Our Picks: Canada’s 8 Best Online Banks
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Choosing the right bank can be difficult and with the advancement of technology and mobile devices, there are even more options than ever before. With online banking, you can access your account from anywhere without waiting in lines or finding a location.
How can you choose the right online bank for you? First, you must ask yourself how can I keep my money safe and secure while still having access to the services and benefits of a traditional bank.
In this guide, we will lay out some of the top online bank accounts in Canada as well as the services and benefits they provide.
Why an online bank might be right for you
Online banking has grown rapidly in the last few years as customers realize the benefit of online banking. As of 2022 Canadian bankers association showed that over 75% of Canadians had an online bank account, but what are the benefits?
- Banking on the go: One of the top reasons to open an online bank account is convenience. Online banks operate through websites and apps making it so that people can conduct their banking while on the go making sure that they don’t miss payments and can manage their accounts in real-time. These apps are also designed with automated message assistants and direct contact to tellers if the issue is too complicated to be solved by the automated system.
- Lower costs and Fees: Many large banks still charge fees for standard accounts and services. Statistics Canada found that the average Canadian pays over $200 per year in banking fees. These fees range include chequing account fees, ATM fees, foreign transaction fees, Non-sufficient funds fees, overdraft fees and more. Many online banks charge $0 in account fees and have no minimum balance. They also partner with major ATM branches so account holders can have access to cash as well.
- Security: One of the biggest concerns of online banking is security, but rest assured online banking is just as protected as traditional banks. Canada Deposit Insurance Corporation CDIC and Credit Union Deposit Guarantee Corporation protect online Canadian banking. CDIC guarantees coverage of up to $100,000 per account.
What are Canada's Top 8 Online Banks?
Now as with choosing a bank customers should do their research before choosing an online bank. Just like traditional banks, online banks may vary in the services, costs, fees and customer support they provide. Below, we have summarized some of the top Canadian online banks in 2024.
Neo Financial
Neo Financial is an entirely online bank that was created in 2019. Neo offers a number of account options as well as multiple credit card options. Neo’s credit cards are issued by ATB Financial and backed by Mastercard. Their savings account is supported by Concentra bank a member of CDIC protecting users' deposits.
Neo offers all the standard account types such as a high-interest savings account that boasts a savings rate of 1.45% with free Interac e-transfers and free bill payments. They also offer RRSP, TFSA and personal accounts.
Neo Financial offers two Neo credit card options:
- Neo Financial Master Card: Cashback card with 6% back at Neo partners, no annual or inactivity fees and requires only a 600 credit score to be eligible.
- Neo Financial Master card has a free basic plan but can be upgraded to a plus plan for $2.99 a month or an ultra plan for $8.99 a month. These increase Neo’s cashback amount.
- Neo Hudson’s Bay Mastercard: Neo bay card or Neo HBC is a points rewards card. They offer 4 points for every dollar spent in-store or at thebay.com, 2 points for every dollar spent elsewhere and 2% cashback at all Neo partners.
Neo Financial's biggest strengths are its high cashback rate, high savings account yield and no annual fees or account minimums. Neo’s biggest weakness is that customers have to shop at Neo partners to earn the most cash back.
Tangerine
Tangerine is an online banking subsidiary of Scotiabank founded in 1997. It is a purely online banking service but its relationship with Scotiabank makes it one of the best online chequing accounts. As of June 2014, Tangerine Chequing Account holders can use any of Scotiabank's 4,000 ATMs in Canada and 44,000 worldwide without paying any fees.
Tangerine doesn’t charge any banking fees and offers credit cards, mortgages, chequing accounts, savings accounts, and investment options. They also have no minimum account balance requirements.
Tangerine offers two credit card options:
- Tangerine World Mastercard: has no annual fee and rewards up to 2% cashback. It also has travel perks such as travel rewards, subscription services, rental car insurance, mobile device insurance and airport experience provided by Loungekey.
- Tangerine Money-Back Credit card: Has no annual fee and rewards up to 2% back.
Tangerine is an overall top online bank. Their relationship with Scotiabank gives them all the same securities and Canadian government backing as a traditional bank while they maintain the flexibility and convenience of an online bank. The one drawback is that they charge fees on third-party ATMs and do not provide personal or car loans.
Simplii Financial
Simplii Financial is the online banking division of the Canadian Imperial Bank of Commerce CIBC. Like Tangerine, this relationship gives Simplii added security and benefits for its customers as well as access to 3400 CBIC ATMs across Canada. Simplii advertises itself as “Banking that’s simplified” and in many ways that's accurate.
Simplii offers a top no-fee chequing account with no monthly fee, and no minimum balance and you can send money for free with Interac e-Transfer. They also offer free unlimited debit purchases, bill payments and withdrawals. Simplii also offers both a CA$ and a USD$ high-interest savings account as well as RRSP, TFSA and non-registered investment accounts.
Simplii Finacial cash back visa card is their only current credit card option but it comes with an introductory deal of 10% cashback for the first four months and 4% cash back after that.
Simplii offers a very straightforward and secure online banking platform as well low to no-cost option. One thing that caught my eye is their USD$ savings account. This account is especially interesting as it allows account holders to send money to over 130 countries as well as transfer funds to and from users' CAD savings accounts at lower rates and fees than most banks.
