Best Online Banks in Canada
There are dozens of local and international companies on the list of online banks in Canada that have been serving Canadians for many years. Although there aren’t many virtual banks based in Canada, the majority of the top banking companies come to Canada from the U.S. and Europe. Nothing is surprising here because the first internet banks originated from the above regions. Today, they provide services to citizens of many developed countries and successfully operate on a global scale. Neobanks offer virtual and physical debit cards, issue loans and micro-loans, and allow currency conversion and transfers between banks in different countries.
A review of online banks in Canada shows that these companies offer numerous benefits. Their key feature is that they provide services without physical branches, and although some neobanks have headquarters, they do not operate as banking offices. However, many people have never used online banking services or have only had limited experience. Most likely, they will want to know how to choose the best online banks in Canada. They may also want to know what fees are acceptable, as well as what functions the mobile application should have. Traders Union experts have prepared a comprehensive guide that contains all of the answers.
Start Working with Digital Banks Now with the Wise Bank!What is an online bank in Canada
These companies are also known as “virtual banks”, “internet banks”, “digital banks”, or “neobanks”. They operate worldwide and confidently displace traditional types of banks. Many of the benefits of virtual banks in Canada exist because they do not have physical branches. This means that clients are not required to go a bank or office, wait in lines, or speak with managers. Furthermore, there is no need to prepare a large set of documents and wait weeks for verification results (for example, for loan approval).
Internet banks in Canada operate online, with a significant part of the processes automated. For example, to open an account, a client only needs a smartphone with internet access and a scan of his proof of identity, such as a passport or driver’s license. The list of services provided by an online bank does not differ from those of a traditional bank. Clients can use their smartphones to make payments or order a virtual bank card, make purchases and orders online, obtain consumer loans and mortgages, insure their lives or property, aggregate accounts, or make deposits and investments.
To date, 78% of Canadians have an online account or regularly use the online services of traditional banks. From this point of view, there is the highest percentage of people interested in online banking. However, there is an important caveat: not all businesses in the country provide high-quality services at reasonable fees. In this article, the Traders Union experts review and briefly describe the best online banks in Canada.
Some features of virtual banks in Canada include:
payment for goods or services online and offline;
transfers within the country and to foreign banks;
savings and investment accounts;
loans for residential property, study, or car;
aggregation of data across multiple accounts.
👍 Advantages of internet banks:
•Most online banks in Canada do not charge a subscription fee for their services. Instead, they earn income using transaction fees. Even if the bank does not offer a free plan, its services are still cheaper than those of any traditional bank.
•The neobank client manages his account through the website or a mobile application that can be installed on a smartphone or tablet. He can get absolutely all services online, including loan approval, which takes only a few minutes.
•The best virtual banks in Canada operate in other countries as well. Moreover, most companies of this type do not have regional restrictions. That is, it makes no difference where the client is physically located; all he needs is a smartphone with a bank app and access to the internet.
•The application gives the user complete control over his financial activities. The dashboard shows data on profits and expenses, where any item can be detailed. The user can generate standard reports, including for business accounts.
•Almost all virtual banks in Canada offer savings accounts, where the rate often starts at 1.95%, which is higher than the global average. In addition to saving, many companies provide the opportunity to invest in securities and even cryptocurrency.
•The owner of an online account in Canada can obtain a loan at any time, open the required type of account, or make an international transfer. Online banks comply with modern standards of online banking, offering everything that a client may need.
•Neobanks in Canada use modern encryption methods to protect user funds and data, and many banks offer deposit and investment insurance. Applications are also protected by advanced-level technologies, such as biometrics, access codes, and push notifications.
•Customer service for most online banks can be reached through a variety of channels, including live chat, call centers, and email. Live chat is the preferred option because it ensures a quick and competent response to the query.
👎 Disadvantages of online banking:
•Online banks in Canada do not have their own ATMs. This means that cash withdrawals are subject to a fee. Some companies cooperate with well-known ATM networks, which allow clients to withdraw money from them for free. However, most of the time, there are restrictions, such as a limit on the number of withdrawals.
•Not all online banks accept cash deposits from ATMs. Some banks also do not support deposits via postal orders or scanning checks. Thus, internet transfers are the primary and, for some online accounts in Canada, the only way to make deposits, which is not always convenient.
