The best online banks in Canada of 2021 (2024)

Article content

This article was created by StackCommerce. Postmedia and StackCommerce may earn an affiliate commission through links on this page.

Over the past year and a half, we have seen just how little we rely on in-person services from brick-and-mortar banks, with most avoiding their local branch and opting to use online products offered by their traditional banks instead. This calls into question why we wouldn’t choose an alternative that offers the same services but with little to no fees, such as in the case of an online bank.

The online banking industry in Canada got its start around 1996 and although people were somewhat skeptical at first, the industry has grown to proportions today that rival the traditional banking industry.

Online banks have significant advantages over their traditional counterparts. They have developed a business model that provides you with the best of both worlds: low — and even no — monthly fees along with accessible customer service, albeit administered remotely. However, not all online banks are created equally, so we have compiled a list of the best online banks in Canada of 2021 to help you explore the landscape and learn more about what they have to offer.

Best Bank Overall: Tangerine
Best Bank for Retirement Savings:EQ Bank
Best Bank for High-Interest Rates:Neo Financial
Best Bank for Product Selection:Simplii Financial
Best Bank for Small Businesses:Manulife Bank
Best Bank for GIC Savings: Achieva Financial

Best bank overall: Tangerine

Tangerine began operations in 1997 as ING DIRECT Canada. As one of the oldest, Tangerine is rated as the best online bank on our list for its variety of services, as well as some unique offerings that are not common in the online banking industry.

Tangerine is the only direct bank that does offer in-person services. Their “cafés,” located in a select few major Canadian cities, provide in-person account openings as well as day-to-day financial transactions — along with which you can enjoy a free cup of coffee.

They offer the most ATMs of any online bank, as the Scotiabank network is available to their clients free of charge. They also offer a chequing account, five types of savings accounts, special interest rates for new customers, as well as Mastercard credit products.

Best bank for retirement savings: EQ Bank

EQ Bank is backed by Equitable Bank and has been in operation since 2016. It turns heads with high praise, listed as the #1 bank in Canada on Forbes’ list of World’s Best Banks for 2021. EQ Bank makes our list of best online banks as the one with the best retirement savings plan.

Their RSP Savings Account’s interest rate as of writing is listed as 1.25 per cent and has consistently been head and shoulders above the industry average. They also offer a tax-free savings account that allows customers to reach long-term goals more easily. They offer similar benefits we can find with most direct banks: no monthly fee, automated account options and free unlimited Interac e-Transfers.

Article content

The drawback to EQ is that they do not offer a chequing account like most online banks. They also do not offer any credit card products and have only one type of savings account. If your focus is earning interest on your savings, however, EQ Bank is the best option.

Best bank for high-interest rates: Neo Financial

Neo Financial is the youngest of the direct banks in Canada, having commenced operations in 2020. They bill themselves as “a technology company that’s building a better financial experience for all Canadians.” They boast of having the eye (and the backing) of top investors in Canada and were instrumental in the wild success of the SkipTheDishes app.

As a new financial institution, they are still developing their offerings, however, the 1.30 per cent interest rate they offer for their savings account puts all other banks on our list to shame. The Neo Mastercard is their flagship credit product, offering cash-back rewards for everyday shopping.

Article content

Not only does Neo Bank have no annual fees, but they also offer no over-limit fees — a rarity among both traditional and direct banking institutions. As a technology company, both Apple and Google Pay are available with their financial products, along with real-time notifications on their app. For this, our vote is for Neo Bank as one of the best online banks in the New Banks category.

Best bank for product selection: Simplii Financial

Simplii Financial is affiliated with the Canadian Imperial Bank of Commerce (CIBC) and was founded in 2017, a product of the termination of the Presidents Choice Financial brand. As the only online financial institution to offer Mutual Funds, they take the spot as our pick for the best online bank in terms of variety of services.

Article content

Their nearest competitor in this category is Tangerine and, like them, they offer the Simplii Financial Cash Back Visa. Products that aren’t often seen in the direct banking industry are lines of credit, personal loans, as well as mortgages — all of which Simplii Financial has on offer.

Along with the standard fare of no monthly fees, Simplii also offers a chequing account with free unlimited transactions. Additionally, the CIBC network of ATMs ensures that customers have convenient access to cash withdrawal services.

Best bank for small businesses: Manulife Bank

Manulife Bank is a subsidiary of Manulife Financial, which was incorporated in 1887 by an act of parliament as an insurance company. Manulife Financial’s long history as an investment firm positions Manulife Bank as our top pick among the best online banks for small businesses.

Article content

The Business Advantage Account is a high-interest savings account that caters to small and medium-sized businesses but also provides the flexibility of easy access to funds without fees. Manulife Bank also provides personal banking services with the standard benefits we expect from an online bank and the added benefit of credit products, including a Visa Platinum Card with no annual fee.

The downside to Manulife Bank is the monthly fee for their All-In Banking package — although it can be waived provided you adhere to the eligibility requirements. Their High-Interest Savings Account also has a monthly fee, but it too can be waived with their minimum balance requirements.

Best bank for GIC savings: Achieva Financial

Article content

Achieva Financial was established in 1998 as a division of Cambrian Credit Union. Founded in 1959, this credit union is one of Manitoba’s largest and provides Achieva Financial, the legacy of trust and good service that credit unions are known for.

Primarily focusing on savings, Achieva offers a wealth of options including a daily savings account, as well as TFSA, RRIF and RRSP Savings Accounts. They also have a full host of GIC savings options including their GIC Ladder Strategy, which allows investors to “continuously invest [their] savings at the highest interest rate available.” This strategy allows investors to always maintain access to one-fifth of their funds, giving them flexibility for emergencies.

This product is unique in the industry, and while they don’t offer a chequing account or credit card, it positions Achieva Financial as our choice for the best GIC savings platform.

The online bank industry in Canada is robust, offering plenty of options for whatever your financial goals may be. The best online banks for your purposes will be determined by the particular type of financial solutions you are looking for. The options presented here provide an overview of some of the industry’s leading institutions, allowing you to make the wisest decision when choosing an online bank.