EQ Bank
EQ Bank is the online branch of Equitable Bank. EQ Bank has the highest interest rate on our list at 1.5%. They have also created what's considered a hybrid chequing/savings account which gives account holders the benefits of a savings account while maintaining the access and freedom of a chequing account. They also offer no monthly payments, no minimum balance, free bill payments and free Interac e-transfers.
EQ bank advertises RSP and TFSA savings account with their 1.5% interest rate and investing support. Like Simplii Financial, EQ Bank has a USD account with a 1.25% return, no monthly fees and competitive exchange rates.
While EQ Bank doesn’t offer its own credit card they have set up its platform to work well with others. EQ savings account holders can easily link credit cards to their accounts and set up automatic payments or pay them manually through the EQ website or app.
Manulife Bank
Manulife Bank is a subsidiary of The Manufacturers Life Insurance Company created in 1993. They offer all the same services such as chequing, savings, loans and investment accounts. They have no monthly fees but require a minimum account balance of $1,000 to avoid fees and a 0.15% interest rate on their savings account. Users have access to 3500 free ATMs across Canada using The Exchange Network.
Manulife Bank offers CGIs, mutual funds and ETFs for their investment options. They also offer RRSP, TFSA, RRIF and non-registered investment accounts. This makes it one of the stronger online investment banks.
Manulife Bank offers the Manulife MONEY+ Visa Infinite card which has travel benefits and cashback rewards. The card has 1.99% cashback for balance transfers on the first 6 months, 3% cashback on groceries, 2% cashback on travel and 1% cashback on all other purchases. One of the best perks is extensive travel insurance protection. This card also has a $120 annual fee which is waived for the first year.
Motusbank
Last on our list of online banks is Motusbank an online bank owned by Meridian Credit Union. Motusbank offers all the account options expected in an online bank. They have no monthly fee chequing and savings accounts as well as a 2.75% interest rate during the promotion which drops to a 1.5% interest rate on their savings accounts.
They provide mortgages, and loans and they offer GICs and support TFSA, RRSP and non-registered investment accounts. Users have access to 3,700 free ATMs across Canada through The Exchange Network. Currently, they do not offer a credit card.
Alternative Financial Options
These last two are not officially banks but are Canadian financial institutions. They offer many of the same products and services that online and traditional banks do as well as investing options.
Wealthsimple
While Wealthsimple isn’t technically a bank, they offer many of the same financial products and services. Wealthsimple offers a hybrid savings/chequing account Wealthsimple Cash, business accounts, investing accounts, RRSP, TFSA, RESP and RRIF accounts. Wealthsimple also offers self-directed trading and cryptocurrency trading.
Wealthsimple has no account minimums and no trading commission but they do charge management fees on their accounts ranging from 0.25% to 0.5% as well as other fees.
Please refer to the chart below:
| Weathsimple Products | Associated Fees and Costs |
|---|---|
| Wealthsimple Invest yearly Account Management Fee | 0.5% fee for accounts less than $100,000 and 0.4% on accounts over $100,000 |
| Investment Expense Ratios | Between 0.09% and 0.11% on Standard Portfolios Between 0.13% and 0.14% on SRI Portfolios |
| Savings or Cash management account (this account is optional) | 0.25% Management fee |
| Wealthsimple Trade Conversion Fee | Wealthsimple charges a 1.5% currency conversion fee to convert between USD and CAD |
| Wealthsimple Crypto Trade Fee | Wealthsimple charges a 1.5% fee for crypto transactions |
| Wire Transfer Fee | $30 |
| Wealthsimple TSFA Fees | No TSFA fees when trading Candian assets but a 1.5% on US assets. |
| Wealthsimple ETF Fees | No ETF fees when trading Canadian ETFs but a 1.5% on other ETFs. |
| Wealthsimple Stock Trading Fees | No fees on Candian Stock and EFT transactions |
Wealthsimple stands out as a trading platform with more options for investing than some of the online banks on this list. They don’t have a credit card but have the Wealthsimple Card which acts as a debit card linked to the user's cash account. This card may charge conversion fees for purchases made in a currency other than CAD and atm withdrawal fees.
Koho
Koho is a Canadian financial company based in Toronto. Koho Financial Inc, like Wealthsimple, is not a bank but provides banking services and products. Koho provides a no-fee chequing account and a savings account with a 0.5% interest rate.
Koho has three account options:
- Koho has 0.5% cashback, no account fees and full app support.
- Koho joint account has 0.5% cashback, no account fees, financial sharing, partner spending notifications and full app support.
- Koho Premium has 2% cashback, $84 annual fee or $9 per month, financial coaching and one free international atm withdrawal per month.
Like Wealthsimple, there is technically no Koho credit card. Instead, they have a Koho prepaid Mastercard which acts as a debit card linked to the user's Koho account. While the Koho prepaid Mastercard doesn’t have the same spending limits as a credit card it does protect users from overdraft fees and non-sufficient fund fees. Users can also become Koho Premium subscribers to receive 2% cash back on groceries, transportation and eating out.
Koho Financial is also known for their credit building service designed to increase users’ credit scores. It costs $7 per month and users will receive a no-fee no interest credit-building line of credit. Users then make repayments to the line of credit as they spend building their credit history through natural spending and improving their credit score.
