Best online banks in canada

Tangerine vs EQ Bank Comparison 2021

The best online banks in Canada go head to head in this exciting matchup between Tangerine and EQ Bank. EQ Bank is the brainchild of while Tangerine is a subsidiary of Scotiabank.

It is expected that the continuous growth of online banking will attract more online banks into the digital scene because of low maintenance fees, lucrative interest rates, and a rich mobile experience.

Read on to learn about the financial products on offer. Find out how these modern banks compare and contrast to find the best fit for your financial situation and lifestyle.

EQ Bank vs. Tangerine: Quick Look

Tangerine

Tangerine Bank is an online-exclusive digital bank with close to two million customers and C$38 billion assets under management. It was formerly ING Direct before Scotiabank absorbed it in 2012.

ING subsequently became Tangerine in 2014 and has since expanded its financial offerings like savings, chequing accounts, GICS, mortgages, and personal loans. Tangerine accounts are synonymous with low fees and a more than average return on your investment.

EQ Bank

EQ Bank is a top-tier digital bank in Canada that serves as the online banking division of Equitable Bank. While Equitable Bank started in 1970, it wasn’t until 2013 that EQ Bank started to provide online digital banking products.

Some of its offerings include TFSAs, HISAs, and GICs. The online bank also partners with TransferWise, ensuring customers save costs on international money transfers. However, despite its range of services,  EQ Bank doesn’t offer credit card products or chequing accounts.

Why You Should Opt for a Digital Bank in Canada

In stark contrast to physical-only banks, digital banks like Tangerine and EQ Bank operate exclusively in the online space. The significance is that they avoid incurring the overhead cost for items like office supplies, building maintenance, rent, and other sundry expenses.

These savings translate into better banking services for the customer with no-fee accounts, high interest, unlimited free e-transfers, and unlimited withdrawals as standard. The only drawback to suck banks is the inability to visit the bank in person. 

EQ Bank vs. Tangerine: Head to Head

ProductEQ BankTangerine
Chequing accountUnavailable Zero fee accounts
Zero transaction fees
Free Interac e-Transfers
Zero fee access to 3500+ ATMs
Overdraft protection
Savings account Zero fee accounts
Zero fee transactions
1.5% interest rate
Max balance of C$200,000
Zero fee accounts
Zero fee transactions
0.1% interest rate
Welcome bonus and promotional offerings
Guaranteed Investment Certificates 1.25% annually and 1.5% up to five years 0.80% annually and 1.20% up to five years
Miscellaneous GICs Mortgages, loans, GICs, RRSPs, TFSAs, credit cards, etc.

EQ Bank vs. Tangerine: Features Battle

The next step is to look at both banks’ features to determine the best for your banking needs.

FeaturesEQ BankTangerine
Monthly fees Zero Monthly Fees Zero Monthly Fees
Interest ratesNo Chequing Account
1.5% savings interest rate
0.1% chequing account rate
0.5% savings interest rate
Welcome Bonus No welcome bonus Intro offer expires within six months
Debits and Withdrawals Free unlimited Free unlimited
ATM withdrawals No Free Scotiabank ATM withdrawals
Interac e-Transfers Free unlimitedFree unlimited
Automatic depositsYesYes
International money transferYesNo
Overdraft protectionNo Yes
Mobile app YesYes
BranchesNoWalk-in cafes located in Toronto, Vancouver, and Montreal
Card deliveryNoYes
Free chequesNo50 free cheques

EQ Bank vs. Tangerine: Benefits and Drawbacks

EQ Bank

EQ Bank is a subsidiary of Equitable Bank – one of the biggest independent banks in Canada. Customers enjoy HISAs and GICS with a limited selection of other financial services and products.

EQ Savings account comes with zero charges while enjoying 1.5% interest rates amongst other perks like cheap international fund transfers, free Interac e-transfers, and unlimited transactions.

EQ Bank also tops Tangerine in its GIC offerings, with a comparison to be shown below. The drawback with EQ Bank is the lack of a chequing account and no ATM withdrawals. Although new customers do not receive a signup bonus, EQ Bank is the best choice if you enjoy lucrative interest rates and send money abroad daily.

Pros:

  • Zero monthly charges and unlimited free transactions
  • Higher GIC and Savings interest rates
  • Affordable international money transfers

Cons:

  • few financial products and services
  • No chequing account
  • No signup bonus
  • No ATM withdrawals

Tangerine

Tangerine has a wide range of financial services and products, including savings accounts, mortgages, loans, and registered investment products like RRSPs, RRIFs, and RESPs.

