Best Online Banks in Canada
Bank fees cost the average Canadian $220 per year. And it’s only because the big banks can charge them more when they work together in an oligopoly. And it seems like their prices only go up.
There are, of course, other options, like online digital banks that don’t charge monthly maintenance fees and are easy to open.
Best online banks in Canada
We found a list of the best online banks in Canada by looking into dozens of mobile challenger banks in Canada and around the world. We’ll start by looking at the best online banks in each category, then move on to the best online banks overall.
Make the change today, and do yourself a favour.
Best Online Banks in Canada
Best online Bank in Canada for chequing accounts
Motusbank has made a big splash on the market, even though it didn’t start up until 2019. It is owned by the Meridian Credit Union. Motusbank, as one of the Best online Banks in Canada, among other things, has no monthly fees, over 43,000 ATMs that don’t charge fees, no daily banking fees, and no minimum balance.
Plus, your balance will grow by 0.15 percent. Motusbank also offers savings, GICs, mortgages, loans, and investment vehicles, in addition to checking accounts.
Best online Bank in Canada for savings accounts
We chose EQ, but KOHO is also a good choice. EQ, as one of the Best online Banks in Canada, we must note that the savings rate on EQ’s Savings Plus Account is one of the best in Canada. Its savings rate is 1.25 percent when it is not on sale.
There are also no monthly or annual fees and no minimum balance (the most you can have is $200,000). The interest rate is calculated every day based on the balance at the end of the day and paid every month.
You can get money out of your EQ Bank account in two ways:
via Interac e-Transfer
via Electronic Funds Transfer (EFT) to the accounts you have linked.
Best online Bank in Canada for cashback
The best cash-back card is the Tangerine Money-Back Credit Card because, unlike other cash-back cards, you can earn as much cash-back as you want.
When you use your Tangerine Credit Card to buy something, you get cash back. You get 2% cash back on everything you buy in the 2% Money-Back Categories of your choice, and 0.50% cash back on everything else.
You have two choices for how to get your cashback:
- Apply it to the credit card
- Deposit it into your Tangerine savings account
With the first option, you can choose between two 2% categories. With the second option, you can choose between three 2% categories. You can change your 2% cash-back categories at any time through your online account to match how you spend.
Best online Bank in Canada for credit cards
We think the best credit card on the market is the Money-Back Credit Card from Tangerine. We’ve already talked about how you get cashback, but it’s also free to get one. Also, there is no fee every year. There are, however, a few rules:
- Gross income of $12,000 or more per year
- The age of majority in your province or territory
- A permanent resident of Canada
- In the last seven years, there have been no bankruptcies.
There are other benefits to this credit card, like a 90-day purchase protection and a one-year extended warranty. The amount of interest is 19.95%. Authorized users on your account can also get free cards.
Best online Bank in Canada to get paid early
This is another thing that KOHO does that most banks in Canada, even digital-only ones, don’t offer: early payroll. There are two things you can do:
- For $5, you can get $100 right away and a financial coach for 15 days.
- You can get up to $100 for free up to three days before you get paid.
You’ll need to set up a direct deposit in order to get paid early. You can use direct deposit for all or part of your paycheck. The $100 will be taken out of your account automatically when you get paid.
Best online Bank in Canada for GICs
Oaken has some of the best interest rates in Canada, so we picked them as the best GIC provider. Their GICs come in both registered and non-registered plans, and they offer the following:
Accounts that don’t charge taxes (TFSA)
Retirement Savings Plan (RSP)
Retirement Income Fund (RIF)
The terms range from 30 days to 5 years, so it’s easy to find one that fits your schedule. Guaranteed Investment Certificates (GICs) are a safe way to invest your money because both your principal and your interest rate are guaranteed.
For a 5-year term, the rate for long-term GICs is 2.20% per year. Long-term GICs can’t be cashed in, and you have to put down at least $1,000 to get one. Registered GICs (RSP, TFSA, and RIF) start at 1.40 percent for one year and go up to 2.20 percent for five years.
The interest rate on Oaken’s savings account is 1.15 percent, which is one of the highest rates out there. There is no minimum balance and there are no fees.
Best online Bank in Canada for metal cards
At the moment, KOHO is the only online bank that gives its customers a metal card. It’s a limited-edition, cotton-candy-colored, gold-plated (gold and pink). It’s a really unique design that won’t appeal to everyone, but it will definitely make you stand out.
You’ll have to pay $159 for exclusivity, or you can get it for $50 less if you refer two people to KOHO. If you tell someone about KOHO and they sign up and make a purchase within 30 days, that counts as a referral. Look at the coolest metal cards from all over the world.
There are no NSF fees, e-Transfer fees, or interest fees on a KOHO account. You can get between 0.5% and 2% cash back on all purchases, automatic savings and budgeting, card security features, and virtual cards.
