Online-only banks like Tangerine and Simplii offer a streamlined suite of banking services and financial products and have become increasingly popular due to a lack of the monthly account fees charged by traditional banks.
Choosing an online bank is easily a savings of over $200 per year on fees!
The accounts offered by the main digital banks are similar to what you get with big banks and include:
- Chequing account
- Savings account
- Investment accounts e.g. TFSA, RRSP, RRIF, GICs
- Credit cards
While their offerings are similar, it is important to note why one may choose an online-only bank over their brick and mortar counterparts.
Chequing accounts offered by digital banks like Simplii Financial and Tangerine Bank have no fixed monthly fees – they are free! Not only that, but they also pay you interest on your chequing balance.
Their savings account is often referred to as ‘high-interest savings accounts’ because they offer a savings interest rate that is significantly higher than what the big banks offer.
You may also be able to obtain a more competitive mortgage rate with online banks.
Tangerine and Simplii are actually owned by much bigger banks – Scotiabank and CIBC respectively. These digital banks are able to offer better deals than their parent banks because they have less overhead to account for.
Other popular online banks in Canada are EQ Bank and Motive Financial.
If you are looking for one of Canada’s best savings rates, you should check out the EQ Bank Savings Plus Account (currently 1.25%*).
Tangerine Bank vs. Simplii Financial: Online Banks in Canada
I have banked with both Tangerine and Simplii and this comparison/review is based on my personal experiences with them over the years and information that is publicly available on their websites.
Tangerine Bank is a subsidiary of Scotiabank and was formerly known as ING Direct Canada. It was originally founded in 1997.
Ways to Bank
Tangerine is an online bank with a few cafes and pop-up locations in major cities across the country. You can conduct your day-to-day banking using their website or mobile app.
Customers have free access to over 3,000 ATMs that operate on the Scotiabank network, and if you need to talk to someone, they have customer service representatives who are available 24/7 via phone (1-888-826-4374).
There is no shortage in the types of accounts offered by Tangerine. Their financial products include:
1. Savings Account: They have multiple savings accounts depending on your needs. Their high-interest savings account is the most popular as it offers one of the most competitive rates available in Canada. Currently, it earns a 0.10% rate.
There are no monthly fees and no minimum balance. This account also allows you to save money stress-free using their Automatic Savings Program. Other available savings accounts are:
- Tax-Free Savings Account
- RRSP Savings Account
- US$ Savings Account
- RIF Savings Account
2. Chequing Account: Tired of paying monthly fees on your chequing? Tangerine’s No-Fee Daily Chequing Account does not have a monthly fee. Its features include:
- Zero monthly fees
- Unlimited free debits, bill payments, email money transfers, and pre-authorized payments
- Interest is paid on your account balance (up to 0.10%)
- Free access to 3,500 ATMs in Canada and 44,000 worldwide
- Free first cheque book (50 cheques)
- Mobile deposit deposits
3. Credit Card: The Tangerine Money-Back Credit Card is a no-fee card that rewards you with 2% cash back on up to 3 categories of spending.
5. Investment Funds: They offer several low-fee index funds that can be used to design a TFSA, RRSP, RRIF, or other non-registered investment portfolio. Read my review of the Tangerine Investment Funds.
6. Mortgage, Home Equity Line of Credit (HELOC), and RRSP Loan.
Read our review of Tangerine Bank.
Simplii Financial is a subsidiary of CIBC and was formerly referred to as PC Financial.
Ways to Bank
Like Tangerine, Simplii is an online bank. Customers can conduct their online banking through their website or by using the Simplii mobile app. You also have free access to thousands of CIBC ATMs nationwide and can speak to a customer service representative 24/7 at 1-888-723-8881.
Similar to Tangerine, Simplii offers a host of financial products that meet the needs of an average bank client.
1. High-Interest Savings Account (HISA): The HISA at Simplii earns 0.10% and they have the occasional promotional offer that pays a bonus rate for a limited time.
There are no monthly fees, no minimum balance, and you can set up automatic deposits. They also offer RRSP and TFSA savings accounts.
2. Chequing Account: The Simplii No-Fee Chequing account has a lot of attractive features like:
- Zero monthly fees
- Unlimited free debit purchases, bill payments, Interac e-Transfers, and withdrawals
- Earn interest on your account balance, up to 0.05%
- Free Interac e-Transfer
- Free access to over 3,400 ATMs in Canada
- Free cheques
- Up to $200 welcome bonus when you meet the eligibility requirements
3. Credit Card: The Simplii Financial Cash Back Visa card has no annual fees and is worth checking out.
4. Mortgages and Personal loans and line of credit
6. Investments: GICs and index mutual funds
Read our Simplii Financial review.
Simplii vs. Tangerine 2022: Drilling Down
These two online banks are very similar in their product offerings. A few things to note:
A. Savings Interest: The basic non-promotional savings rates offered by Tangerine and Simplii on their HISA accounts are the same at 0.10%. While promotional bonus offers may be available to new customers, they are short-lived.
B. Chequing Interest: You can earn some interest on your Tangerine and Simplii chequing balances. Both banks also offer sign-up bonuses when you open a new chequing account.
For example, you get a $200 bonus when you open a Simplii Chequing account and set up direct deposit of at least $100 for 3 months or longer.
C. Convenience: Tangerine is owned by Scotiabank and Simplii by CIBC. Both CIBC and Scotiabank have ATMs all over Canada, so finding a free ATM should not be a problem. They both offer 24/7 phone support.
D. Bonuses/Referral Program: Simplii has a referral program that pays you $50 for each referral (no limits). Tangerine also has a referral program where you earn up to $50 per referral for up to three referrals each year.
Are They Safe? Both banks are insured by Canada Deposit Insurance Corporation (CDIC) which means that your deposits are insured up to $100,000 per account type.
- Top High-Interest Savings Account in Canada
- The Best GIC rates in Canada This Year
- How To Save on Investment Fees
- The Complete Guide To Buying a Home in Canada
Both Tangerine and Simplii work if you are looking at paying lower banking fees. Even if you want to keep your current account or rue missing the face-to-face transactions they provide, you can still take advantage of the higher savings rates offered by digital banks.
A higher savings interest, interest earnings on chequing, and $0 monthly chequing fees, all equate to more money in your pocket.
EQ Bank beats both Tangerine and Simplii on savings interest rates. If you are looking to earn some of the best interest rates available on savings accounts, check the EQ Bank Savings Plus Account! You can also read our review of the bank.