Personal banking is becoming more digitalized with every passing year. This means that you can manage your banking whenever, wherever, and that banking fees are slowly diminishing due to the lack of physical branches.
Alterna Bank is a good example of a digitalized bank. As a subsidiary of Alterna Savings and Credit Union, they’ve got the values of a credit union coupled with the low fees of a digital bank.
Offering fully digitalized mortgages and specialized small business banking solutions, they are a strong competitor against other digital banks out there.
In this Alterna bank review, we’re going to go over its features and offerings, go over their governance and safety, and compare them to other digital banks in Canada.
Digital bank with personal and business banking products
Alterna Bank is a good option to complement your existing day-to-day banking
- Great day-to-day banking features such as a no-fee chequing account and High-interest savings account
- Low fees overall
- Offers business banking and financing
- Offers a fully digital mortgage
- Safe and reliable
- Values-based and transparent
- Does not currently offer a credit card
- Does not offer the highest interest rate on their high-interest savings account
About Alterna Bank
Alterna Bank is a national digital bank. Wholly-owned by Alterna Savings and Credit Union Limited, it offers a variety of personal banking products as well as mortgages, investment options and business accounts.
Going over their products and website in general, it’s clear to me that their credit union roots give this bank an edge in terms of community values and innovative products that cater to people as much as they do to profits.
For instance, they offer small business banking services specifically designed for the cannabis industry and pioneered Canada’s first fully digital mortgage.
Whether you are looking for day-to-day banking services, a brand new or transferred mortgage, investment services or business banking, Alterna Bank has options. Let’s dive into what these are and whether they are right for you.
Let’s go through Alterna Bank’s offerings in 3 specific categories: personal everyday banking, homebuying, and business.
Note that Alterna Bank currently does not offer a credit card. If you are looking for a digital credit card to complement your digital bank account, check out the 4 Best Virtual Credit Cards In Canada.
1. Personal Everyday Banking
In the personal banking category, Alterna Bank offers some solid options. With a fee-free chequing account, high-interest savings account, and a variety of registered and non-registered investment products, you can divide up your money in a way that best suits your needs.
This account actually made it to my top 10 no-fee bank accounts in Canada, which you can find here. It offers great services with absolutely no costs; no hidden fees or minimum balances. Let’s go through some of its other features.
- No monthly banking fees with no minimum balance
- Free, unlimited daily transactions: withdrawals, Transfers, Interac e-Transfers, Me-to-Me Transfers, Bill Payments, Cheques, Pre-authorized payments, Debit card payments, Alterna and THE EXCHANGE Network ATM withdrawals and transfers
- FREE, unlimited Interac® e-Transfers
- Overdraft Protection is available for $2.50 a month + interest (calculated and debited monthly to your account)
- 0.05% annual interest rate accrued
If you live in Ontario, you get access to all of Alterna Savings and Credit Union’s branches and ATMs, which can give your account the flexibility of a digital/in-person hybrid. Everywhere else in Canada, you have access to over 3,300 ATMs in THE EXCHANGE® Network completely free.
Travelling to the United States? This account also gives you access to 40,000 ATM’s through the Allpoint Network, free. If you are paying fees for your current chequing account, Alterna’s No-Fee eChequing Account is a great option to save you money.
For more details on this account and information on account opening and verification, go here.
Alterna bank’s High-Interest eSavings Account offers an interest rate of 0.90%. Higher rates like these are usually only offered by digital banks such as this one, so it’s worth checking out. Let’s go through its full account features.
- High-interest rate on every dollar in your account
- Free, unlimited bill payments, transfers and debits
- Free, unlimited Interac® e-Transfers
- No minimum balance
Contemplating on what savings account to open? Check out this article that outlines the 7 Best High-Interest Savings Accounts In Canada 2021.
TFSA, RRSP and RRIF accounts with Alterna Bank offer a 0.90% base interest rate, much like their high-interest savings account. But that’s not all.
If you’re interested, Alterna also offers access to GIC/term deposits as well as mutual funds through their partners Qtrade Asset Management to maximize your earnings.
All of Alterna Bank’s investment options are also available as non-registered products, in case you have already hit your contribution limits or are not looking for registered products at the moment. For Alterna’s rates and full investment options, go here.
2. Mortgages at Alterna Bank
Alterna Bank was the first in Canada to offer a 100% digital end-to-end mortgage. In addition to the online convenience, they also offer good rates on their variable and fixed-rate mortgages, which can be found here.