Best online banks in Canada
- Started in 2016
- Founders: Equitable Bank, Andrew Moor (CEO)
- Parent bank: Equitable Bank
- Personal accounts (spending, saving, joint, US Dollar, GICs…)
- Simple to start online
- No fees every month
- Cheap transfers between countries
- US dollar account
- Shared account
- Interest rate of 1.25%
We really like how easy it is to get an EQ account. Sign up in minutes for a joint, TFSA, USD, and Retirement Savings Plan account with a great interest rate. You won’t be able to get cash out, but transfers to other EQ users and bank accounts are usually free.
What we liked most about Wise was the 1.25 percent interest rate and how cheap it was to send money to other countries.
- Started in 1997
- ING Direct and Gillian Riley (CEO) are the founders
- Scotiabank is the parent bank.
- Personal accounts (spending, saving, joint, US dollars, GICs, RSP, RIF, credit cards, loans, etc.), business accounts
- No maintenance fee
- Free ATM deposits and withdrawals
- Rate of interest of 0.50%
- No minimum balance
- Accounts for saving CA$ and US$
Tangerine Bank is a popular mobile bank in Canada. Its financial products are very similar to those of big banks. But it’s very different when it comes to fees, which are usually low and not very common. Still, it’s one of Canada’s more well-known online banks.
Opening an account is easy and can be done entirely online. In return, there are no monthly fees and you can make as many purchases and ATM withdrawals as you want for free. When you need a credit card or a loan, they have very low interest rates.
- Started in 2018
- Founders: Meridian Credit Union, Gery Genik (CEO)
- Meridian Credit Union is the parent organization.
- Accounts for spending, saving, GICs, mortgages, loans, and so on.
- No minimum balance required
- Mobile cheque deposits
- 43k free ATMs
- Interest rate of 1%
- There are no daily bank fees
Motusbank is a full-service bank that was started by the Meridian Credit Union. It offers savings and checking accounts, investing, loans, and mortgages. Their checking account has no monthly fees and gives them free access to more than 43,000 ATMs in North America. Deposits up to $100,000 are protected by the CDIC.
Their high-interest savings account beats the rates of the big banks and is only similar to the rates of Tangerine and EQ Bank.
- Started in 2017
- Kristian Kuhn (CEO) and the Canadian Imperial Bank of Commerce (CIBC) are the funders
- The Canadian Imperial Bank of Commerce is the parent bank (CIBC)
- Accounts for spending, saving, GICs, mortgages, credit cards, loans, and other personal things.
- There is no minimum deposit for anyone.
- There are no daily bank fees
- 1.50 percent interest for new clients
- Not available in Quebec
Simplii is a great addition to the Canadian banking scene for people who only use their phones. The smallest of the big five banks is CIBC’s digital division. It has the best of both worlds: a wide range of products, low or no fees, and reasonable interest rates.
We love how easy it is to apply for any of its products online, so it’s too bad that the people of Quebec can’t do the same.
- Founded: 2014
- Daniel Eberhard, Jonathan Bixby, Joshua Bixby, and Mike Benna started the company.
- E-money institution
- Peoples Trust is a partner bank.
- Personal accounts (spending, saving, joint)
- Early paychecks
- Tools for budgeting
- Different kinds of cards to choose from
- Credit builder
- ATM withdrawals are free.
KOHO is an interesting idea that gives its customers a Visa card that can be reloaded and an app that helps them track their spending and manage their money. It doesn’t have anything really new to offer, but the cashback, budgeting tools, and unique Visa cards are enough to attract younger people who are used to digital banking.
Get 1.2% interest on your savings, your earnings, and everything else in your account. This is an annual rate that will be calculated every day and paid out every month to give you the most money that you can use whenever you want.
- Started in 1992
- Robert Paterson is the President and the CEO.
- Alterna Savings is the parent institution.
- Business accounts, loans, and personal accounts (for spending, saving, mortgages, and investing)
- Start a bank account in minutes
- 1.00% savings interest rate
- No-fee checking account
- No minimum balance
- Free to do as many deals as you want
- ATMs +3.300
Alterna is another great online bank that helps Canadians in a lot of ways. It’s a great alternative to the big five banks because it has all the financial products you could need. You’ll love that there are no monthly fees and you can make as many withdrawals, bill payments, transfers, checks, and other transactions as you want for free.
Even though they still don’t offer credit cards, they do offer TFSAs, RRSPs, term deposits, and mortgages, which we like to see. Alterna also helps small businesses with their loans and checking accounts.
Benefits of digital banking, best online banks in Canada provides:
- Low fees to none
- Better interest rates
- Simple to use
People who are willing to leave one of Canada’s “big five” banks for a digital or mobile bank can get a lot out of it. People still don’t want to join one of the “challenger banks,” though. A lot of them are already owned by big banks or credit unions.
That means that the CDIC will still cover up to $100,000 of your deposits, but provincial deposit guarantee corporations may cover up to 100% of your deposits, no matter how much you put in. Let’s find out what else digital-only banks have to offer.