•The third drawback is subjective. It is related to the fact that some people are more accustomed to speaking with others in person. In the case of online banks, such communication is not possible. Communication with the manager or technical support takes place by mail, phone, or online chat. It’s faster and easier, but not equally comfortable for every person.
List of online banks in Canada with favorable terms
There are dozens of full-featured online banks operating in Canada, the majority of which are not based in the country and have their headquarters abroad. Nevertheless, each of these companies operates within Canadian legislation, is regulated by international bodies, and its activities are transparent. Many Canadian online banks have been in operation for more than a decade. These are trustworthy, proven companies that are favorable to work with.
To determine which neobank is best in a given situation, prospective clients should look through the list of all online banks in Canada and compare them across all parameters. However, such an approach will take weeks. To ease the situation, the Traders Union offers an alternative method. TU experts have already conducted a comparative analysis of all neobanks in Canada and compared them. They have highlighted the top 10 companies that offer the most complete list of online banking services and charge fairly low fees. The basic information on these banks is presented in the table below.
| Regulation in Canada | Canadian dollar support | Loan rate | Service fee | ||
|---|---|---|---|---|---|
Wise |
Yes |
Yes |
Individually (up to 6.40% on a mortgage) |
No |
|
CIT Bank |
Yes |
No (sub-account) |
Individually (depends, among other things, on the client’s credit score) |
No |
|
Revolut |
No |
Yes |
From 7.3% |
0-13.99 euros per month, depending on the plan |
|
Manulife Bank |
Yes |
Yes |
From 5.95% |
$0 or $120 per year |
|
Capital One (Canada) |
Yes |
Yes |
Individually (depends, among other things, on the client’s credit score) |
From $5 (free if the account balance is over $2,000) |
|
Varo |
Yes |
Yes |
Up to 23% |
No |
|
EQ Bank |
Yes |
Yes |
Individually |
No |
|
Simplii Financial |
Yes |
Yes |
From 5.95% |
No |
|
Motusbank |
Yes |
Yes |
6.45% |
No |
|
Tangerine |
Yes |
Yes |
19.95% |
No |
As you can see, most of the companies on the list of online banks in Canada do not charge a subscription fee for their services. If the “Service fee” field contains a price range, it means that the bank offers several plans. There is, in general, a free plan, and the price range will contain “0” as the main figure. It is difficult to provide accurate data on the loan rate because, in most cases, the loan is calculated individually, taking into account the client’s credit score and other factors.
The banks listed here are regulated by regional or international authorities. Motusbank, for example, operates under the supervision of the Meridian Credit Union (a Canadian banking union). The exception is Revolut, since it does not have an international regulator, but it is supervised in the UK, which is also acceptable. In other words, all of Canada’s internet banks from the above list are verified. They operate officially and have a banking license.
Wise
Wise is included in all the lists of the top online banks in Canada, as it offers advanced services under favorable terms. The bank is widely represented in all regions, allowing its clients to make international transfers and currency conversions with minimal fees. The main account can be used to store funds in different currencies, including the Canadian dollar. The bank is regulated in Canada and is subject to local legislation. Right after registration, the client receives a virtual bank card for online payments; in the future, a physical debit card can be ordered. A client can also take advantage of free ATM withdrawals several times per month, after which an average 1.75% fee is charged (the actual fee amount differs depending on the ATM).
👍 Pros
•several account types;
•possibility of holding funds in 56 different currencies;
•transfers between banks in 80 countries;
•no fees for transfers in the base currency.
👎 Cons:
•no savings accounts;
•no credit instruments.
CIT Bank
CIT Bank is one of the best online banks in Canada. It serves residents from many countries and provides various types of accounts for individual purposes. In addition to accounts for private clients, there are business and corporate accounts. The savings rate is quite high – 4.25%. However, the client must keep in mind that to receive such a rate, he needs to deposit $1,000; otherwise, the rate will be reduced to 3.25%.
CIT Bank has a lot of credit instruments that are provided under optimal terms, which favorably set this company apart from its competitors. In addition to regular consumer loans, banks offer mortgage lending. Also, clients can obtain a loan to buy a car or pay for tuition. The bank’s client can store funds on the main account in base currencies, convert them at the market rate, and use an international transfer function. The app has a convenient dashboard with aggregated data.
