With more than 76% of Canadians using online banking, the shift from brick and mortar banks to online ones is greater than ever.
Online banks usually offer no-fee chequing and high-interest savings accounts, making the hassle of moving your money to a new bank worth it.
At the top of Canada’s online banking world are EQ Bank and Tangerine. Both of these big-name banks offer similar products, but there are slight differences between them that leave one reigning supreme.
As I compare the two and help you find the one that best fits your lifestyle, I’ll look at the following three categories:
- Account Options
- Fees and Interest Rates
After my analysis and going through the pros and cons of each, finding the online bank that suits you should be a snap.
EQ is the online portion of Equitable Bank, a financial institution founded over 50 years ago and is now the eighth largest Schedule I bank in Canada.
EQ is looking to make banking smarter by not charging hidden fees or making customers pay for services they don’t use. With no physical locations, EQ Bank can limit its overhead costs and pass those savings on to customers – mainly in the form of higher interest rates.
- High-interest rates
- No minimum balance required
- Free Interac e-Transfers
- Does not offer a chequing account
- No ATM access available
- No physical branches
Tangerine is a subsidiary of Scotiabank and offers one of the most popular online chequing accounts.
The company promises to make it simple to save and simple to do your everyday banking with them through their wide array of products and services.
- Variety of services from chequing and savings accounts to credit cards and mortgages
- No fee chequing account
- Pop up locations available if you need to speak to customer service
- Limits on ATM withdrawals
- Low-interest rate after promo period ends
EQ Bank Vs Tangerine – Features and Benefits
Now it’s time to get down to the nitty-gritty and compare the nuts and bolts of each bank. While both offer similar services, there are differences that show a clear winner in each category. Let’s examine each bank’s account options, fee and interest rate selection, and convenience.
EQ offers significantly higher interest rates than its competitors on its savings and GIC accounts. Compared with the Big Five Banks’ nominal rates, EQ’s interest rate is almost triple that of the brick-and-mortar banks.
Tangerine does usually offer an introductory promotional interest rate to new customers. However, that rate, while almost double that of EQ Bank, is only good for five months. After that, it reverts to an amount similar to most of the Big Five Banks.
As for fees, you can’t get much cheaper than EQ Bank. With free Interac e-Transfers, no monthly account fees, and no NSF charges, EQ Bank is one of the most cost-effective options.
As mentioned earlier, Tangerine regularly runs promotional offers for its savings and chequing accounts, touting super-high interest rates for a short period of time. However, after the promo period, the rate drops significantly.
While it’s enticing at first, customers are eventually left with a subpar interest rate that doesn’t help their savings effort.
As for fees, Tangerine doesn’t have many. They offer unlimited and free EFTs, no monthly account fees, or Interac e-Transfers. However, Tangerine does charge NSF fees, as well as an inactivity fee, both of which EQ Bank doesn’t.
EQ Bank Vs Tangerine – Accounts Offered
From chequing to savings accounts to investment accounts, let’s examine what each bank has to offer and who comes out on top.
EQ offers the following banking accounts:
- Savings Plus
- Joint Savings Plus
- Tax-Free Savings Account (TFSA)
- U.S. Dollar Account
In addition, EQ Bank also has investment accounts:
- Registered and non-registered GICs
- Retirement Savings Plan (RSP) Accounts
- TFSA Accounts
The cornerstone of EQ Bank is its Savings Plus account. Since the bank does not offer a separate chequing account, it relies on its Savings Plus to act as the hybrid chequing feature. Within it, you can move money in and out, pay your bills, deposit cheques, and do free Interac e-Transfers.
There aren’t any monthly fees associated with this account, and there isn’t a minimum account balance required. In addition, you can connect up to 10 accounts from other banks, and the transfers are free.
The downside to the EQ Savings Plus account is that you can’t withdraw money. In order to get cash, you’ll need to transfer money from your savings account to another linked-up bank. You cannot take money out from an ATM.
Yes! You can link your Tangerine account to your EQ Savings Plus account. This way, you can take advantage of EQ’s high-interest rates but still have access to cash when you transfer money to your Tangerine account.
Through EQ, you can access their Mortgage Marketplace, where you can shop for mortgage products from lenders throughout Canada and find yourself the best rate around.
Unlike other banks, EQ does not offer a credit card, which might be a downfall for some looking to keep all their financial dealings within one bank.
Tangerine offers the following accounts:
- No-fee chequing account
- Savings Accounts including TFSA, RSP, and US Savings Accounts
- Business Savings Accounts including U.S. Savings, Guaranteed Investment, and U.S. Guaranteed Investment
Tangerine also offers investment accounts:
- Guaranteed Investment (GIC), including RSP, Tax-Free, and RIF Guaranteed Investment Accounts
- There’s also TFSA, RSP, Non-Registered Investment, and Retirement Income Fund (RIF) accounts
Tangerine is well known for its no-fee chequing account that includes unlimited debit purchases, bill payments, and Interac e-Transfers. And with access to more than 3,500 Scotiabank ATMs, it’s easy to withdraw your money whenever you need it.
Tangerine’s savings account also includes no fees and doesn’t require a minimum balance. Tangerine regularly touts promotional offers for both its savings and chequing account, usually in the form of increased interest rates.
These promotions are designed to bring in customers. However, the downside is that once the promotional period ends, the high-interest rates new customers were used to often plummet to levels competitive to brick and mortar banks.
In addition to its many savings and investment accounts, Tangerine offers two credit card options, both with no annual fees and monthly money back rewards.
Need a mortgage or a line of credit? No problem! Tangerine offers both, as well as a home equity line of credit if you’re looking to remodel or upgrade your current digs.
These days, having a physical presence isn’t necessarily as important as an online one. While EQ Bank doesn’t have any brick-and-mortar locations, it’s easy to contact customer service either by phone, email, or through an online chat.
You can download the mobile app and use it to do pretty much anything – check your balance, make transfers or pay bills. It’s makes banking super convenient. Plus, it’s easy to use.
Tangerine doesn’t have any brick and mortar locations but if you need in-person customer assistance, there are pop-up locations and kiosks located around the country.
Similar to EQ Bank, Tangerine offers a mobile app designed for easy customer access. In addition, Tangerine relies on nearly 3,500 Scotiabank ATMs for their customer’s use, as well as 44,000 worldwide.
This one ends in a tie. Both offer easy-to-use and understand mobile apps and top-notch customer service. While you have access to ATMs with Tangerine, because you can link up other bank accounts to your EQ one, it’s just as easy to withdraw money from those.
While there are many similarities between the two banks, their differences helped me make my decision. While Tangerine offers more account options, the significantly higher interest rates and low fees made EQ Bank the winner. If you’re still on the fence, here’s how to determine which bank is right for you.
- You’re looking to earn a significantly higher interest rate than other banks.
- You already have a chequing or savings account at another bank you can link to your EQ Savings Plus Account.
- You’re not interested in lots of account options or need a credit card.
- You want a separate chequing and savings account at the same financial institution.
- You want to keep all your financial products (chequing and savings accounts, credit cards, mortgages) in one spot.
- You’re concerned about the lack of physical locations. Tangerine offers pop-up locations for customer service solutions.
For more information, visit Tangerine’s website.
While both banks have pros and cons, the fact that EQ Bank can generate more interest income and fewer fees than Tangerine is reason enough. However, choosing a bank is a personal decision that you must research.
Ultimately, the decision will come down to which features are most important and what works out for you.