Best Online-Only Banks

Compare Canada's best online only banks here.

WRITTEN BY
Lisa Rennie
Updated October 9, 2020

Categories
Tags

There is very little that we can’t do online. Not only are we shopping, communicating with others, and even monitoring our homes remotely via the internet, but we are also doing our banking online. And while traditional banks have their own online portals to add to the convenience for their clients, there are several banks that are entirely virtual. 

People are becoming increasingly internet-savvy, and more and more consumers – particularly millennials and younger – prefer to do the majority of their banking via their laptop, tablet, or mobile phone, and online-only banks are catering to their needs and desires. No longer do you have to visit a bank teller to deposit a cheque, pay a bill, or even take out a mortgage. Right now, you can do that all virtually from the comfort of your home. 

So, what are the best online-only banks that you should entrust with your money? Let’s take a look. 

Tangerine

Tangerine

Perhaps one of the best known online banks is Tangerine. A subsidiary of Scotiabank, Tangerine is one of the original branchless virtual banks in Canada and has amassed a large clientele. The online bank is regularly offering promotions to attract new clients, and once you’re in, you’ll have plenty more great products at your disposal. 

Although Tangerine doesn’t have any physical branches, they do have Tangerine cafes in Toronto, Vancouver, Calgary, and Montreal where clients can chat with staff. There are also more than 3,500 ATMs that clients can access across Canada for free. 

Right now, Tangerine is offering 2.15% interest for 5 months on your first Tangerine Savings Account and $200 when you switch to a daily bank account for a limited time. 

Tangerine offers just about every type of account and product that you’d typically see at a traditional big bank, including the following:

Savings accounts:

  • High-Interest Savings Account: 0.15%
  • Tax-Free Savings Account: 0.15%
  • Retirement Savings Plan: 0.15%
  • US$ Savings Account: 0.15%
  • Retirement Income Fund (RIF) Savings Account: 0.30%
  • Children’s Savings Account (for kids up to age 16): 0.35%
  • Business Savings Accounts: Up to 1.50%

Chequing accounts:

Enjoy zero fees for daily transactions, free Interac e-transfers, overdraft protection, and the following interest rates.

  • $0.00 to $49,999.99: 0.05%
  • $50,000.00 to $99,999.99: 0.10%
  • $100,000 or more: 0.15%

Tangerine Money-Back Credit Cards

Tangerine offers two different credit cards that allow you to earn cash-back rewards on your everyday purchases with no annual fee.

Money-Back Credit Card:
  • No annual fee
  • Earn up to 2% in money-back rewards in up to 3 categories
  • 19.95% APR
World Mastercard:
  • All the benefits of the Money-Back Credit Card
  • Mastercard travel rewards
  • On-demand and subscription services
  • Rental car insurance
  • Mobile device insurance
  • VIP lounge experience

Investment Accounts

Grow your money with a competitive interest rate with investment accounts from Tangerine, including the following:

  • Tax-Free Savings Account (TFSA)
  • Retirement Savings Plan (RSP)
  • Non-Registered Investment Account
  • Retirement Income Fund (RIF)

Loans

Tangerine offers a handful of loan options with low-interest rates:

  • Mortgages
  • Home equity line of credit (HELOC)
  • Line of credit
  • RSP loan

Simplii Financial 

simplii Financial

Formerly operated as PC Financial, Simplii Financial is another popular online bank in Canada that offers plenty of banking products for those who prefer managing their money virtually. Simplii is an online banking subsidiary of CIBC, so clients can access their cash from over 3,400 CIBC bank machines across the country for free.

The online bank is currently offering a promotion that provides new clients with up to $200 when a no-fee chequing account is opened. 

Simplii clients have the following account types available to them:

High-Interest Savings Account

Simplii offers high rates with no minimum balance required and no monthly fees. Every dollar deposited into a High-Interest Savings Account earns 0.30%.

