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The world is going digital and banking is no exception. According to the Canadian Bankers Association, in 2017, more than 68% of Canadians were doing their banking online and through mobile— and that number is rapidly rising. There are many solid reasons to consider any of the online banks in Canada including convenience, features, and pricing. Read on to learn about this emerging trend in personal finance management, including our top picks for the best online banks in Canada.
Why Use an Online Bank
If you haven’t yet tried online banking, you might wonder what the fuss is about. After all, traditional face-to-face branch banking has served Canadians well for decades. Before you make up your mind, consider these three areas in which online banking in Canada exceeds in-person branch banking:
With online banking, your account is accessible from your computer, tablet, mobile app, or telephone. This means an end to searching for a brick-and-mortar branch or an ATM, and renders the concept of “banker’s hours” obsolete. If you want access to your money 24/7, online banking is the way to go.
Some brick-and-mortar banks offer customers “low-fee” accounts, but even these command a base monthly fee which can add up fast. In fact, Canadians are still paying an average of $200 per year in banking fees. With online banking, customers have the option of a no-fee account — usually coupled with extremely competitive rates for common services like Interac transfers and a high-interest rate on savings accounts. If you don’t want to pay for the privilege of accessing your own money, an online account might be just the solution.
Imagine asking a teller to deposit a cheque using a smartphone photo or to send money by email? They’d probably look at you like you have two heads – but Mobile Deposit and Interact e-Transfer are services that many online banks offer. In addition to all the traditional features to which customers have become accustomed, online banks offer special features that are simply unavailable elsewhere.
Finding the Best Online Bank in Canada
Traditional banks are being left behind by online banking in Canada. The only services online banks can’t offer that traditional banks can are safety deposit boxes, counter service, and in-person advice. That said, online banking does offer advice over the telephone or email and has the distinct advantage of being available 24/7 from wherever you are. Decreasing service fees, increasing interest rates, and a wider selection of convenient services make online banking an attractive choice.
|Online Bank||Best For|
|motusbank||Best For Multi-Products|
|Scotia OnLine||Best For Digital Interface|
|EQ Bank||Best For Super Savers|
|RBC Online||Best For Bundles|
|BMO Online||Best For Senior, Student, & Military Discounts|
|TD Online||Best For Mobile App|
|CIBC Online||Best Overall for Seniors|
|FirstOntario||Best For Ontarians Seeking a Credit Union|
|Simplii Financial||Best For Free Internet e-Transfers|
Tangerine: Best Overall
One of the best fully “branchless” online banks in Canada, Tangerine pairs some of the best online banking services with zero fees on all daily banking like withdrawals, transfer, and bill payments. Their 1.15% interest rate for savings accounts is respectable, but the 2.75% promotional rate when you sign up for a no-fee Tangerine Savings Account, TFSA or RSP Savings Account for the first 6 months is outstanding. For savvy savers, it's a great way to maximize your savings, and you can also earn up to $200 in cash bonuses simply by switching to a Tangerine Chequing account.
As of April 22, 2019, with the Tangerine Money-Back Credit Card you can earn 4% Money-Back Rewards on purchases in up to three Money-Back Categories of their choice, for the first three months. Plus, if you automatically deposit your cash back rewards into a Tangerine Savings Account, you get an extra third 2% Money-Back Category. Apply now before this promo expires on July 31, 2019! It’s a great way to get the best bang for your buck. Did we mention that there’s no annual fee for this credit card?
Tangerine has also been ahead of the game in using technology to enhance their services, and they've earned a reputation for excellent customer service, winning awards year after year. Should you need help, you can get in touch with a Tangerine Associate through an online chat session, a Twitter DM, or the 24/7 customer service line. Read our full Tangerine review to find out why it's our top pick for an online bank in Canada.
motusbank: Best For Multi-Products
Canada’s fastest growing credit union, Meridian, has just launched their new digital bank, motusbank, and it’s quickly creating a buzz across the nation. Of all the digital banks out there, motusbank offers arguably the most products for customers, as well as impressive interest rates that will appeal to people in different financial situations.
Both their high-interest savings account and RRSP savings account pay 2.25%, while their TFSA savings account offers a whopping 2.50% interest rate. As for their guaranteed investment certificates (GICs), the rates are currently at 3.00% for an 18-month GIC. But if you hold that within your TFSA, you’ll get a 3.10% interest rate – which is downright awesome. You can earn 3.25% if you lock it in an RRSP for 5 years. These rates are higher compared to other digital banks so it’s likely a promotional rate. Best of all, these are everyday rates that never expire.
