Compare digital banks in Canada

Learn how a digital bank could benefit you and how you can get started with one today.

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Woman depositing a cheque with her smartphone

EQ Bank Savings Plus Account

EQ Bank Savings Plus Account

2.00 % APR

rate

  • Zero everyday banking fees
  • Free transactions
  • No minimum account balance

EQ Bank Savings Plus Account

With no everyday banking fees and free transactions, open an EQ Bank Savings Plus Account and get an interest rate of 2.00%.

  • Account fee: $0
  • Interest rate: 2.00%
  • Min. deposit amount to open account: $0
  • Account type: Savings
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Like many other parts of our lives, banking is becoming increasingly digital. Canada has a number of new digital banks, also called challenger banks, promising to revolutionize the financial industry through the use of world-class technology and digital services. But are they worth the hype?

Learn about some of the new banks on the block and what makes them different.

What is a digital bank?

Like the name suggests, a digital bank operates digitally, usually from an app or website, rather than from a physical branch or office. A digital bank is a fairly loose term. The correct industry name for these banks is a challenger bank.

A challenger bank is a completely digital bank that doesn’t use any existing legacy systems to operate. This means the bank doesn’t use any physical infrastructure or digital operating systems that are already being used by existing financial institutions. The technology used by these fully digital banks is developed from scratch. They get their name from their roles as challengers to traditional banks, especially the big 5 Canadian banks..

Compare digital banks in Canada

Name Product Interest Rate Promotional Interest Rate Minimum Balance Account Fee
Tangerine Savings Account
0.40%
2.8%
$0
None
Earn 2.80% interest for 5 months (up to a maximum of $1,000,000) as a new Tangerine client. Offer expires July 30, 2020.
EQ Bank Savings Plus Account
2.00%
N/A
$0
None
Enjoy zero everyday banking fees, free transactions and no minimum balance with an EQ Bank Savings Plus Account.
Wealthsimple Cash
1.40%
N/A
$0
None
Earn 1.4% on any money you invest and withdraw your funds at any time.
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*The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.

What other digital banks exist in Canada

There are a number of digital banks already operating in Canada or about to launch:

  • Stack. This challenger bank is Toronto-based. It offers no fees and a pre-paid Mastercard that can be instantly loaded with cash at over 10,000 locations across Canada.
  • Revolut. This UK-based bank was created with travelers in mind, offering low fees for international purchases, withdrawals and money transfers. Revolut’s Canadian launch date hasn’t been announced yet, but you can sign up for their waitlist online.
  • Impak Finance. Based in Quebec, this digital bank’s focus is on ethical banking and social responsibility.
  • Quest Bank. Based in Toronto, Quest Bank is the banking division of online brokerage Questrade. Their application for a banking license is currently being reviewed (as of November 2019).
  • NorthOne Business Banking. This challenger bank is based in the US but is headquartered in Toronto. Its focus is small businesses and startups.
  • Motusbank. Newly opened in 2019, this Ontario-based bank is the digital banking arm of Meridian Credit Union. It is a full service bank.
  • ATB Brightside. This Alberta-based, mobile-first digital bank that was setup by ATB Financial.
  • Mogo. Based in Vancouver, Mogo offers a prepaid Visa card along with a digital bank account and other traditional financial products.
  • KOHO. Full-service digital based in Toronto. it also offers a prepaid VISA card with its individual and joint banking accounts.

KOHO vs. Stack

What’s the difference between a digital bank and a traditional bank that’s available online?

Some banks could appear to be digital banks if they don’t have branches and customers use mobile banking apps to control their money. However, just because a bank doesn’t have branches and offers a range of digital products and platforms doesn’t mean it’s a digital bank or a challenger bank. These online-only banks are built on existing infrastructure and closely mimic traditional banks, but true digital banks utilize new technology to create innovative banking solutions.

Must read: A bank offering Apple Pay isn’t necessarily a digital bank.

Many banks offer contactless payments via digital wallets like Apple Pay, Google Pay and Samsung Pay, but offering a digital feature doesn’t make them digital banks.

Similarly, if a bank offers a top-notch mobile banking app, internet banking services, cardless cash facilities and digital savings tools, this doesn’t automatically mean it’s a digital bank either. Remember, a 100% digital challenger bank is one that doesn’t use any existing banking systems or infrastructure.

What is app-based banking?

App-based banking is any sort of financial institution or tool that you control primarily through an app. There are several advantages to app-based banking:

  • Banking access in your pocket
  • Many companies offer 24/7 access to banking support
  • Instant spending notifications
  • Many banking apps offer ways to automatically save money

Things to know about app-based banking

Using your phone as your main point of contact with your bank can save you time and give you more control over your finances, but there are a few things to be aware of.

Different types of app-based banking

App-based banking encompasses a lot of different financial products, including:

  • Digital banks. Digital banks rely on new, innovative technology and are generally app-based.

  • Traditional bank apps. App-based banking doesn’t only apply to challenger banks, it has also become increasingly possible to bank on your smartphone with traditional banks like the big 5.
  • Apps that help you save. One of the most common reasons for people heading away from traditional banks and towards app-based banking is how easy app-based banking makes it for people to track, save and manage your money at a glance.
  • Prepaid card apps. Some companies let you control a prepaid debit card from an app so you can track your transactions and see exactly how much money you have left.
  • Investment apps. Some apps let you invest in stocks from your phone so that you have more control over your finances.

Are digital banks safe?

Digital banks need to have the same banking licenses and approvals as existing Canadian banks before they’re able to offer products and services to consumers. These new banks will be regulated by the Office of the Superintendent of Financial Institutions (OSFI) and the Financial Consumer Agency of Canada (FCAC) in the same way that existing banks are regulated.

Your deposit of up to $100,000 with an Canadian Deposit Insurance Corporation (CDIC)-insured bank is protected by the Canadian government. This means if something were to happen to the bank, your money (up to this amount) would be safe. Note that some of the digital banks mentioned in this guide are not yet considered banks and haven’t yet been licensed or CDIC-insured.

How to get started with a digital bank

If you’re interested in joining one of these digital banks simply visit their website and sign up. If you want to join one of the new digital banks that have yet to open in Canada, you can join their waitlist by visiting their website. When they launch products, those on the waitlist will be the first to know and the first to receive access to these new products.

Bottom line

Digital banks are becoming more and more popular and for good reason. They often cater to specific niches and groups and they’re known for offering innovative apps. But before you ditch your current bank, take the time to read through all of the fine print to make sure the bank you’re interested in is as good as it sounds then compare digital banks to find the right one for you.

Frequently asked questions

Read more on this topic

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  • Revolut vs. N26 We take a closer look at two of the major "challenger banks". Is Revolut or N26 the better bet?
  • Revolut app and debit card review Is Revolut's app-only bank the solution for you? We talk about the account, Revolut app. Read our review to get the low down on another challenger bank.
  • Mint app review Mint helps you keep track of your bills, budget and balances — learn how it works and see if it's a good choice for a personal financial tool.
  • N26 Bank Is N26 bank the right account for you? Learn how it works, what features it offers and how to get on the waiting list.
  • Teen debit cards and bank accounts Many banks offer accounts for teens where they can get their own debit card and begin saving. See how these accounts work and compare options.
  • Compare the Big Five Canadian banks Discover and compare a range of personal and business financial products from the largest banks in Canada.

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