👍 Pros
•neobanks do not charge a service fee, only commissions;
•refund option for ATM fees;
•high-interest rate (several levels).
👎 Cons:
•no free cash withdrawal option;
•technical support is only available during business hours.
Revolut
No review of the best online banks in Canada is complete without Revolut. It is one of the largest international virtual banks with impressive internal operations. It provides several account types for both private clients and businesses, with terms and options that can be flexibly customized. Local and international transfers are carried out in the shortest possible time. Fees range from average to below average. Revolut provides all the typical functions of online banks in Canada. For example, it offers mortgage lending and specialized loan solutions. Note that the list of available services and the terms of their provision depend on the selected plan.
👍 Pros
•fast international transfers;
•integrated currency conversion option;
•holding funds in different currencies.
👎 Cons:
•the free plan has many limitations;
•additional fees for operations with exotic currencies.
Manulife Bank
This neobank offers several types of accounts for private clients and businesses, allowing flexible customization of options. Users can apply for a credit card with 0.5-2% cash back on any purchase, no annual fee, overdraft protection, “smart savings,” and specialized loan programs, including a low-interest mortgage. All internal transactions are free if the client’s account balance exceeds $1,000. This Canadian online bank makes international transfers via the Interac network. Cash withdrawal is free at 3,500 ATMs in the partner network. Clients can open investment accounts with yields ranging from 1.85% to 4.80%, as well as TFSA (tax-free savings account). Deposit insurance is provided through the CDIC (Canada Deposit Insurance Corporation).
👍 Pros
•several types of accounts to choose from;
•diversified investment portfolios;
•exclusive privileges and benefits for the Visa Infinite card;
•no subscription fee; no fees if the account balance exceeds $1,000.
👎 Cons:
•credit card with improved terms costs $120 per year;
•to qualify for a refund of the fee for withdrawals at ATMs outside the partner network, the client’s account balance must exceed $1,000.
Capital One (Canada)
Capital One is one of the most famous neobanks in the USA, which also operates in Canada. The bank’s name is followed by the country’s name (Capital One Canada). It made the list of the best online banks in Canada for many reasons. For example, the bank offers savings accounts with high rates without requiring the blocking of a deposit. There is a function to automatically increase the credit score of a new user. The bank issues loans for a variety of purposes; the rate and other parameters are customizable. The range of accounts includes accounts for individuals, businesses, and corporations. Capital One is especially convenient for businesses because of integrated solutions that provide automation of routine operations (for example, taxation and reporting). Because Neobank partners with Allpoint and MoneyPass, its clients can withdraw cash for free from ATMs affiliated with these networks.
👍 Pros
•all services are available without a subscription fee;
•provision of no-fee overdraft;
•all loan parameters can be flexibly configured;
•high-rate savings accounts;
•24/7 customer service.
👎 Cons:
•high fee when withdrawing cash from ATMs that are not part of the Allpoint and MoneyPass networks.
•some clients are dissatisfied with the responsiveness or quality of customer service.
Varo
A review of online banks in Canada shows that Varo offers competitive terms. The basic tariff is completely free. There is also no minimum deposit amount. Varo cooperates with Allpoint, which allows clients to withdraw cash for free from affiliate ATMs. Also, clients can deposit funds through Green Dot Reload without additional fees. In addition to the standard account, users can open a savings account. The initial rate is 2%, but if the deposit exceeds $1,000, the rate increases to 5%. This neobank has many unique functions. For instance, Save Your Pay automates transfers from checks.
👍 Pros
•no subscription fee;
•high savings rate;
•free withdrawal at Allpoint ATMs;
•24/7 customer support;
•fast and user-friendly application.
👎 Cons:
•savings account can only be opened if there is already a regular one;
•ATMs that are not part of the Allpoint network charge high withdrawal fees.
EQ Bank
Among the best online banks in Canada, EQ has a special place. This is the only bank on the TU list that does not provide a debit card. However, a standard user account allows the client to pay bills and make transfers, including international ones. It has a handy currency conversion function. The interest rate on the savings account is between 1.25% and 2%. There is no subscription fee. Note that most of the transactions are carried out without additional fees. The bank issues GIC (guaranteed investment certificates) with high profitability for 1-5 years.