The no-fee chequing account even pays a 0.50% interest rate, which is higher than all of the big banks. Plus, there are no monthly fees or a minimum balance required, and you also get other perks like unlimited Interac e-Transfers, mobile cheque deposits, and access to 3,700 EXCHANGE Network – one of Canada’s largest ATM networks.
If you need a mortgage, motusbank is the place to go right now: they’re offering a range of 3.02 – 2.92 APR rates on their 1-5 year fixed rate mortgages, as well as a 5-year variable rate mortgage at an incredible rate of 2.90%. They also offer personal loans, home equity lines of credit, and secured lines of credit. The bottom line: motusbank really does have a wide range of products and competitive rates, all of which can be easily accessed online or by a quick phone call.
Scotia OnLine: Best For Digital Interface
As one of Canada’s “Big 5” banks, it’s not surprising that Scotiabank’s online (web and mobile app) banking options are feature-rich and intuitive to use. Although most customers pay a monthly service fee of between $3.95 and $10.95 (accounts with a minimum balance and students accounts are free, and seniors get a discount), the interface and offerings were enough for Forrester to name Scotia OnLine as “The Best Consumer Digital Bank in Canada.”
EQ Bank: Best For Super Savers
EQ Bank takes an entirely different approach to online banking than the others on this list. With no branches and no ATMs, EQ is accessed entirely through the web and mobile app only – a totally unique model. Instead of using personal cheques, a debit card, or an ATM, clients can move money between their EQ Bank account and linked accounts. For those willing to try a new way of banking, the benefit is clear: EQ offers no monthly fees and 2.30% interest on their no-fee EQ Bank Savings Plus Account. While EQ Bank may not be as well known in Canada, it’s certainly a trust-worthy bank to stash your cash – owned by Equitable Bank, it’s been around since 1970. One thing to note: EQ Bank doesn’t offer a chequing account.
RBC Online: Best For Bundles
Another “Big 5” bank, RBC Online offers numerous account options at different levels with a wide range in monthly fees (from $4.00 to $30.00). Though they don’t waive fees for maintaining certain balances, customers can cut down their service charges by bundling RBC products (such as credit cards, investments, and/or mortgage). The RBC online banking option includes all the typical features, like transfer and bill payments, but there’s not much outstanding in their portfolio.
BMO Online: Best For Senior, Student, & Military Discounts
In line with the other “Big 5” banks on this list, BMO offers a standard set of features with standard rates, though customers with the Savings Builder Account can earn up to 1.6% interest. Although they offer discounts to seniors, students, and armed forces, the monthly fees range from $4.00 to $30.00 month. Their online banking interface is intuitive and has all the typical features.
TD Online: Best For Mobile App
Neither the account options nor the interest rates tempt with TD Canada Trust, but this bank does offer several decent no-fee savings accounts. They have a mobile app for online banking along with handy add-on features like TD MySpend that helps customers track and improve spending habits.
CIBC Online: Best Overall For Seniors
CIBC offers a full portfolio of account options designed for people at different stages of their lives and careers. In terms of fees and interest rates, CIBC is in line with the other Big 5 banks. One notable difference here is that unlike the other institutions on our list, CIBC offers five account types for seniors — everything from a simple chequing account to a bundle that includes a premium credit card to US dollar account for seniors.
FirstOntario: Best For Ontarians Seeking a Credit Union
The only credit union on our list, FirstOntario offers chequing and savings accounts, as well as free and paid options. Some of their features include online bill payments, debits, bank transfers, Interac e-Transfer, and personal cheques, along with a slew of nifty online tools. There’s even a feature that lets you round up on purchases and save the balance.
Simplii Financial: Best For Free Internet e-Transfers
Formerly PC Financial and affiliated with CIBC, Simplii is one of the branchless options for online banking in Canada. Like the name says, Simplii trades in simplicity, offering one chequing and one savings account, each without monthly fees. Using web or mobile, customers can do everything from pay bills to transfer funds to paperless cheque deposits. The no-fee chequing account offers unlimited debit purchases, bill payments and withdrawals, free access to over 3,400 CIBC ATMs across Canada, and free Interac e-Transfers.
