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Digital banks in Canada in 2023

Learn how how to get started with a digital bank in Canada today and explore new banks in Canada

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  • Free transactions
  • Zero everyday banking fees
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Digital banking in Canada is here to stay. According to data from the Canadian Bankers Association, 88% of Canadians currently use online banking and more than half say it is their most common banking method.

Use our guide below to compare digital banking providers in Canada and see which traditional banks offer digital banking though their websites and banking apps. Plus, learn about new banks in Canada, challenger banks, mobile banking apps, and the best online banks in Canada.

What is digital banking?

Like the name suggests, digital banking (also called online banking) is the activity of dealing with your finances through the internet using virtual accounts. A new bank or online banking provider operates digitally, usually from an app or website, rather than from a physical branch or office. Digital banking is a fairly loose, umbrella term that includes online banking, mobile banking, budgeting apps, and challenger banks (also called new banks, which we’ll explain below). And banking online has steadily been increasing in popularity.

What is a digital bank?

Digital banks—also known as challenger banks or direct banks—operate entirely online and are designed to be cheaper and more flexible than traditional banks.

Ultimately, the aim is to compete with the big banks like TD Bank, CIBC, RBC, Scotiabank and BMO. In response, some big banks have actually created their own digital banks to keep customers and profits from leaking away to competitors.

For example, Tangerine is owned by Scotiabank, CIBC owns Simplii Financial and Motusbank is a subsidiary of Meridian Credit Union.

Most digital banks were founded in the decade following the 2008 global financial crisis. The number of digital banks in Canada is small but growing, steadily gaining ground in a market dominated by financial industry giants.

Are new banks or challenger banks “real” banks?

“Challenger” is used generally to refer to challenging the market power of traditional banks. Not all challenger banks or new banks are actually banks. According to Canadian regulations, challengers and digital banking apps need a full banking license to use the term “bank” in company branding and marketing materials.

Tangerine and EQ Bank are chartered (licensed) banks that offer a suite of everyday banking products. But apps like Mint and KOHO offer a narrower range of products that target more specific financial needs. Such apps compliment—but aren’t necessarily a substitute for—the institutions you use for everyday banking. Jump to our list of Challenger Banks for more.

Compare digital banks in Canada

BankNotable FeaturesProductsLearn more

Simplii Financial

  • Online banking arm of CIBC (used to be PC Financial)
  • Uses CIBC’s network of over 3,400 ATMs across Canada
  • No fees and $0 global money transfers
  • Offers credit, mortgages and investments
  • Moving to Canada? you can open an account online before you arrive
Go to site
EQ Bank logo, small

EQ Bank

  • Online banking arm of Equitable Bank
  • High interest accounts
  • No fees
  • Unlimited transactions
  • Lock in a 4.85% rate on a 1 year GIC
Go to site
KOHO logo, icon only

KOHO

  • No account fees
  • Earn cash back on the money you spend
  • Free Interac e-Transfers
  • Manage your budget better
  • Avoid NSF fees
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Neo logo, small

Neo Financial

  • High interest rate
  • No account fee
  • Unlimited free transactions
  • Unsecured and secured cashback credit cards available
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Tangerine bank logo, icon only

Tangerine

  • Subsidiary of Scotiabank
  • Uses Soctiabank’s network of over 3,500 ATMs across Canada
  • No fees for daily banking
  • Offers credit, mortgages and investments

Read Review

CI Direct logo, small

CI Direct Investing

  • Earn interest
  • No account fee
  • No restrictions

Read Review

Motusbank Logo

motusbank

  • Online banking arm of Meridian Credit Union
  • Access to over 3,700 ATMs across Canada
  • No fees
  • Offers credit, investments, mortgages, personal loans

    Read Review

    Compare traditional banks and credit unions that offer digital banking and online banking

    BankCan open an account online?Account optionsPopular account option
    Scotiabank logoScotiabankCheck markScotiabank Preferred PackageGo to site
    TD Canada Trust bank logo

    TD Bank

    Check markTD Unlimited Chequing Account

    Read Review

    BMO, Bank of Montreal logo

    BMO

    Check markBMO Performance Chequing Account
    Read ReviewGo to site
    RBC Bank logo

    RBC

    Check markRBC Signature No Limit Banking Account

    Read Review

    CIBC logo

    CIBC

    Check markCIBC Smart Account

    Learn more

    HSBC logo symbol, small

    HSBC

    Check markHSBC Premier Chequing Account

    Read Review

    See more digital banks in Canada

    There are more digital and online banking providers already operating in Canada or about to launch. Many of these new banks in Canada are not actual banks. Instead, they are private financial companies partnered with banks, credit unions and other financial institutions to bring similar products and services. Learn about them below.

