Do you remember the time when banking meant waiting in line at a physical branch just to deposit a cheque or transfer money? The hassle was unreal back then.
Now you can handle all your banking needs anytime, anywhere, right from your phone or computer. But with so many online banks popping up, how do you choose the best one for you?
Let’s explore the top 5 online banks in Canada, learn how online banks can save you money, offer better rates, and bring banking convenience straight to your fingertips.
An intro to online banks
Online banks, also known as digital banks or neobanks, are financial institutions that operate primarily online. Their services, similar to those of traditional banks, include checking and savings accounts, loans, and investment options, all of which are accessible through mobile apps and websites.
Since digital banks do not maintain physical branches, they have lower overhead costs, which allows them to offer competitive interest rates and affordable fees for customers.
Online banks comply with banking regulations to obtain necessary licenses and maintain the integrity and security of their operations. With an online bank, you can open an account and do transactions 24/7 via internet-connected devices.
Difference between online & traditional banks
The key difference between an online bank and a traditional bank is their presence. Traditional banks or direct banks have brick-and-mortar branches.
Even though conventional banks now offer online banking options, most clients still need to visit a branch to process transactions such as opening a bank account, cashing a cheque, or applying for a loan.
Benefits of online-only banks
In 2023, according to the FIDC, over 60% of US account holders banked online, and in Canada, 47% of users, mainly young adults, now use online banking as their primary method.
Online banking is growing at a steady pace due to several perks it offers:
Better rates, lower fees
Since online banks have lower overhead costs, they pass their savings on to customers through reduced fees and higher interest rates.
Convenience and accessibility
Digital bank accounts allow you to access your funds anytime through mobile apps and online websites. You can manage accounts, transfer money, pay bills, or apply for loans, with instant activity notifications.
Automation features
Online banks let you automate monthly bill payments to avoid missed due dates. You can schedule payments for utilities, credit cards, and even automate your savings.
Top 5 online banks in Canada
If you want to open a bank account, specifically an online bank, here are the top Canadian online banks you can consider:
Tangerine Bank (A Scotiabank Subsidiary)
Tangerine is a well-established online bank known for its simplicity and value. It offers chequing and savings accounts with no monthly maintenance fees, making banking affordable and accessible.
Its standard savings account provides a base interest rate of 0.30%, while new accounts or new deposits are eligible for a promotional 4.50% interest rate for the first five months. For chequing accounts, tiered interest rates apply, with balances over $100,000 earning up to 0.10%.
Tangerine offers credit cards that provide unlimited 2% cashback on eligible purchases, giving customers a way to earn rewards effortlessly. Account holders enjoy complimentary access to Scotiabank’s extensive network of ATMs across Canada.
Beyond basic banking, Tangerine offers a comprehensive suite of investment products, including:
- Tax-Free Savings Accounts (TFSAs)
- Guaranteed Investment Certificates (GICs)
- Registered Retirement Savings Plans (RRSPs)
This makes it a solid option for both everyday banking and long-term wealth management.
EQ Bank (Equitable Bank)
EQ Bank focuses on high-interest savings with no hidden fees. Its personal savings account offers a competitive base interest rate of 1.25%, which can increase up to 4.00% with direct deposits to encourage regular saving.
The notice savings account pays 3.00% interest but requires a 30-day withdrawal notice, making it ideal for savers who can keep their funds untouched for a while.
While EQ Bank does not provide debit cards or ATM access, it supports essential digital banking functions such as bill payments and unlimited INTERAC e-Transfers, making money management convenient and straightforward.
EQ Bank also offers a range of registered accounts, including RRSPs, TFSAs, and GICs, allowing users to earn interest while maximizing tax advantages.
Koho
Koho appeals to users seeking a digital banking experience centered on budgeting and credit building. Its prepaid Mastercard comes with tiered interest rates depending on the subscription plan:
- 2.5% for the Essential Plan
- 3.5% for the Extra Plan
- 4.0% for the Everything Plan
This makes it an excellent option for those looking to earn interest on their spending balance.
Koho offers unlimited free e-transfers and zero-interest overdraft protection, making financial management easier. Its app provides robust budgeting tools that help customers track spending patterns and set savings goals.
Additionally, Koho includes credit-building tools that report user activity to credit bureaus, which can help improve credit scores over time. Joint accounts and flexible subscription options add to its appeal for families or users with specific needs.
Neo Financial
Neo Financial stands out with its attractive cashback rewards and high-interest savings. Its savings account pays 2.50%, which is above the average for online banks, while its Neo Money prepaid Mastercard offers instant 1% cash back on gas and grocery purchases.
For credit card users, Neo Financial provides the Neo Secured Mastercard (with a $5 CAD monthly fee) that doesn’t require a credit score, making it accessible to many.
For higher spenders, the Neo World Elite credit card carries an annual fee of CAD 125. Still, it offers premium rewards:
- 5% cash back on groceries
- 3% on gas, and 1% on all other purchases.