Comparison of the Best Online Banks Canada 2019
When you’re ready to consider opening an online bank account in Canada, use this chart to compare the best online banks in Canada with the best online banking services.
|Tangerine||motusbank||Scotia OnLine||EQ Bank||RBC||BMO||TD||CIBC||FirstOntario||Simplii|
|Chequing Accounts||1 type||1 type||3 types||No||4 types||5 types||6 types||9 types||4 types||1 type|
|Savings Accounts||5 types||4 types||5 types||1 type||4 types||4 types||3 types||5 types||4 types||1 type|
|Student/Youth Accounts||No||No||2 types||No||3 Types||No, but special students/youth rates||2 types||2 types||No||No|
|Senior Accounts||No||No||No, but special seniors rates||No||No, but special seniors rates||No, but special seniors rates||No, but special seniors rates||5 types||1 type||No|
|Monthly Fees||$0||$0||$3.95-$10.95||$0||$4.00-$30.00||$4.00-$30.00 with discounts for seniors, armed forces, students||$0-$29.95||$3.90 to $28.95||$0-$10.00||None|
|Min. Balance to Waive Fees||No||No||$200-4,000||No||No||$3,000-$6,000||$2,000-$25,000||$3,000||No||None|
|Max Savings Interest Rate||1.20% (new clients earn 2.75% interest for the first 6 months)||2.50%||1.15%||2.30%||1.05%||Up to 1.60%||1.20% with $10,000 or more||1.20% with $5,000 or more and 1.8% on new deposits||1.5%||1.20%|
|Brick and Mortar Branches||No||No||Yes||No||Yes||Yes||Yes||Yes||Yes||No|
|More Info||Learn More||Learn More||Learn More||Learn More||Learn More||Learn More||Learn More||Learn More||Learn More||Learn More|
Comparing Tangerine and Simplii
When it comes to naming the best online banking services in Canada, the field narrows to the top branchless online banks: Tangerine and Simplii. Unlike traditional banks, these two carry no monthly fees, have robust feature sets, and are made for online or mobile use. With the exception of EQ Bank (which missed the top spot overall because of a lack of features such as ATM withdrawals), branchless banks offer similar interest rates to traditional banks but without the fees. While either option is a great choice for the average Canadian, there are some slight differences. Let’s take a closer look.
For chequing accounts, both Tangerine and Simplii offer:
- No fees for daily transactions including withdrawals, transfers between accounts, and Interac purchases
- Unlimited bill payments (one-time or automated)
- Unlimited ATM withdrawals within parents networks of machines (Scotiabank for Tangerine and CIBC for Simplii)
- Mobile cheque deposit (where you can use the camera on your phone to deposit a cheque)
- Overdraft protection (with application)
- 24/7 customer support
Tangerine vs Simplii Chequing Account
|Interest Rate||Up to 0.65%||0.05%-0.5%|
|Cheques||First book of 50 cheques free||Free|
|High-Interest Savings Account||1.20% (new clients earn 2.75% interest for the first 6 months)||1.20%|
As you can see, the difference between these two online banking options is really minor. Heavy users of paper cheques or Interac transfers may lean towards Simplii, while Tangerine has a slightly higher interest rate for chequing accounts that may entice savers. Otherwise, the choice may just come down to whether you prefer the CIBC or Scotiabank ATM network.
How Safe are Online Banks in Canada?
Every bank on our list is well-established in Canada and a credible financial institution. Like traditional banks, the odds of online banks failing are very slim. In any case, you can rest easy: the Canada Deposit Insurance Corporation (CDIC) covers eligible deposits in your own name, joint accounts, trust accounts, TFSAs, RRSPs, and more up to $100,000. It does not apply to investment products such as stocks, bonds, or mutual funds.
Security breaches of online accounts are rare, but it's always wise to choose a unique and complex password and PIN.
Why Go with Online Banking: Benefits of Banks with No Fees?
The best bank account in Canada for you is the one that helps you save money — not the one that costs you money to use. Based on that criterion alone, look for a trustworthy online bank without fees, like Tangerine or Simplii. Although neither bank has brick-and-mortar branches (so you’ll have to store your family jewels elsewhere), both offer the benefit of 24/7 online or mobile access, superior pricing (can’t beat no-fee!), and a full feature set including unlimited transactions, paperless cheque deposits, and Interac e-Transfer.
Ultimately, Tangerine stands out as the best online bank in Canada. Offering no-fee chequing and savings accounts, outstanding customer service, innovative banking technology, and competitive interest rates, Tangerine snags our top spot as the best online bank in Canada. You’ll enjoy a full range of banking services while keeping more money in your wallet where it belongs.
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