    Full list of digital banks, financial apps, and new banks in Canada

    A-Z list of virtual banks, digital banks, new banks and financial app reviews

    Pros and cons of online banking and digital banking

    • Higher interest rates. Most online banks offer higher interest rates because of their low overhead costs.
    • Low to no fees. Most online banks don’t charge monthly fees or require you to carry a minimum balance.
    • Convenience. You can access all your accounts and investments through a banking app on any device 24/7. Make transfers, pay pills and track your spending and savings goals easily.
    • No physical locations. Online banks usually don’t offer face-to-face customer service because they don’t have physical branches.
    • Limited product offerings. Online banks have yet to match traditional banks with their range of product offerings which is sometimes still limited to basic accounts and investments.
    • Limited ATM access. Although this isn’t so bad if an online bank is a subsidiary of a traditional bank and uses their ATM network, this could still be a limitation if you want quick access to cash.

    What’s the difference between a digital bank and a challenger bank?

    Online banks, like Tangerine or EQ Bank, are digital banks that usually don’t have physical branches (or they rely on the branches of other physical banks) and customers use mobile banking apps to control their money. These online-only banks are built on existing infrastructure and closely mimic traditional banks.

    A challenger bank, like Revolut or N26, is a completely digital bank that doesn’t use any existing legacy systems to operate. Unlike regular online banks, challenger banks don’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 banking providers is developed from scratch. They get their name from their roles as challengers to traditional banks, like the big 5 Canadian banks.

    Learn more about challenger banks here

    What is app-based banking?

    App-based banking is any sort of financial management that you do primarily through an app. It’s basically another name for digital banking but based solely through an app. Banking apps are popular tools in the online banking world and can help you save, budget and manage your spending. 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 from new banks

    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

    • Traditional bank apps. App-based online 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. Check out the top 5 banking apps in Canada here.
    • Apps that help you save. One of the most common reasons for people heading away from traditional banks and towards app-based online banking is how easy app-based banking makes it for people to track, save and manage your money at a glance. Budgeting apps like Emma and Mint are examples.
    • Prepaid card apps. Some companies, like KOHO and Stack, 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 help you save and let you invest in stocks from your phone so that you have more control over your finances, like Wealthsimple.

    Is digital banking safe?

    Digital banking providers need to have the same banking licences 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.

    See the breakdown on how Canadians are adopting digital banking

    Your deposit of up to $100,000 with a 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 digital banking

    If you’re interested in digital banking, simply visit their website and sign up. If you want to join one of the new digital bank providers 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.

    Compare digital savings accounts in Canada

    Interested in opening your first online savings account? Compare the products below from some of the best online banks in Canada.

    1 - 4 of 4
    Name Product Promo Rate Regular Interest Rate Monthly Account Fee Transaction Fee e-Transfer Fee Offer
    EQ Bank Savings Plus Account
    EQ Bank Savings Plus Account
    N/A
    2.50%
    $0
    $0
    $0
    Simplii High Interest Savings Account
    Simplii High Interest Savings Account
    5.25% until April 30
    0.40%
    $0
    $0
    $0
    Neo Money Account
    Neo Money Account
    N/A
    2.25%
    $0
    $0
    $0
    Open an account and get a $5 bonus.
    KOHO Save
    KOHO Save
    N/A
    2.00%
    $0
    $0
    $0
    Use promo code FINDERCODE and get a $20 cash bonus when you make your first purchase within 30 days.
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    Compare up to 4 providers

    Bottom line on digital banks in Canada

    Online banking is becoming more and more popular – and for good reason. Besides the convenience they provide, digital banks often cater to specific niches and groups and they’re known for offering innovative apps. But before you ditch your current traditionally 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 banking providers to find the right one for you.

    Online banks, new banks and digital banks FAQs

    Tangerine logo
    EQ Bank logo
    KOHO logo
    motusbank logo
    CI Direct Investing logo
    Simplii Financial logo
    Neo logo
    Alterna Bank logo
    Revolut logo
    Oaken Financial logo
    Intuit Mint logo
    Stack logo

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