👍 Pros
•savings rate is higher than that of many competitors;
•EQ online account can be linked to an account with another bank;
•fee-free EFT electronic money transfers;
•responsive customer support (not 24/7).
👎 Cons:
•debit or credit cards are not issued;
•no cash withdrawal option;
•international transfers are available only through the Interac e-Transfer service.
Simplii Financial
A review of online banks in Canada confirms that many local neobanks can compete with the world’s top banks. Simplii Financial is a subsidiary of CIBC, which gives it a powerful service base and an advanced technology stack. There is a current account for private clients with a full range of internet banking services, plus investment solutions and special accounts for pensioners. Simplii Financial clients can withdraw cash for free from CIBC ATMs, which are part of Canada’s largest ATM network. Users also note the convenience of the bank’s mobile application.
👍 Pros
•no subscription fee, low commissions;
•favorable terms for the current and savings accounts;
•decent range of loan products, including consumer loans;
•credit cards offer cash back benefits.
👎 Cons:
•international transfers only via the Interac e-Transfer platform;
•bank services are not available in Quebec.
Motusbank
This Canadian online bank is regulated not just by one of the state-owned banks but by the Meridian Credit Union banking union. Motusbank offers a current account without a subscription fee and a full set of standard functions, including international transfers. Internal transfers are free of fees and limits. The company works with ATMs in the EXCHANGE network, where clients can withdraw cash for free. The bank offers TFSA (tax-free savings account) and RRSP (registered retirement savings plan) savings accounts with rates starting at 1.85%, as well as a variety of credit instruments and investment programs. Moreover, investments can be automated and effectively diversified.
👍 Pros
•it is considered the most reliable online bank;
•high interest on savings accounts;
•more than 44,000 ATMs with free withdrawals.
👎 Cons:
•no credit cards;
•flaws in the app’s usability.
Tangerine
It is a subsidiary of Scotiabank and offers checking and savings accounts with no service fee. Transaction fees are below average, and the savings rate is 1%. This neobank is unique in that it runs so-called “cafés” in major cities where managers advise clients and other interested parties. Tangerine also offers an investment account, the profit from which is not taxed.
👍 Pros
•it is considered one of the safest neobanks in North America;
•cash can be withdrawn without fee at 44,000 ATMs;
•physical branches are replaced with “cafés”;
•wide range of loan products.
👎 Cons:
•high fees for foreign transactions (2.5%);
•expensive international transfers.
Best online banks in Canada with low fees
A review of online banks in Canada reveals that many of them offer comparable terms, while others have fundamentally different ones. Traders Union experts have examined each bank’s pros, cons, and features, but there is another set of criteria that many users consider to be the most important. These are fees and commissions. TU experts have outlined them in a separate section.
No doubt, high fees make neobank services less favorable. There is no point in making quick international transfers if the client overpays by 2.5% or more. Therefore, in the table below, TU experts provide data on fees in addition to the list of online banks in Canada. Keep in mind that, while TU strives to keep the information up-to-date, the terms of neobanks can change very often, so the most current information can be found only on the website of the chosen company.
| Overdraft fee | ATM withdrawal fee | International transfer fee | International exchange fee | |
|---|---|---|---|---|
Wise |
No |
1.75% (additional terms applied) |
0.3-3.5% |
From 0.3% |
CIT Bank |
No |
No in partner ATMs; 1% in other ATMs |
No or $35 per transfer (depends on the account type) |
No in most cases |
Revolut |
No |
Exemption up to six withdrawals, then 1.5 pounds |
From 0.5% |
From 2.5% |
Manulife Bank |
15% |
No in partner ATMs; individually in other ATMs |
1.99% |
2.5% |
Capital One (Canada) |
No |
2% (+$3 abroad) |
Service is not provided |
No |
Varo |
No |
$2.5 |
No |
No |
EQ Bank |
No |
No |
No (via Wise – under Wise terms) |
No |
Simplii Financial |
19% |
No in CIBC ATMs, 1% in other ATMs |
No |
2.5% |
Motusbank |
21% |
No in the Exchange and Allpoint ATMs, $3-5 in other ATMs |
From $1.25 depending on the transfer terms |
$5 |
Tangerine |
$5 |
No in Scotiabank ATMs, $3 in other ATMs |
No |
+2.50% to the exchange rate |
Best online banks in Canada with high-interest rates on savings accounts
CIT Bank
CIT Bank’s savings account terms have earned it a spot on the list of Canadian online banks with the best service terms. The initial rate is 3.25% with no additional requirements. Furthermore, if the client deposits $1,000 or more, the rate increases to 4.25%. Also, deposits are not blocked, which means that the client can deposit or withdraw funds from his savings account at any time. However, it is worth withdrawing only in emergency cases, as recalculated interest is unprofitable. Given that CIT Bank is a member of the FDIC, the bank’s clients need not worry about their savings because they are insured.
