Top 4 Canada’s Virtual Online Banks
Estimated reading time: 11 minutes
Virtual online banks are not new, but they are gaining popularity for one reason: they go wherever you go.
Canadians now can use virtual online banks where they can bank anywhere at any time with little to no fees.
Today, I want to discuss Canada’s four favourite virtual online banks.
Table of contents
- What Are Virtual Online Banks?
- Changes In The Canadian Banking Industry
- Drive-Thru Banks, ATMs, Online Banks, Mobile Banks
- Welcome To The New Age Of Online Banks
- Top 4 Online Banks In Canada
- 1. Tangerine
- 2. Simplii Financial
- 3. EQ Bank
- 4. Motusbank
- Virtual Online Banks Are Here To Stay
- Subscribe To Canadian Budget Binder
What Are Virtual Online Banks?
A virtual online bank is a bank that does not have a brick-and-mortar building that you visit for banking needs.
With both virtual and online banks able to bank online shares, it’s pros and cons.
Most notably, users can get notifications for bill payments and debts, bank concerns and real-time usage on their mobile device.
Virtual online banks allow users to bank whenever and wherever they want simply by logging online or using a mobile app.
Changes In The Canadian Banking Industry
Gone are the days of long line-ups at the big five banks as the banking industry has changed.
You may think that online banks have created job loss; however, it has increased job creation.
According to the Canadian Banking Association (CBA), banks create more jobs.
- Canada’s banks employ more than 280,000 Canadians.
- Canadian banks also employ more than 110,000 people in other countries
Virtual online banking doesn’t run on magic, which means increased front-end and back-end support.
Someone has to create the website and all the digital mechanics with online banks.
Customer service positions for online banks are critical as well.
New technologies have resulted in the replacement of many routine transaction-based jobs with knowledge-intensive positions.
These new jobs focus on building in-depth, value-added customer relationships. In keeping with this trend, banks are recruiting employees with higher education or skill levels. Existing employees are given opportunities to upgrade their skills through ongoing training and education.
Canadian Banking Association – Focus Banks As Employers
Drive-Thru Banks, ATMs, Online Banks, Mobile Banks
Baking services have come a long way over the years, and my first experience with virtual online banks has been satisfactory.
Below Mrs. CBB shared her childhood memories of the drive-thru bank teller.
Do you remember drive-thru banking?
Drive-thru banking was where a cashier would sit at a window to help process banking needs.
It was popular because you didn’t have to get out of your car and easily accommodated disabilities.
She remembers her mother and father using the drive-thru bank teller at RBC (Royal Bank of Canada).
There would be a dropbox for you to put your bank book, cash, cheques and anything else financially related.
Customers were sad to see that service vanish with the invention of the ATM (Automated Teller Machine).
I’ll tackle the Big 5 Canadian online banks in a future blog post to compare which banks offer the best services for their customers.
The Big 5 are Canadian banks with a brick-and-mortar building you can visit and still bank online.
- Toronto Dominion Bank (TD bank) – Second Largest Bank In Canada
- Canadian Imperial Bank of Commerce (CIBC), Fifth Largest Bank In Canada
- Bank of Nova Scotia – Third Largest Bank In Canada
- Royal Bank Of Canada (RBC) – Largest Bank In Canada
- Bank of Montreal (BMO) Fourth Largest Bank In Canada
Welcome To The New Age Of Online Banks
These days no one blinks an eye when they need cash fast and skips the bank line-up for the ATM.
Customers can also access their money at ATMs around the world.
It’s a pretty cool concept, and customers got used to it.
Virtual online banks were the next step in the evolving banking industry.
Going to an ATM to pay a cheque was fantastic, but now you can scan a cheque with your mobile app.
Canadians can even order cheques online for a small fee if their bank charges a fee.
YES, cheques are used but not nearly as often as in the ’70s and ’80s.
I’m talking from personal experience as cheques are as ancient as they come.
The oldest is dated May 13, 1690, more than 177 years before Confederation and 127 years before the first bank opened in what would become Canada.
The Hudson’s Bay Co. paid 50 pounds to a ship’s captain named Leonard Edgcombe, likely for salary, and the cheque was made payable by London goldsmith Steve Evans.
An Illustrated History Of Cheques In Canada
There’s no need to go to a brick-and-mortar bank unless you need something specific such as a bank loan, personal investing or money order, etc.
It wouldn’t shock me if you could do the above and more with online banks.
I also believe that we may see banks shrink further in size as online banks continue to grow.
If you can get mortgage approval online with a digital company such as Nesto Canada, anything is possible.
Nesto is above all else built by people. We are committed to our mission to offer you a positive, empowering and transparent property financing experience, simplified from start to finish.
Nesto.ca
Technology has changed day-to-day living, and although some may appeal to the greatness of the machine, others prefer old-school ways.
My late father-in-law was one person who was not into virtual online banks and continued to visit the teller to the very end.
We found a box full of bank passbooks he’d kept over the years and went into a bank at least once a week.
I understand how technology can get frustrating, and it’s just not for everyone.
However, if you’re like us and love virtual online banks, I wanted to share our favourites with you.
Below you’ll find four online banks, three of which we currently use and one we are considering.
We’re the type not to keep all of our eggs in one basket and also use KOHO, which is
Top 4 Online Banks In Canada
I did not include any online banks associated with credit unions; however, I realized many more online banks.
Below are our four favourite virtual online banks we use and think you should know about.
1. Tangerine
Our latest addition to our list of online banks we’ve opened is a Tangerine bank account.
Tangerine prides itself when it comes to forward-thinking and its clients.
They offer clients a chequing account, a savings account, and a Tangerine MasterCard.