The entire line of savings and chequing accounts carry zero charges, free unlimited transactions, signup bonuses, and Interac e-Transfers. Customers can also enjoy the 3500+ Scotiabank ATMs spread out across Canada.

It isn’t all bells and roses for Tangerine due to the poor interest rates on your GICs and savings compared to EQ Bank. Nonetheless, you should consider Tangerine if you enjoy an online bank with various products and a signup bonus.

Pros:

  • Zero monthly maintenance charges and diverse banking services
  • C$200 sign up bonus for savings and chequing accounts
  • A reasonable number of ATMs

Cons:

  • Poor interest rates on GICS and savings
  • No foreign currency money transfer services

EQ Bank vs. Tangerine: GICs

Before proceeding to GICs, it is worth mentioning that HISAs include savings accounts with interest rates over 1.05%. A HISA is a powerful financial tool that guarantees your money’s value against in-pace inflation.

Any HISA below the current inflation rate will slowly lose its value. Because HISAs are non-registrable assets, they have unlimited space for contributions.

Keep in mind these accounts are subject to tax. Earnings on saving are treated as income and, thus, taxable. If you’re not comfortable with CRA taking a portion of your interest, you should consider opening a TFSA.

On the other hand, GICs are interest-guaranteed investments that differ by the maturity date. Some take little more than a month to reach maturity, while others may go up to ten years. In stark contrast to a HISA, GICs come in separate packages.

You can avoid taxes on your GIC by fixing it into a registered GIC like an RRSP GIC or TFSA GIC. The non-registered GICs are standard GICs that mature before getting taxed. There is an apparent disparity in the GIC interest rate between EQ Bank and Tangerine, as seen below:

GIC duration EQ BankTangerine
3 months 2.33% 0.50%
6 months 2.35% 2.00%
9 months 2.38%  2.15%
1 year  2.40% 2.15%
15 months 2.41%  nil
18 months nil 2.20%
2 years 2.45% 2.20%
27 months 2.46% 2.20%
3 years   2.50% 2.20%
4 years 2.55% 2.20%
5 years 2.65% 2.20%

EQ Bank GICs

EQ Bank is in the conversation for the best GIC rates in Canada, with some of the most diverse options for your investment. It offers non-registered GICs ranging from three months up to five years.

The minimum investment is C$100, with investors having the option to appraise the interest rate yearly or at the end of the term. Rates begin at a lucrative 2.33% and increase up to 2.65%.

If you want to buy EQ Bank GICs, you must consider adding the EQ Bank HISA into your plans. Both account packages carry zero maintenance fees.

Tangerine GICs

Tangerine has a diverse array of financial products, including GICs. GICs currently have some of the best rates of any investable assets in Canada, and Tangerine GICs rates start from 0.50% to 2.20%, with a minimum buy-in of C$1.

Your Tangerine GIC has multiple investment options like the Registered Income Plan and Retirement Savings Plan, amongst others. Tangerine GIC remains a viable option for investors who want to diversify their portfolios. A notable drawback is the limited terms compared to EQ Bank.

EQ Bank vs. Tangerine: Fund Safety

EQ Bank and Tangerine are both guaranteed by the Canada Deposit Insurance Corporation. The significance is that your deposits are insured to a maximum of C$100,000 for each type of account, be it chequing, savings, or GIC.

EQ Bank vs. Tangerine: Reddit

Many Reddit users believe Tangerine has an excellent website with a decent mobile app but state that their savings account is a hassle due to the promotional interest rate at +2%, which fizzles out after 3-6 months to a miserly 0.10%.

According to Reddit discussions on this topic, people prefer to take out their cash after the expiration rate and wait till it comes back around before putting their funds back in. There isn’t a need to game the system with EQ Bank because of its stable and lucrative rate.

However, the lack of credit card products makes it difficult for EQ Bank to attract older customers and seniors.

EQ Bank vs. Tangerine: Bottom Line

It is difficult to choose between EQ Bank and Tangerine, considering their apparent strengths and weaknesses. EQ Bank offers the best interest rates but is stunted by its limited product offerings. Tangerine has a more diversified service but has abysmally low rates in comparison. Your best bet is to combine both services to enjoy the best of both worlds.

FAQs

Is Tangerine owned by Scotiabank?

Tangerine is a Scotiabank subsidiary, and as an online bank, it has no physical bank branch.

Which is better, GIC or TFSA?

GICs are the best investment option for Canadians looking for minimal risk and a guaranteed return. TFSAs are a suitable choice for investors looking to harness a tax-free investment portfolio’s strengths, combining high-risk equities with low-risk funds. To eat your cake and have it, consider investing in a TFSA GIC.

Can I lose money on a GIC?

GICs are insured, meaning you don’t have to worry about losing your funds.

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