- 4% on recurring payments such as subscriptions
Neo also supports investment accounts such as RRSPs, TFSAs, and GICs, enabling users to combine spending rewards with saving and investing.
Simplii Financial (A CIBC Digital Bank)
Simplii Financial is CIBC’s digital banking arm, offering a full range of banking and investment services without monthly fees.
Its high-interest savings account currently offers up to 3.70% interest for new clients opening accounts between April 1 and June 30, 2025, making it highly competitive for short-term savers. The TFSA savings account earns 0.40%.
For investment purposes, Simplii offers:
- Tax-Free Savings Accounts (TFSAs)
- Guaranteed Investment Certificates (GICs)
- Registered Retirement Savings Plans (RRSPs)
Account holders can also open USD and other foreign currency savings accounts. Simplii offers three types of loan products, including personal loans, providing borrowers with flexibility.
With no fees and strong backing from CIBC, Simplii Financial offers convenience, variety, and competitive rates for digital banking customers.
Top 5 online banks in Canada: fees, interest rates, and features
Here is a detailed comparison between the fees, interest rates, and features of the top 5 online banks in Canada:
| Tangerine | EQ Bank | Koho | Neo Financial | Simplii Financial | |
|---|---|---|---|---|---|
| Monthly Fee | 0 CAD | 0 CAD | 4 CAD | 0 CAD | 0 CAD |
| Free International ATM Access | Yes | No | No | Yes | No |
| International Transaction Fee | 2.50% | N/A | Depends on plan | 2.50% | 2.50% |
| International Transfer Fee | 0.35% to 3.6% | 0.35% to 3.6% | N/A | N/A | 0.35% to 3.6% |
| Deposit Options | EFT, cash, cheque, debit/credit card | EFT, cash, cheque | EFT, PayPal, Stripe | EFT, Interac e-Transfer | EFT, cash, cheque, debit/credit card |
| CIDC Deposit Insurance | 100,000 CAD | 100,000 CAD | 100,000 CAD | 100,000 CAD | 100,000 CAD |
How to choose the right online bank for your needs?
Here are some factors to consider when choosing the right Canadian online bank for you:
Your banking habits
When opening an online bank, you are either into saving, spending, or both. Depending on your habits and purpose, it is best to choose a digital bank that offers more perks in line with your specific banking needs. For example, you can look into their features, fees, and interest rates.
If your work pays you in cash, you can also consider an online bank that allows you to make cash deposits and access surcharge-free ATMS across the country. It is also advisable to select an online bank that offers reimbursements for out-of-network ATM transactions in case you need to use a machine from another bank.
Interest rates, fees, and product offerings
One of the advantages of using online banks is their high-interest-rate savings accounts.
To maximize your savings and earn more, it's best to choose an online bank that offers higher interest rates and has either zero or low monthly maintenance fees.
It also doesn't hurt to check if your preferred online bank offers other products, such as a budget tracker.
Compatibility with budgeting apps or credit-building tools
Online banks are also a valuable financial platform for customers to learn how to manage their finances wisely and establish a good credit history.
When you choose a digital bank with a credit-building feature, your spending will be reported to credit bureaus, which can help improve your credit score.
Customer service
You can make a mistake with an online banking transaction, or you may have questions about a digital bank’s products and services.
Since online banks do not have physical branches that you can visit, it is best to choose a digital bank that offers 24/7 customer service and can assist you should you have questions or suggestions about your transactions.
Online banks can use AI and human customer service representatives to provide you with timely assistance.
Drawbacks and considerations
Here are some challenges you may face when you have an online bank and do financial transactions using it:
Lack of in-person interactions
Online banks limit personal relationships and in-person services. In-person interactions with bank officers can help you learn or avail yourself of tailored banking services for your specific needs.
With a blend of online banking and day-to-day in-person transactions, you can have multiple options when acquiring banking advice or assistance.
Learning curve for new users
Not everyone is tech-savvy, and navigating online banking can be intimidating, particularly for older adults or individuals without access to digital education.
Mobile app interfaces, unfamiliar icons, unclear instructions, and frequent updates that alter the functionality of online banking apps can make it more difficult for some users to use online banking tools and apps.
Possible tech barriers
Online banking relies heavily on technology. However, if technology fails, your transactions can also be difficult to pass.
Server outages, system maintenance issues, software bugs, and slow internet connections can make it challenging for you to access your online banking account, especially during emergencies.
Why link your online bank to RemitBee?
If you are considering opening a Canadian online bank account to send money abroad, you can link it to RemitBee. We are a fintech company that offers a range of services, including money transfer and currency exchange.
When you link your Canadian bank account with RemitBee, you will experience seamless and fast money transfer service without paying high fees.
When you remit over 500 CAD in one transaction, you don’t need to pay any transfer fees. Additionally, you can be assured of the best currency exchange rates.
