6 of the most popular online banks in Canada
Nowadays, people tend to do most of their transactions online. You can buy anything you want, from takeout, groceries and clothing to household items, with just a few clicks. Comfort is hard to beat. As such, it should come as no surprise that more and more Canadians are also doing their banking online, be it through online banking portals or mobile banking apps.
The fact that we can take care of so many aspects of our personal finances online has meant that some banks are completely virtual and don’t even have physical branches. If this topic interests you, you are in the right place. This article will explore some of Canada’s most popular online banks, including what they offer and how they differ from traditional banks.
EQ Bank is the online-only branch of Equitable Bank, following the same online banking model as Tangerine. What sets it apart from the competition is the interest rate it offers on its savings accounts, which is currently higher than many other banks: 1.25%.
It has several benefits, like the fact that it doesn’t charge monthly fees, doesn’t require a minimum balance, and offers free bill payments and Interac wire transfers.
In addition, you will have various investment options, such as RSP, GIC and TFSA and the possibility of making international money transfers and accessing more than 2,000 mortgage products.
EQ Bank deposits are insured by the Canadian Deposit Insurance Corporation (CDIC), so you don’t have to worry about the security of your transactions.
The Manufacturers Life insurance company owns this direct bank . It offers current accounts, savings accounts, loans, mortgages and investment accounts. As of March 2022, they also offered a free account service, which only applies to accounts with a minimum balance of $1,000. If your account balance is less than the minimum, you will be charged service fees. The All-In Banking Package costs $10 per month, which is relatively low compared to other financial institutions.
Manulife Bank lets you use its thousands of ATMs for free through The Exchange Network. You can manage all your banking services online, such as bill payments, money transfers and fund deposits. You can also earn interest on a US dollar savings account.
Motusbank is a full-service digital bank that focuses on the needs of its customers rather than what’s best for its shareholders (fun fact: they don’t have any!). For that reason, they offer competitive prices and services and the flexibility to do everything online or by phone.
You can take advantage of several different Motusbank products that have low or no fees. For example, they charge no fees for your checking account and offer THE EXCHANGE® Network , the largest fee-free ATM network in Canada. At this time, they also do not charge transaction fees on high-yield savings accounts and checking.
If you’re looking for help planning for your future, they offer virtual financial planning services to help you grow your wealth and save for retirement. They’ll work with you to assess your budget, spending habits, and short- and long-term goals to help you create a plan to help you reach your financial goals. Motusbank is owned by Meridian Credit Union .
Simplii is a 100% virtual direct bank. It is owned and operated by the Canadian Imperial Bank of Commerce (CIBC), a well-known financial institution in Canada and the rest of the world.
In addition to its mobile banking features such as check deposit, bill payments, and wire transfers, Simplii also offers investment options such as high-yield savings accounts (2.20% as of March 2022), TFSA, GIC, RRSP and more.
The Simplii credit card offers an introductory interest rate of 9.99% for the first year, in addition to bonuses and repayment benefits. You can also apply for a 25-year fixed or variable rate mortgage. Simplii’s financial experts can help you in terms of financial planning if you’re not sure how or where to start.
One of Canada’s best-known online banks is Tangerine , a direct bank that has no physical branches. This allows the company to save on operating costs.
Tangerine is a division of Scotiabank, and used to be called ING Direct. When it was founded in 1997, it was the first bank to introduce fee-free high-yield savings accounts in Canada.
Today, Tangerine can cover all your personal banking needs. It offers digital banking (online and on mobile devices), credit card accounts, mortgages, and investment accounts, such as GIC.
You can also grow your savings with RRSP accounts, tax-free savings accounts, and RIFs. As of March 2022, Tangerine also offered a 2.25% savings account rate, plus rebates of up to $300 on new checking and savings accounts. If you take advantage of this offer, the interest rate is 0.10%, it does not require a minimum balance and there is the option to create a personalized savings goal through an automatic savings program.
Although WealthSimple is not a bank per se, it is an interesting option for Canadians looking for unique investment opportunities.
Clients can choose from a wide range of products such as individual investment accounts, RRSP, RRIF, tax-free savings accounts, LIRA, Business, Joint and cryptocurrencies.
WealthSimple is known for its easy trading. Users can take advantage of free accounts and learn how to trade stocks. Their target market is millennials interested in putting their money on autopilot while learning about the process. They offer educational resources for people who want to learn more about investing, personal finance, taxes, and more.
The benefits of using an online bank in Canada
A big advantage of an online bank is that they often charge little or no fees for everyday banking. Banking becomes a breeze when you can manage all of your personal finances on your computer or mobile device.
Online banks often offer lower interest rates on loans because they have lower overhead, fewer employees, and no physical branches to maintain. This also allows them to offer higher interest rates on savings accounts and lower annual interest rates on credit cards.
However, they also have certain limitations. For example, they don’t offer all of the banking products that traditional financial institutions offer, such as mutual funds or personal loans. But most offer everyday banking solutions and even a line of credit.
Depending on your needs, limited service offerings may or may not be a problem. Wire transfers are easy to do, but sending an international money transfer can be tricky, even through Canada’s online banks.