No-Fee Chequing Account

Perhaps Simplii’s most popular product is their no-fee checking account. There are no monthly fees or minimum balance required, and you’ll have unlimited withdrawals, debit purchases, and bill payments, all at no charge. You can also use Interac e-transfer for free, and enjoy no-fee cash withdrawals at one of over 3,400 CIBC bank machines across Canada. And if you still like to use cheques, you can enjoy unlimited cheques for free.

Interest earned will depend on the amount you have in your account:

  • Up to $1,000: 0.05%
  • $1,000.01 to $5,000: 0.10%
  • $5,000.01 and up: 0.15%

Credit Card

The Simplii Financial Cash Back Visa Card is available to Simplii clients and comes with a low 10.99% APR on cash and purchases until February 2021. After that, the purchase APR is 19.99% and cash advance APR is 22.99%.

For the first four months, you can earn a 10% bonus cash back at participating bars and restaurants up to $500 in expenditures. After that, you can earn rewards as follows:

  • 4% cash back at eligible restaurants and coffee shops, up to $5,000 a year
  • 1.5% cash back on eligible grocery, gas station, and drug store purchases up to $15,000 a year
  • 0.5% cash back on all other purchases with no limit on earnings

Loans

Simplii makes borrowing money easy with a variety of loan options:

  • Mortgages
  • RRSP loans
  • Personal loans
  • Line of credit

Investment Accounts

Invest directly with Simplii with registered and non-registered accounts, as well as tax-free savings accounts.

motusbank

motusbank

motusbank is one of the newer online-only banks to arrive in the digital banking sphere. It’s owned by Meridian Credit Union, an Ontario credit union, and is also a CDIC member that insures deposits for security. motusbank’s low-fee banking model passes savings onto clients to help them benefit from higher rates without the pesky monthly or transaction fees that are typical of big banks. Clients can withdraw cash for free at one of 3,700 ATMs across Canada. 

motusbank offers a number of accounts, including the following:

Savings Accounts

motusbank savings accounts come with unlimited withdrawals and debit purchases, no monthly fees, no minimum balance, and automated savings features that let you round up your purchases to the nearest dollar to encourage you to save your extra change.

  • High-interest savings account: 1.55%
  • TFSA savings account: 1.75%
  • RRSP savings account: 1.55%

Chequing Account

Like their savings accounts, Motusbank’s checking account comes with no monthly fees. You’ll earn 0.25% interest on your balance, of which there is no minimum to keep the account open. You can transfer funds through Interac e-transfer for free as many times as you like, and there are no limits on withdrawals, debit purchases, and bill payments. And if you still use paper cheques, you’ll get the first 25 for free. 

Loans and Investment Accounts

motusbank offers fixed and variable mortgages with rates as low as 2.39%, home equity line of credit at a rate of 2.75%, and GICs that payout as much as 1.90%. 

EQ Bank

EQ Bank

EQ Bank is Equitable Bank’s branchless online banking division and offers two types of banking products: savings and GICs. You may have noticed that there are currently no chequing accounts offered, so you won’t be able to do all of your banking at EQ Bank. 

However, these accounts come with some features of a typical chequing account, such as interac e-transfers, bill payments, and international money transfers. Plus, they offer some of the highest interest rates on savings accounts, so they’re definitely worth a look. 

The EQ Bank model is a truly unique one. Along with having no physical branches, there are also no ATMs, either. Instead, EQ Bank is accessible completely through its browser-based and app platforms. Clients can move their money between EQ Bank accounts and other linked accounts entirely online. 

The EQ Bank Savings Plus Account comes with an impressive 1.50% interest rate with no banking fees, no minimum balance, and unlimited transactions. EQ Bank also offers non-registered GIC accounts, with interest rates ranging from 1.50% to 2.70%, depending on the term of your account. 

