If you are one of many Canadians who are fed up with paying excessive monthly bank fees, the growing popularity and numbers of online-only (digital) banks is good news to you. As per Statistics Canada, Canadians paid an average of $216 in bank fees in 2015.
The big banks keep increasing chequing fees, or continually ask you to raise your minimum balance to get a rebate on fees. Believe it or not, but some monthly chequing fees are as high as $30!
It’s not just chequing fees that should make you consider banking with an online-only bank. There are so many other convincing reasons, including:
- Interest payments on your chequing account balance
- Higher savings interest rates
- Cheaper or free cheque books
- Unlimited free transactions
- Account opening cash bonuses (Tangerine)
- Cash bonuses for referring friends (Tangerine), etc.
Tangerine (formerly known as ING Direct) is a subsidiary of Scotiabank. Unlike its parent bank, Tangerine is an online-only bank and apart from a few cafes, pop-up locations, and kiosks in major cities across Canada, most of your interactions will be via an online interface.
Tangerine customers enjoy many advantages, including free access to over 3,500 Scotiabank ATMs in Canada (and 50,000 ATMs worldwide), a versatile mobile app, and a call centre that is available 24 hours a day, 7 days a week.
Banking at Tangerine – Accounts Available
One questions that often comes to mind when people hear “online bank” is: “Do they have all the accounts I need in one place?”
The definitive answer to that depends on what kind of banking services you are looking for. In general, Tangerine offers services that would meet the banking needs of the average Canadian. Here’s a list:
1. Tangerine Savings Accounts
Open a Tangerine Savings account and earn one of the highest interest rates you will find on offer by any bank in Canada. New clients earn up to 2.75% interest for the first 6 months, and 1.10% thereafter. This rate is much higher than what’s available at any of the Big Banks.
During the sign-up process, you will be asked to enter a promotional code i.e. an Orange Key. You can use my Orange key (43979980S1) to qualify for a $50 cash bonus. The cash is deposited in your account after you fund it with a minimum deposit of $100.
Use Orange Key on sign-up: 43979980S1 for a $50 cash bonus
Other savings accounts offered by Tangerine include:
- Tangerine Tax-Free Savings Account (TFSA): This is similar to the Tangerine savings account. It has a special introductory offer rate of 2.75% for the first 6 months, followed by 1.10%. Earn a $50 cash bonus when you use my Orange key (above) during sign-up.
- Tangerine RSP Savings Account: Similar to the other savings accounts – similar interest rates and cash bonus on sign-up.
- Tangerine US$ Savings Account: You can bank your U.S. dollars and earn at a rate of 0.15%.
- Tangerine RIF Savings Account: Are you planning to convert your RRSP to a RIF? You can earn income on your Retirement Income Funds at a rate of 1.10% per annum.
- Tangerine Children’s Savings Account: Get your kid started early on savings and wealth-building habits by opening an account for them at Tangerine. They will earn up to 1.20% per annum.
There are no fees charged for operating your savings accounts.
2. Tangerine No-Fee Chequing Account
Free Chequing accounts are nearing extinction in Canada’s big banks. With Tangerine, you have access to a chequing account that offers:
- Interest earnings on your chequing account balance, up to 0.65%
- Free and unlimited debit transactions
- Free and unlimited pre-authorized payments
- Free and unlimited email money transfers
- Free use of Scotiabank’s 3,500 ATMs in Canada, and 50,000 ATMs worldwide
- Electronic cheque depositing via the mobile app
After opening your Tangerine savings account (and earning a $50 bonus), you can also open a chequing account and earn an additional $100 cash bonus. To qualify for the $100 bonus, you need to either switch your payroll direct deposits, or switch 2 of your pre-authorized payments to Tangerine for at least 3 months.
3. Investment Accounts
There are several Tangerine investment funds and GICs that cater to various investing needs, including: Tax Free Investment Funds, RSP Investment Funds, RIF Investment Funds, and Guaranteed Investment Certificates.
Investment Fund fees (MER) are 1.07%, which is significantly lower than the average investment fees in Canada.
In addition to offering fixed and variable mortgage loans, Tangerine also offers RRSP loans, Home Equity Line of Credit, and a no-fee, money-back credit card.
How To Open A Tangerine Account
Opening a Tangerine account is pretty easy and takes a few minutes (literally) for the initial setup. To activate your account, you will need to confirm your identity by visiting a Canada Post outlet with your ID’s.
When signing up online, you will need to have the following available:
To ensure you get your initial free $50 cash bonus, remember to enter the optional Orange key during the sign-up process.
Other Reasons To Choose Tangerine
Apart from saving on fees and competitive interest rates on savings and chequing, here are a few other reasons why you may choose to bank with Tangerine:
You can stay at home and conduct your banking transactions including free email money transfers (avoid Interac fees), deposit cheques by simply snapping a photo of the cheque with your phone, user-friendly website, and mobile app.
Earn Cash Bonuses on Sign-up
As earlier discussed, you can easily earn up to $150 or more on account sign-up – both savings and chequing.
Earn Cash Bonuses – Refer A Friend
When you use my Orange key 43979980S1, you earn $50 and I also get $50 – WIN/WIN 🙂
Now that you have a Tangerine Account, you get your own customized Orange key which you can give to friends and family when they sign up and deposit at least $100 in their account. By referring friends, you can earn up to $2,000 in bonus cash!
Great Customer Service
My experience so far with the Tangerine customer service folks has been great. You can reach them 24/7 at 1-888-826-4374 (English) or 1-844-826-4374 (French).
Tangerine is a member of the Canada Deposit Insurance Corporation (CDIC). This means that similar to any other big bank, your deposits are insured up to $100,000.
Common Fees at Tangerine
Tangerine is great with their no-fee savings and chequing accounts. However, there are some fees you cannot avoid if you do any of the following:
- Cheque books (50 cheques) – first book free, $20/book thereafter
- Stop payments – 1 free/year, $10 each thereafter
- Canadian drafts – $10
- Interac e-Transfer – $1.00
- NSF fee – $40
- Non-Tangerine/Scotiabank ATM (Canada) – $1
- Non-Scotiabank ATM (foreign) – $2
- Overdraft fee – $5/use
Cons of Tangerine Banking (Online Banks)
Not Brick and Mortar: There are people who want to conduct every financial transaction in-person. There’s really no increased security from doing so, but if that’s what you prefer, online-only banks may not suit your needs.
Cash Deposits: If you do a lot of cash deposits (including small change – coins), an online-only bank may be somewhat cumbersome. You want to be able to access a small local bank branch easily.
Cash Withdrawals: There may be daily dollar limits on how much you can withdraw per day using your debit card at ATMs.
Additionally, transactions like bank drafts may take longer to process.
My final Verdict
My review of Tangerine is based on my experiences banking with them over the last 5 years. I initially opened a TFSA Investment account in 2013, and later went on to open a savings account as well. Although, I have since opened other TFSA investing accounts elsewhere, I keep my Tangerine balanced fund open as a counterbalance to my other growth-oriented/aggressive TFSA accounts.
If you are not looking to close your current bank and are only looking for a great savings account or GIC, EQ Bank also offer some of the most competitive non-promotional interest rates on savings and GIC in Canada as of today. However, they do not offer a free chequing account like Tangerine.
Other competitor online banks in Canada include: EQ Bank, Simplii Financial, Alterna Bank, and Motive Financial.