The 5 best online banks in Canada: a complete guide

Ranging from savings and checking to mortgages and investments, the best online banks in Canada have many unique offerings in store for you. Learn more about their rates, fees, and safety measures.

Xe Consumer North America

November 11, 2020 15 min read

Woman checking her online bank in Toronto, Canada

In 2020, you can handle day-to-day tasks like your shopping, your schooling, and even your job completely online. With the rise of online banks, you can add your finances to that list. Unlike traditional banks that include online banking options, online banks (also known as “digital banks”, “neobanks”, or “direct banks”) usually don’t have any brick-and-mortar branches. This means they can leave out any branch maintenance expenses, leading to low fees (and sometimes, no fees, hallelujah!).

Some traditional banks also have an online presence nowadays, but they differ from online banks, nonetheless. That’s because digital banks provide online banking products primarily via the Internet. You may also find a few Canadian online banks having a handful of branches, but they function mainly online. These banks also offer better High-Interest Savings Account (HISA) rates than traditional brick-and-mortar banks in Canada do. Considering these and several other perks, we’ve listed out the 5 best online banks in Canada for you (further below).

How to open an online bank account in Canada

To open a bank account at any of the best online banks in Canada, you must:

  • Be a Canadian resident

  • Have reached your territory or province’s age of majority

  • Provide your valid Canadian address and contact details

  • Provide your Social Insurance Number (SIN)

  • Some Canadian online banks may also ask for your digital signature

If you face any problems while opening an online bank account, contact the bank via live chat, phone, email, or social media. Now, let’s pay attention to the 5 best online banks Canada has, with their banking products, rates, fees, and how safe they are.

What are the best online banks in Canada?

  1. Tangerine Bank

  2. Simplii Financial

  3. Alterna Bank

  4. EQ Bank

  5. Manulife Bank

1. Tangerine Bank

Back in 1997, ING Group founded a bank named “ING Direct Canada”. Fast-forward to 2012, and Scotiabank acquired ING Direct, rebranding it as “Tangerine Bank” in 2014.

Tangerine Bank is now one of Canada’s top digital banks. With savings accounts, checking (or chequing) accounts, mortgages, credit cards, business accounts, investment funds, Guaranteed Investment Certificates (GICs), and more, Tangerine sure has plenty of products lined up!

If you’ve got any queries about online banking, reach out to them by live chat, phone, social media, or mail.

Tangerine Cafés are also available in Toronto, Montreal, or Vancouver (but currently, all the cafés are closed due to the pandemic).

Tangerine savings accounts

Tangerine Bank offers 5 different savings accounts:

  • High-interest savings account

  • US$ savings account

  • Tax-Free Savings Account (TFSA)

  • Retirement Income Fund (RIF) savings account

  • Retirement Savings Plan (RSP) account

After opening your first savings account here, you’ll qualify for a 2.15% interest for the first 5 months. Besides, there are no minimum balance requirements and no monthly maintenance or service fees.

The bank’s website also features a savings calculator that lets you check when you can reach your savings goal (like saving up for a trip or a new home).

You can even move money directly to your Tangerine savings account using their Automatic Savings Program (ASP).

Tangerine checking accounts

With Tangerine’s no-fee checking, you’ll get everything you’re looking for in a checking account, including unlimited free daily checking transactions, no monthly fees, and free cheques (the first book with 50 cheques). Every additional cheque book costs $50 CAD.

The same promotion for Tangerine savings accounts (2.15% interest for the first 5 months) also applies to their checking accounts, if you open one for the first time.

Plus, you’ll earn the following interest rates on your checking account balance:*

  • 0.05% on $0 CAD - $49,999.99 CAD

  • 0.10% on $50,000 CAD - $99,999.99

  • 0.15% on $100,000 CAD or more

Tangerine also offers a Visa Debit card, which you can use to pay money from your checking account.

Watch out for their free Interac e-transfers, free access to 3,500 Scotiabank Automated Banking Machines (ABMs), and 44,000 Scotiabank-partnered ABMs worldwide, and the $1.50 CAD fee for ABM withdrawals in Canada outside the Tangerine or Scotiabank networks.

Tangerine credit card

The bank offers 2 types of credit cards:

  • Money-Back credit card
    The no-fee Tangerine Money-Back credit card offers 2% cash-back rewards on up to 2 categories of your daily purchases (including groceries, furniture, gas, restaurants, and public transport), along with 0.50% cash-back rewards on your other purchases—an easy way to maximize your budget, eh?