Outlook Financial

Outlook Financial

Outlook Financial is a branchless arm of Manitoba-based Assiniboine Credit Union. Like EQ Bank, Outlook Financial offers a high-interest savings account and GICs that can also be used through accounts such as RRSPs, TFSAs, or RRIFs. Outlook Financial clients become members of the Assiniboine Credit Union and even have a voice in how the annual profits of the company are distributed. 

The online bank’s high-interest savings account comes with competitively high rates of 1.75%. There are no monthly fees or minimum balances, and you can write cheques and pay bills online like you would with a traditional chequing account. 

Outlook’s GICs offer rates ranging from 1.90% to 2.10%, depending on the term length. You’ll have the option to withdraw your funds early and won’t be subject to any monthly fees. 

Overview of Top Canadian Online Banks

FeatureTangerineSimplii Financialmotusbank EQ BankOutlook Financial 
Savings Account5 types.
Interest ranging from 0.20% to 1.50%
High-Interest Saving Account 0.30% interest rate3 types. Interest up to 1.75%High-Interest Saving Account
1.50% interest rate
High-Interest Saving Account 1.75% interest rate
Chequing AccountYes. Interest up to 0.15%Yes.
Interest up to 0.15%
Yes. Interest up to 0.25%NoNo
Credit CardYesYesNoNoNo
LoansMortgages, HELOCs, Line of credit, RRSP loansMortgages, RRSP loans, Personal loans, Line of creditMortgages & HELOCsNoNo
Investment AccountsTFSA, RRSP, Non-Registered RIFRegistered and Non-registered TFSAsGICsGICsGICs
Promotions2.50% interest for 5 months on first Savings Account.
$200 when switching to a daily bank account
$200 to new clients who open a no-fee chequing accountNo current promotionsNo current promotionsNo current promotions

Are Online Banks Safe?

Considering the sensitivity of the information floating around in cyberspace, it’s understandable that some consumers might be a little hesitant to do all of their banking online. However, the banks that have been listed above are all associated with credible and long-standing banks and credit unions in Canada. Deposits (up to $100,000) made are insured by the Canada Deposit Insurance Corporation (CDIC) in the event that anyone of these banks goes under. 

These banks also use encryption to protect your data, and security breaches are unlikely. That said, it’s always wise to choose a strong password to make hacking nearly impossible.

Pros and Cons of Online Banks

Should you switch to an online bank? Before you do, it’s important to understand both the perks and drawbacks of these types of financial institutions.

Pros:

  • Convenience. Perhaps the biggest benefit of an online bank is the convenience it offers. There’s no need to physically make your way over to your bank and speak with a teller in person. Instead, all your banking can be done from the comfort of your home. That includes applying for loans, like mortgages and personal loans. Simply apply and get approved all from your computer.
  • Accessibility. Since you’re not at the mercy of a bank branch’s hours of operation, you can do your banking around the clock, 24 hours a day, 7 days a week. Plus, there’s no need to line up behind anyone or try to fit in your banking with your busy schedule. 
  • Products. As you can see from the above list of online banks, many offer all the products that you would normally find at your average bank. That includes savings accounts, chequing accounts, investment accounts, loan products, and credit cards. 
  • Low fees. Since there is virtually no overhead with online banks, they can pass those savings on to you in the form of low fees and higher interest rates. 

Cons:

  • No in-person service. While this might suit many consumers just fine, some are still more comfortable speaking directly with a bank teller in person. 
  • No safety deposit boxes. If you use the banks to keep your valuables safe, you won’t get that type of service with an online bank. 

Should You Use an Online Bank?

At the end of the day, your decision to use an online-only bank comes down to your preferences. That said, if you like the idea of having 24/7 access to banking, appreciate low fees, and are comfortable doing all of your banking online, there’s little reason not to use these platforms. They’re safe, convenient, and offer superior customer service that you would expect from a bank. If you do decide to take the online-only bank route, be sure to choose a bank that offers the full suite of accounts and services that suit your needs.