Alterna Bank mortgages also have some attractive characteristics that you might want to check out: they allow annual payments of up to 20% of your original mortgage balance and waive closing legal fees to $800. All in all, I think this mortgage is worth checking out if you are on the market.
Please note: Alterna mortgage products are not available to the residents of Quebec.
3. Alterna Business Banking Options
Alterna describes their digital small business banking options as having simplicity, speed and ease. They offer a Small Business eChequing Account, loans and lines of credit, and payment processing options.
Their lines of credit run anywhere from $500 to $300,000 and are offered in partnership with Thinking Capital. They state on their website that you can get your pre-approval in a matter of minutes, and even have the funds in your account as quickly as 24 hours.
Their business chequing account comes with good features, which are:
- Zero monthly fee with a minimum daily closing balance of $3,000 throughout the month (otherwise, a $5 monthly fee)
- Free unlimited electronic debit and credit transactions
- Unlimited incoming Interac e-Transfers
- 6 free outgoing Interac e-Transfers per month
For more information on Alterna’s business banking solutions, go here.
Alterna Bank is held accountable to the same rules and regulations as are other Canadian financial institutions under FINTRAC, The Financial Transactions and Reports Analysis Centre of Canada.
Furthermore, Alterna Bank is a member of the Canada Deposit Insurance Corporation (CDIC), which means that your deposits under Alterna Bank, combined with deposits held at Alterna Savings and Credit Union, are protected for up to $100,000.
CDIC is free, automatic, and backed by the Government of Canada.
Alterna Bank also has a section on their website relating to the steps that you can take on your end to ensure that your online banking is safe and secure. To view those tips, along with what the bank is doing to ensure your privacy, go here.
Alterna Bank is a wholly-owned subsidiary of Alterna Savings and Credit Union Limited, the first full-service and member-owned financial co-op outside of Quebec. As a financial arm of Alterna Savings, the Bank has had its roots in the community since 1908.
Alterna Bank is not the same as Alterna Savings. As a customer of Alterna Bank, however, you are automatically a member of Alterna Financial Group, which includes Alterna Savings.
Alterna Savings is a credit union (a financial co-operative) and Alterna Bank is governed as a digital-only, for-profit bank. You can have accounts at both of these institutions and they will be separate because the way that banks and credit unions are governed is inherently different.
The bottom line is that Alterna Bank and Alterna Savings are two separate entities. Alterna Savings has been around since 1908 as an Ontario credit union and holds the newer, digital Alterna Bank as a wholly-owned subsidiary.
As mentioned, Alterna Bank is a fully digital institution. There are, however, other digital banks in Canada such as EQ Bank and Tangerine. Let’s see how they compare to Alterna Bank in their features.
EQ bank is a digital bank with its headquarters in Toronto. Their front-runner product, in my opinion, is their Savings Plus Account which has a great high-interest rate (currently 1.25%) and no fees. Some of its other features are:
- Free unlimited Interac e-Transfers® (to send and receive)
- Free bill payments
- The convenience of virtual international bank transfers (powered by Wise)
- No NSF (Non-Sufficient Funds) chargeback fees for returned items (ex. cheque deposit with non-sufficient funds)
- 4 possible joint account co-holders (including Primary Account holder)
- Mobile Cheque Deposit
In terms of investments, registered products, and borrowing, EQ Bank has options as well.
Where they differ from Alterna Bank is that they lack small business banking and financing options, as well as the option to have separate, designated chequing and savings accounts (EQ Bank only offers one product that is a hybrid of the two.) Depending on how you like to bank, either could be a good option.
Tangerine is a very good digital all-rounder in my opinion. Chequing and savings accounts, mortgages, business banking, investments, credit cards, lines of credit, HELOCs, registered products, give you the opportunity to keep all of your banking digital and in one place.
If you are looking to completely switch your banking to online, I believe Tangerine is a good place to start. However, if you’re simply looking to open a digital account to complement your existing day-to-day banking, Alterna’s community-based values and straightforward products could be the way to go.
Conclusion – Alterna Bank Review
I’m a fan of the products that Alterna has to offer. They seem to operate transparently and with a customer-first mindset that is attractive.
Digital banks are surely up and coming in Canada these days, with what feels like a new option popping up every year. And frankly, online and digital is the direction that personal banking is heading. I hope that this Alterna Bank was helpful for you.
If you would like to check out more banking tips, head here.