    There’s no limit to the amount of cash-back rewards you can earn, either.

    Once you automatically earn the rewards, the online bank redeems them into your savings account or adds them to your credit card balance. 

  • World Mastercard
    Like the Money-Back credit card, Tangerine’s World Mastercard also offers 2% cash-back without any annual fees.

    What’s more, it comes with several extra perks, including access to more than 1 million Wi-Fi hotspots worldwide with Boingo Wi-Fi, theft and damage protection for your car rental, and mobile device insurance. What’s not to love?

Rates*: Up to 0.15% on checking accounts and nearly all tiers of saving accounts (0.20% on RIF savings accounts).
Fees*: $45 CAD for Non-Sufficient Funds (NSFs), $10 CAD for Canadian drafts, $1.50 CAD for non-Tangerine or non-Scotiabank ABM withdrawals in Canada, $3 CAD for non-Scotiabank ABM withdrawals outside Canada, and a currency conversion fee of 2.50% plus the exchange rate.
Best for: Overall online banking services and perks in Canada.

2. Simplii Financial

When customers of the President’s Choice (PC) Financial had to move to the Canadian Imperial Bank of Commerce (CIBC), Simplii Financial was founded as CIBC’s direct banking arm in 2017.

They’re the newest kid in the block (on this list), but they still give you access to savings, no-fee checking, investments, credit cards, mortgages, and more. They don’t extend their online services to Quebec, though.

Simplii high-interest savings account

This account has no monthly or transaction fees, no minimum deposit requirements, and offers a standard 0.15% interest rate.

You can also choose to keep your money in a TFSA or a Registered RSP (RRSP) savings account at the same interest rate.

Simplii checking account

Their no-fee checking account is a lot like Tangerine’s, with unlimited transactions and free Interac e-transfers.

You can set up automatic direct pension and payroll deposits, with bill payments. The interest rates on your checking account balance are as follows:

  • 0.05% on amounts up to $1,000 CAD

  • 0.10% on more than $1,000 CAD

Simplii also lets you access more than 3,400 CIBC ATMs across the country for free.

And just in case you come across unexpected expenses, you can add overdraft protection up to $5,000 CAD to your checking account. There’s a 19% interest rate on all overdraft balances as well.

Simplii Financial Cash Back Visa card

You can get all the benefits of Simplii’s credit card, like buying groceries and dining at restaurants, with no annual fee.

A major perk is that Simplii not only allows you to set spending limits, but also lets you add up to 3 additional cardholders.

Until February 2021, the online bank has reduced the annual interest rate on cash advances and purchases to 10.99%. After this period, the cash interest rate will be 22.99%, and the purchase interest rate will be 19.99%.

So, on signing up for this card, you’ll earn 1.5% return on eligible groceries, drugstore, and gas purchases (up to $15,000 CAD per year), 4% return on eligible bar, coffee shop, and restaurant purchases (up to $5,000 CAD spent per year), and 0.5% cash-back on everything else.

To become eligible for holding a Simplii credit card, though, your minimum annual household income should be $15,000 CAD, and you need to be a Canadian resident (excluding Quebec) as well as a Simplii Financial client.

Rates*: 0.05%-0.10% on checking accounts, 0.15% on savings account, and 19%
annual overdraft interest rate.
Fees*: No monthly fees.
Best for: Easy access to your money online.

3. Alterna Bank

Another of the best online banks in Canada, Alterna Bank functions as the direct banking arm of Alterna Savings Credit Union, based in Ontario.

Apart from checking and savings accounts, they offer mortgage loans, term deposits for both registered and non-registered accounts, and online investments. You can contact them for queries by email, phone, and mail.

Alterna Bank savings accounts

At Alterna, you can open 3 types of savings accounts:

  • High-Interest e-savings

  • Registered Retirement Savings Plan (RRSP)

  • TFSAs

All of these accounts offer the same great savings rate (1.20%). Apart from that, you’ll get free unlimited Interac e-transfers, debits, and bill payments.

You can also check your balance and deposit checks easily via your mobile device. There aren’t any minimum balance requirements, either, which is great if you’re just getting started with one of the best online banks in Canada.

Alterna Bank no-fee e-checking account

Even though this account allows free unlimited daily transactions and Interac e-transfers (and, of course, charges no monthly account fees, as its name suggests), the interest rate (0.05%) isn’t impressive.