Low to no fees
If you’re tired of paying a lot every month for banking services you rarely use or don’t even need, you’ll be happy to hear that challenger banks like Revolut and Wise, which are based in Canada but also operate internationally. As best online banks in Canada, they charge low or no fees for their financial products and services. Don’t get me wrong, they still make money, but their business model doesn’t include charging customers outrageous fees.
Better interest rates
It is common knowledge that big banks will give you terrible interest rates, if they give you any at all. Do you think 0.05% is worth it? Digital banks can offer higher interest rates on savings accounts because they don’t have to pay for things like bank tellers and retail space.
In some cases, you can even get interest on the money in your checking account.
Low fees to none
Online banks also try to be much more open about how they do business than traditional banks. Many of the challenger banks offer free current accounts and more advanced options that cost a monthly fee.
Most of these banks are proud of the fact that they don’t have any hidden fees. This “fee-free” service is also available overseas, where many challenger banks offer free international transactions and free cash withdrawals to attract travelers.
Digital-only banks still make money, but they don’t take advantage of their customers by charging them too much.
Simple to use
Is going to the bank the worst thing that can happen? I thought it was as important as going to the dentist. Thanks to mobile banks, you can open an account without having to drive to the bank and pay for gas and parking.
You can start banking as soon as you fill out the online form, upload your ID, and take a selfie.
Not only is it easy to open a bank account online, but there are other things that are also helpful. You can apply for a mortgage and do just about everything else that has to do with your money from your couch. Start by opening your banking app and finding the menu.
Budgeting and analytics
Many online banking apps have a budgeting and analytics system that is more or less advanced, as well as reports that give you a full picture of what you’ve spent and saved. Find out which kinds of spending are taking money out of your account and change the way you spend.
If you turn on the autosaving feature in the app, your transactions will round up to the nearest dollar, and the change will be put into a savings account.
You no longer need a credit card because some banks that are only accessible by phone give cash back on everyday purchases. It was about time that you got something back!
Drawbacks of online banking
- Customer service
- Fewer financial products
- Fewer options for depositing
Digital banking isn’t perfect, and most independent fintech companies were only started less than 10 years ago (some only a couple of years ago). Most mobile banks in Canada are just extensions of banks that have been around for a long time.
Let’s look at some of the problems with online banks in Canada, though.
This is likely the biggest problem that small banks have over big banks. You have to do all your troubleshooting online because there are no physical branches. This isn’t always the best solution, especially if you have a problem that needs to be fixed quickly and costs a lot of money.
Even though all of the apps have a chat feature, you may have to wait a long time for someone to answer your questions, or you may only be able to talk to a chatbot. It’s true that some big banks do this as well.
Fewer financial products
Some online-only banks have a lot less financial products than their high street counterparts. This might not be a big deal in Canada. In this area, Canadian neobanks are good because they offer a good range of products and services.
Fewer options for depositing
This comes down to the fact that there aren’t any real branches. If you have cash on you and want to put it in your bank account, you might run into trouble. Same thing with checks, since you can’t scan a check with your phone at any neobank.
How safe is online banking?
When it comes to banking, security is very important, and some people may worry about how safe digital banks are. But digital banks are on the cutting edge of security and other innovations.
Fintech companies keep coming up with new high-tech ways to protect privacy and security, such as identity authentication. When you sign up for a mobile banking app, you have to prove who you are using strict methods like voice recognition, facial recognition, and fingerprint scanning.
In many cases, traditional banks are taking security tips from digital banks, which should make you feel better.
What features do online banks offer that traditional banks don’t?
- Easy and quick to fill out online
- Acceptance in minutes
- Reports and predictions every month
- Customer service inside the app
- Bill splitting
- Accounts that pay interest, whether they are savings accounts or not
- No hidden fees
- No boring paperwork is needed
- Features of advanced analytics
- Foreign transactions and ATM withdrawals will cost less or not at all
How to start using online banking
This is the best thing about being a part of the revolution in digital banking. Most online accounts can be set up in 5 to 10 minutes or even less. Go to the website of your mobile bank and click or tap the “Get Started” button. You can also get the banking app yourself from Google Play or Apple’s App Store.
Best online Banks in Canada
Even though it might seem like online banks are all the same, that’s a good thing because the things that make them the same are the things that help their customers the most. I’m talking about things like no monthly fees, free unlimited transactions, no ATM withdrawal fees, and other cool things.
We think that Canada is lucky to have some of the best online banks in the world. From a variety of financial products and services to up to $100,000 in CDIC insurance, everyone should pay attention.
At this point, there are few, if any, reasons to stick with one of the big five. Yes, I’m aware that they also have digital branches, but at least you don’t have to pay them a lot of money just to join.
It’s not hard at all to close an old bank account and open a new one with a cool app. The exodus would be even bigger if mobile banks had a service for swapping accounts.
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