Varo
This is one of the most popular online banks in Canada and provides an initial rate of 2%. The increase in the rate depends on many factors. For example, if the deposit is over $1,000, the rate increases to 5%. This is an unprecedented indicator for Canada since no other bank offers similar terms. Varo has many interesting and useful options. A client, for instance, can set up an automatic deposit into a savings account through specific payment methods. This releases unnecessary routines and allows the optimization of finances. Considering that other parameters of this neobank are also strong (loan terms, application functionality), nothing is surprising about the trend: more and more users are choosing Varo.
Best online banks in Canada with top investment programs
Revolut
According to the Traders Union list, Revolut is unquestionably one of the best online banks in Canada in terms of investment opportunities. The reason for such a high valuation is that this neobank has the largest pool of investment assets. Clients can invest in stocks, bonds, commodities, and cryptocurrencies. They also get a lot of options for diversifying investment portfolios as well as functions for automating basic processes. For example, the client can specify the desired price, and as soon as the chart reaches the desired top indicator, he receives an alert on his smartphone. All investment management is carried out through the application, and the client receives detailed statistics on the market and his finances. Revolut’s fees are fairly low.
Tangerine
Tangerine allows its clients to open an investment account with a deposit of $25 or more. Depending on the initial deposit, the volume of investments, and the term, the profit can be up to 10%. This online bank also offers several types of investment accounts, including a depersonalized one for flexible adjustment of terms and a TFSA. It is also possible to open RSP (retirement savings plan) and RIF (retirement income fund) accounts. The minimum fees for the segment are 0.80% for the basic portfolio, and 0.50% for the ETF (exchange-traded fund). Keep in mind that mutual funds are not insured by CDIC. Like Revolut, Tangerine provides a wide set of options to simplify investing. For example, there is the automation of deposits. The remaining terms also allow Tangerine to keep its place on the list of the best online banks in Canada.
FAQ
What is an online bank?
In Canada, the term “online banks” refers to credit and financial institutions that offer internet banking services. In terms of their capabilities, they do not differ from traditional banks. However, they do not have physical branches, and all operations take place online. As a result, their fees are generally lower.
Reliability of virtual banks in Canada
All companies on the TU list of online banks in Canada have a banking license and state registration. Such neobanks as Tangerine are regulated within the country, while the rest (for example, Revolut) are subject to the legislation of other countries.
Advantages of internet banks in Canada over traditional banks
Since internet banks have no branches and all operations are performed online, there is no need to go to a physical branch or office, wait in lines, or prepare large sets of documents. For verification, the client only needs a smartphone, internet access, and a scan of his identity document. Online banks are excellent at saving their clients’ time and money.
Disadvantages of virtual banks in Canada
Because online banks do not have their own ATMs, cash withdrawals are subject to a fee if the neobank does not work with a network such as Allpoint; however, sometimes several free withdrawals are available. Depositing funds may also be difficult because depositing via mail or scanning a check is not always permitted.
Team that worked on the article
Oleg Tkachenko is an economic analyst and risk manager having more than 14 years of experience in working with systemically important banks, investment companies, and analytical platforms. He has been a Traders Union analyst since 2018. His primary specialties are analysis and prediction of price tendencies in the Forex, stock, commodity, and cryptocurrency markets, as well as the development of trading strategies and individual risk management systems. He also analyzes nonstandard investing markets and studies trading psychology.
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.