Alterna’s checking account also lets you access more than 3,300 surcharge-free ATMs via THE EXCHANGE Network, as well as 40,000 surcharge-free Allpoint ATMs across then United States.

You can also add overdraft protection to your account for a $2.50 CAD monthly fee.

Rates*: 1.20% on all tiers of savings and 0.05% on e-checking.
Fees*: No monthly fees on savings and checking, and $2.50 CAD overdraft
protection fee.
Best for: Canadians seeking an online credit union.

4. EQ Bank

A leading neobank in Canada, EQ Bank was founded as the online arm of Equitable Bank in 2016.

Right now, they offer only 2 banking products, both of which stand out for having some of the highest interest rates in Canada.

The only downside is that you won’t get a checking account, a debit card, or a credit card at EQ Bank, so this might not be a one-stop shop for all your banking needs.

EQ Bank Savings Plus Account

You don’t need to hold a minimum balance or pay any monthly fees at this bank’s high-interest savings account.

Plus, you can make unlimited free transactions, free bill payments, mobile cheque deposits, and free Interac e-transfers (even though it’s a savings account, you heard it right!), all while earning a standard 1.50% interest rate.

However, the maximum balance they’ll require you to hold is $200,000 CAD per customer. This account doesn’t provide a debit card, too.

EQ Bank Joint Savings Plus Accounts

With these accounts, you can hold a high-interest savings account with up to 3 other people.

Most of the features of the joint accounts are similar to those offered by the individual Savings Plus Account. The only difference is that each joint account customer can hold a maximum balance of $500,000 CAD.

You can also convert your existing individual savings account into a joint account in just a few clicks.

Rates*: 1.50% on all savings accounts and 1.70%-2.00% on Guaranteed Investment Certificates (GICs).
Fees*: No monthly fees.
Best for: Savers who want to enjoy the perks of a checking account without actually having one.

5. Manulife Bank

Including bank accounts, loans, investments, mortgages, and credit cards, Manulife Bank is among the best online banks in Canada, that provides a little bit of everything, bundled into some quirky offerings.

Small business owners in Canada can also take advantage of Manulife Bank’s business bank accounts. 

Manulife savings accounts

This digital banking platform offers 3 types of savings accounts:

  • Advantage Account

  • TFSA

  • US$ Advantage Account

The Advantage Account is a combined savings and checking account that offers a 0.15% interest rate. Though this account has no monthly fees, you’ll still need to pay transaction fees - unless you have at least $1,000 CAD in your account.

But what happens if you don’t? You’ll have to pay $1 CAD each for Interac e-transfers and debit card purchases, while ATM withdrawals in Canada will cost you $1.50 CAD.

Your debit card will also give you access to more than 3,500 ATMs across Canada.

As for the US$ Advantage Account, you can earn 0.20% interest on your US money, without paying any monthly fees.

But you can’t withdraw money directly from this account. Instead, you’ll have to transfer money to your US$ account at another Canadian bank, either online or via mobile banking.

Manulife’s All-In Banking Package

If you’re looking for a fantastic bundle that’s got an everyday banking account with a 0.15% interest savings account (and all the perks that come with it), travel disruption insurance, and overdraft protection, Manulife’s All-In Banking Package is the bee’s knees.

There aren’t any annual fees, and you’ll get a 15% annual interest rate. The initial credit limit is 75% of your savings account balance, up to a maximum amount of $5,000 CAD.

Manulife credit cards

Manulife Bank offers the following 2 types of credit cards:

  • ManulifeMONEY+ Visa Platinum
    This card doesn’t have any annual fees. As a welcome bonus, you’ll get 5% cash-back on the 1st $2,000 CAD you spend on groceries for the first 3 months.

    After these 3 months, you’ll earn 2% cash-back on the first $15,000 CAD on groceries per year. When you buy anything else, you’ll get a flat 1% cash-back.

  • ManulifeMONEY+ Visa Infinite
    As soon as you sign up for this card for the first time, you’ll get a welcome bonus of 10% cash-back on the first $2,500 CAD on groceries for the first 3 months.

    After that, you’ll earn 3% cash-back on groceries and 2% cash-back on travel (if you spend up to $25,000 CAD on each). Everything else will earn you 1% cash-back.

    However, you can become eligible for the Visa Infinite card only if your minimum personal income is $60,000 CAD or your minimum household income is $100,000 CAD.

