How a digital banking account can help you during COVID-19 (Coronavirus)

A bank account you can apply for, and manage, from home.

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COVID-19, also known as the coronavirus, has caused an unprecedented crisis across the world. Temporary business closures and mandatory isolation measures have massively disrupted people’s way of lives, including how everyone manages their finances and banking.

In this guide, we’ll take you through digital banking accounts, including what they are and how they might be a good way to handle your day-to-day banking needs during the COVID-19 crisis.

What is a digital banking account?

A digital banking account is an account that you can apply for and manage entirely from your computer or smartphone. You don’t need to visit a bank branch to apply, receive a debit card or manage your account. This makes it a great option during periods of self-imposed isolation.

How can a digital banking account help you during the coronavirus crisis?

Digital banking accounts come with a number of features that can make banking simpler and more convenient. This is especially important during COVID-19.

  • Little or no face-to-face interactions required. Digital banking providers don’t have branches you need to visit to apply for an account and all customer service is conducted in the app or over the phone. When you have applied for an account and your identity has been verified, your card is mailed to you. Note that some online banks allow you to verify your ID by uploading documents online, while other may require you to visit an on-site location (like Canada Post) to complete the process.
  • Low fees. It’s more important than ever to keep our spending on bank fees low, and digital banking providers have far fewer fees than high street banks. You can usually have your pick of a standard account with no monthly fee or pay for a higher tier account to unlock more features. With all account tiers you are often given free ATM withdrawals up to a certain limit within a certain ATM network, free foreign currency transfers up to a limit, $0 contactless payment fees and no (or low) transaction fees.
  • Budgeting features. Many digital banking providers also have apps that let you manage your spending. Features with these apps typically include automatic spending categorizations to help track your purchases, savings goals and analytics.
  • Low-cost international payments. With travel limited, you may need to send money overseas or receive payments from other countries. You can do this easily with a digital banking account.

What other features come with a digital banking account?

You can also find a number of other features offered by digital banking accounts, including:

  • Multiple accounts. Tangerine lets you open more than one account, as does EQ Bank.
  • Mobile wallets. Digital features such as Apple Pay and Google Pay are usually standard.
  • Paying your friends. Along with easy international transfers, you can pay your friends, too. This includes bill splitting functions, Interac e-transfers or Visa Direct with banks like TD.
  • Card and safety controls. Keeping your money safe is easy with a digital banking app. You can switch off contactless payments in the app and switch them on again when you like. You can also lock and unlock your card if you lose it or it’s stolen and also change your spending limit, all within the app.
  • Cryptocurrency. Some digital banking providers let you buy and sell cryptocurrencies using your online account.
  • Savings. Many digital banking providers offer savings accounts that pay interest on your balance as well as savings functions that encourages you to set aside to reach your financial goals.

Compare a range of digital banking accounts

Name Product Interest Rate Promotional Interest Rate Min. Bal / Min. Deposit Account Fee
EQ Bank Savings Plus Account
1.50%
N/A
$0 / $0
$0
Enjoy zero everyday banking fees, free transactions and no minimum balance with a Savings Plus Account from EQ Bank.
Tangerine Savings Account
0.15%
2.15%
$0 / $0
$0
Earn 2.15% interest for 5 months (up to a maximum of $1,000,000) as a new Tangerine client when you open your first savings or chequing account and use the promo code EARNMORE. Plus, get up to a $200 bonus when payroll requirements are met. Apply by November 23, 2020.
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What fees and charges come with digital banking?

These differ depending on the provider, but generally you can expect the following:

  • Monthly fee. Many digital banking providers offer $0 account options and possibly paid, tiered accounts that include more features. Alternatively, some providers charge no monthly account fee but charge small fees for each Interac e-Transfer, ATM withdrawal or for other types of transactions.
  • Foreign currency fee. You’ll find that digital banking providers generally waive foreign currency fees. However, this may be for only a certain number of transactions per month. If you’re currently overseas or plan on travelling later on with the account, make sure you pick an account that meets your needs.
  • ATM withdrawal fees. Usually, digital banking providers will not charge for ATM withdrawals up to a certain number per month. This is because these accounts do not charge you any transaction fees or contactless payment fees, so you can use them as often as you want in-store or even online without being charged.
  • ATM withdrawals abroad. You may be charged a fee for withdrawing money from an ATM in a currency other than CAD.
  • Card delivery. Generally, card delivery will be free, but some digital banking providers charge a replacement card fee if you lose or damage your card and need a new one.

Best debit card for travelling overseas

How do you sign up for a digital banking account?

Signup is relatively simple. Once you’ve compared your options above, click “Go to Site” on your chosen digital banking account and you’ll be taken to the website to complete the signup process. You’ll need a few things to sign up:

  • Personal details such as your name, date of birth, residential address, email and phone number
  • 1-2 pieces of valid, government-issued ID such as a passport or driver’s license
  • Proof of Canadian residency like a recent utility bill, phone bill or pay stub with your name and address printed on it.

Once you’ve verified your identity you may need to make a small, minimum deposit to open the account, although many providers don’t require this.

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