank, is a direct bank that started in 1970. Similar to Tangerine, EQ Bank no longer offers any in-person institutions. However, they offer 24/7 online banking and customer service from 8 A.M. to midnight EST every day. EQ Bank offers consistently high interest rates for their saving accounts, attracting many frugal Canadians. What sets EQ Bank’s saving accounts apart is that they can be used similarly to a chequing account, as you can pay bills and send money without any fees from your savings account while it’s still accruing interest.

Like most other banks, they also offer a mobile banking app for iOS and Android. However, EQ Bank doesn’t provide a physical debit card or ATM access, and customer service wait times can be lengthy due to their small staff, which may dissuade some Canadians.

Online Banking, Your Way

With this brief guide to online banking in Canada, you should have all the information you need to make the right decision for your finances. Using this information, you can look at your financial needs and decide which bank best suits you.