Rates*: 0.15% on Advantage Accounts and TFSAs, 0.20% on US$ Advantage Accounts, and 15% on the All-In Banking Package.
Fees*: No monthly fees on any savings account, and $10 CAD for the All-In Banking Package (unless you save $100 CAD every month).
Best for: Canadians looking for unique online banking products.

How to choose one of the best online banks in Canada

Your choice of a Canadian online bank would depend on your banking needs.

For example, if you want to take advantage of the better savings rates online banks offer, EQ Bank’s high-interest Savings Plus account, which provides unlimited free Interac e-transfers, would be a good choice.

But if you wish to replace your current bank entirely with a digital bank (moving your savings, checking, investments, mortgage, and more), you can go with either Simplii Financial or Tangerine Bank.

Compare the fees, rates, and products offered by each of the best online banks in Canada and choose the one you think is best.*

  • Savings Accounts

    • Tangerine Bank - 5 types

    • Simplii Financial - 1 type

    • Alterna Bank - 3 types

    • EQ Bank - 1 type

    • Manulife Bank - 2 types

  • Checking Accounts

    • Tangerine Bank - 1 type

    • Simplii Financial - 1 type

    • Alterna Bank - 1 type

    • EQ Bank - None

    • Manulife Bank - 1 type

  • TFSA

    • Tangerine Bank - Yes

    • Simplii Financial - Yes

    • Alterna Bank - Yes

    • EQ Bank - None

    • Manulife Bank - Yes

  • Interac E-Transfer Charges

    • Tangerine Bank - Free and unlimited

    • Simplii Financial - Free and unlimited (on checking accounts)

    • Alterna Bank - Free and unlimited

    • EQ Bank - Free and unlimited

    • Manulife Bank - Free and unlimited

  • Minimum Balance

    • Tangerine Bank - None

    • Simplii Financial - None

    • Alterna Bank - None

    • EQ Bank - None

    • Manulife Bank - $100 CAD or more

  • Monthly Fees

    • Tangerine Bank - None

    • Simplii Financial - None

    • Alterna Bank - None

    • EQ Bank - None

    • Manulife Bank - $10 CAD

  • Minimum Balance to Waive Monthly Fees

    • Tangerine Bank - N/A

    • Simplii Financial - N/A

    • Alterna Bank - N/A

    • EQ Bank - N/A

    • Manulife Bank - $100 CAD more than the balance on the last day of the previous month

  • HISA Rates

    • Tangerine Bank - 0.15%

    • Simplii Financial - 0.15%

    • Alterna Bank - 1.2%

    • EQ Bank - 1.50%

    • Manulife Bank - 0.15%

  • Promotions

    • Tangerine Bank - 2.15% interest on new savings accounts for first 5 months

    • Simplii Financial - 2% interest on eligible deposits until March 2021

    • Alterna Bank - None

    • EQ Bank - None

    • Manulife Bank - Free year of Amazon Prime

  • Physical Branches

    • Tangerine Bank - None

    • Simplii Financial - None

    • Alterna Bank - Yes

    • EQ Bank - None

    • Manulife Bank - None

Are online banks safe in Canada?

Just like the Federal Deposit Insurance Corporation (FDIC) insures deposits in digital banks in the US, each of the best online banks in Canada that we’ve listed above is insured by the Canada Deposit Insurance Corporation (CDIC).

In case of an online bank failure, CDIC insures your deposits held at the bank up to $100,000 CAD.

This insurance covers eligible deposits in your own name, Tax-Free Savings Accounts (TFSAs), trust accounts, Registered Retirement Savings Plans (RRSPs), joint accounts, and more.

However, it doesn’t apply to your stocks, mutual funds, bonds, and other investment products.

Coming to online credit unions in Canada, your deposits with them are either 100% guaranteed by the Deposit Guarantee Corporation of Manitoba (DGCM), or are covered by CDIC (like Alterna Bank is). So, online banks and credit unions in Canada are quite safe, no worries!

Final thoughts

All the best online banks in Canada that we’ve listed above offer different types of banking products, ranging from savings and checking to investments and mortgage loans.

Besides, each of them is a member of CDIC, so you’ve got nothing to worry about.

In case you’re thinking of moving your money from one online bank to another, the Xe app and website let you convert currencies for free, while making international money transfers from Canada a breeze. Download the app or sign up today!

* Note: The APY, fees  and rates stated above are as of November 9, 2020, and may change without notice by each operator at any time.