Whether you want online banking, mobile banking, or over the phone, online banks are the way.
Back in the UK, I went to the bank at least once weekly because online banks were not that popular.
Things have changed since then as banking has been increasingly difficult for people.
Tangerine Management Tools
Tangerine also offers a management tools centre where you can find many resources about banking.
There’s even a banking centre online for seniors to inform them of banking security.
Another cool feature is the Tangerine blog because I’m a finance nerd; reading articles from trusted sites is essential and helps educate me better about banking and the industry.
We also use a Tangerine World Mastercard to Earn 2% Money-Back Rewards in two 2% Money-Back Categories of your choice and 0.50% Money-Back Rewards on all other purchases.
2. Simplii Financial
We have been with Simplii Financial for almost 20 years without any issues.
Simplii Financial is a no-fee bank, and they accepted me when I first moved to Canada.
It’s one of the best online banks in Canada that do not have a brick-and-mortar bank.
We were so impressed with Simplii Financial, initially called PC Financial, that we applied for a credit card.
You earn PC points when you use the Simplii Financial debit card.
You also gain more with the PC Financial MasterCard.
If I told you that we have 6 million PC Optimum points buying products on sale on 20x the points days, would you believe me?
I hope so because it’s true.
That’s over $6000 worth of free products from Shoppers Drugmart or any Loblaws grocery store.
Everything is done online or on the Simplii Financial App, which we also use.
No monthly fees. Great rates. As simple as that. TM
Get $50
When you use your friend’s unique link to open a No Fee Chequing Account, High-Interest Savings Account, or Personal Line of Credit
AND
Deposit at least $100 in a No Fee Chequing Account or High-Interest Savings Account within six months after account opening, and keep $100 or more in the account for at least 60 days
OR
Use $100 off your Line of Credit within six months after opening the account.
Plus, get $200
When you open a No Fee Chequing Account
AND
Add an eligible direct deposit of at least $100 monthly for three straight months.
Your payroll, pension, or employment insurance should do the trick.
3. EQ Bank
EQ Bank HISA
The EQ bank is the bank account that gives you more and is part of our online banks’ list.
EQ BANK comes with no hidden fees that users need to worry about.
Look at what they offer for Canadian online bank accounts and their American online bank account.
- 2.00% everyday interest*
- No everyday banking fees
- Cheap international money transfers
- Unlimited transactions**
- No minimum balance
One of the reasons we opened an EQ Bank account was because our business earns American dollars sometimes.
We wanted to find a bank that offered no fees and the best exchange rate without jumping through hoops.
There are also no minimum fees; we can send USD without fees or charges.
The Canadian Deposit Insurance Company covers them for added peace of mind.
Check it out and see for yourself just how great EQ bank is.
EQ Bank HISA
4. Motusbank
Motusbank is one of the newest Canadian online banks in direct competition with Simplii, Tangerine, and EQ Bank.
It’s like a one-stop shop for everything financially related, and you can do it online, via phone or on your mobile phone.
Just as I do with Simplii Financial, we can scan any cheques using the app without even leaving our homes.
When we’re on holiday, I often check in to see how our bank account is doing.
Some other excellent features of Motusbank that you can accomplish are listed below.
- Use Touch ID to quickly and safely sign in to your mobile app, with just a fingerprint, through your iOS or Android device.
- Make mobile cheque deposits with Deposit Anywhere™ – take a photo of a cheque to move the money into your account.
- Price-match to save money – we make it easy with Price Drop.
- Examine your account balance(s) in seconds without signing in.
- Use Mobile Bill Pay to instantly set up and access over 10,000 bill payees.
No matter which virtual online bank you choose above, it has to be the right food for you.
Virtual Online Banks Are Here To Stay
Undoubtedly, technology will continue changing the way Canadian banks do.
Money management will always be a big part of Canadian history.
We have found no flaws with our virtual online banks that would convince me I need a Big five bank.
I’m a hard one to convince, remember?
It took me 12 years to get my first mobile phone in Canada, and I’m getting used to it now.
As virtual online banks evolve, we may not like it, but we will get used to it.
There are options right now for Canadians and how they choose to bank.
However, who knows what the future of technology and online banks has in store for us?
Discussion: Do you use any of the above online virtual banks?
Please share your thoughts below about being part of an online banking community.
Mr.CBB
Tangerine is no longer competitive with online banks. Unfortunately gone downhill since Scotiabank bought ING Direct and changed the name about 10 years ago. The interest rate used to be better than bricks and mortar banks but now it’s the same. Even though I hang on to a small savings account and some former Streetwise mutual funds in an RRSP, there’s no real benefit to an account with Tangerine any more. It’s been hard to watch their decline. You have to go on a huge hunt mission just to find their interest rates on their website. I mean it is pretty paltry these days, you can understand why they make it hard to find!
Simplii Financial – well I’d stay away from anything CIBC has their fingers in.
Takes a couple of clicks on Motus to find their savings rate. At 1% at least it’s better than Tangerine! I like how EQ Bank has their interest rates on their landing page. Right now that’s the best online banking deal.
Hi Cheryl,
They all have their pros and cons from what I’ve experienced with them all and interest rates everywhere are horrible. I had a laugh the other day when I got my 4-pound interest added to my UK pension from my ex-employer before I moved to Canada. There are times I appreciate the small things in Canada compared to back home. Good point about the hunting mission for the interest rates. I’m going to look into that further. EQ is pretty darn good, I agree with how upfront they are. Which of the virtual online banks do you use or have tried? Next, I will tackle the big 5 to see what they offer. I”m not familiar with every bank in Canada apart from the Big 5 but they are big for a reason. Thanks for your comments Cheryl, they always offer a different perspective and I like that.