Best Online Bank Accounts In Canada For June 2024

To create this list, Forbes Advisor Canada analyzed 239 chequing accounts and 122 savings accounts at 39 financial institutions, including a mix of traditional brick-and-mortar banks with accounts that can be managed online, online-only banks and credit unions with online accounts. We ranked each account on 17 data points within the categories of fees, access, customer experience, digital experience, minimums and balance needed to avoid the monthly fee.

The following is the weighting assigned to each category:

• Fees: 40%
• APY: 30%
• Digital experience: 10%
• Customer experience: 10%
• Minimum deposit requirement: 5%
• Minimum balance to avoid monthly fee: 5%

Specific characteristics taken into consideration within each category included monthly fee, ability to waive the monthly fee, overdraft fee, NSF fee, other fees, ATM network, branch access, Better Business Bureau rating, Trustpilot rating, live chat availability, mobile app ratings, online bill pay availability, online banking access, minimum deposit requirements and minimum balance requirements.

Online accounts offering no or very low fees scored the highest, as did those offering interest on your balance, low minimum requirements and high customer service and digital experience scores. To appear on this list, the online account must be nationally available.

When we talk about online bank accounts we’re not talking about being able to access your bank account at your local brick-and-mortar bank online through the bank’s mobile app or website. Instead, we’re talking about bank accounts from banks that don’t have physical locations and only exist online. Since these banks don’t have brick-and-mortar locations, they don’t have as many overhead costs as traditional banks, which theoretically allows them to pass those savings on to their customers.

Online bank accounts or, more accurately, bank accounts offered by banks that are online-only, are characterized by accounts with no fees, such as no monthly or transaction fees, and higher interest rates on savings accounts, as well as chequing accounts that also generate interest on deposits, which is very rare in Canada.

Accounts offered by traditional banks, or brick-and-mortar banks with physical branch locations, usually have monthly and transaction fees, require a minimum balance to waive at least the monthly fee and don’t offer interest rates on savings accounts that are as high as their online-only competitors. Traditional brick-and-mortar banks also don’t offer chequing accounts that generate interest on deposits that increase the account balance of the holder.

There are various types of bank accounts available from online-only banks.

• High-interest savings accounts. High-interest savings accounts offer higher-than-average interest rates on balances, which increases the amount of money in the account on an annual basis without the account holder putting in more money.
• Chequing accounts. Chequing accounts allow you to do your everyday banking where you deposit your paycheque and pay your bills. It should be noted though that not all online-only banks offer a debit card with their accounts or ATM access. Instead, you need to transfer your money to an account at a bank with local, physical branches to withdraw cash.
• Joint accounts. Joint accounts are chequing or savings accounts that can be shared between two or more people.
• Hybrid accounts. These are accounts that offer some of the features of a chequing account such as preauthorized payments and online bill-paying capabilities, but also features the attributes typically associated with a savings account like a high-interest annual percentage yield (APY) that grows your balance. You may even find a prepaid card that you can load with account funds and use anywhere Visa or Mastercard are accepted.
• Tax-free savings accounts. Tax-free savings accounts (TFSAs) allow you to deposit and withdraw funds tax-free up to a predetermined limit for the year that’s set by the CRA.
• Registered Retirement Savings Plan accounts. RRSPs are accounts where tax-free deposits can be made and matched by the federal government as an incentive for saving for retirement. Any contributions up to the contribution limit are only taxed on withdrawal.
• U.S. dollar savings accounts. U.S. dollar savings accounts offer an opportunity to save your U.S. dollars. It’s ideal for those paid in U.S. dollars or who live in the U.S. part-time. Fees are also withdrawn in U.S. dollars.

Online bank accounts have several features that you should keep in mind before you choose the one for you. Here are several features you need to address before you select an online account.

• Fees. Many online bank accounts come from branchless, online-only banks. Without the overhead of a physical location, these banks can pass those savings on to you. Therefore, there’s a real opportunity to save money on bank fees like the monthly maintenance fee.
• APY. Some online accounts generate interest and allow your balance to grow over time. If you want to make money without doing anything, the annual percentage yield, or APY, is a major factor to consider.
• Accessibility. How convenient is it to access your account? The best online accounts have a user-friendly mobile app that allows you to do your banking and deposit your cheques on your phone in addition to desktop online banking access.
• Customer support. What online accounts give you in convenience and accessibility, they often lack in customer service. However, there are those online unicorns out there that are great at both and you should be looking for those.
• ATM network. Not all online accounts allow you to withdraw cash. First, you have to transfer your money to a more traditional bank account at another bank before you can take your money out. To avoid this hassle, choose an online account at a bank or credit union with a robust ATM network.

Canadians chose online accounts because they come with many advantages, including the following:

• No fees. Many online accounts come with truly no fees since online-only banks don’t have the overhead of their traditional counterparts.
• Convenience. You can access an online account from anywhere and never have to waste time travelling to and showing up in person at the branch.
• Unlimited transactions and transfers. Some online accounts deliver the holy grail of no excess transaction fees, allowing you to transfer your money between banks or send money via Interac e-Transfer to your heart’s content.
• APY. More online bank accounts offer an annual percentage yield on balances, even on chequing accounts, which is exceedingly rare in Canada when it comes to traditional bank accounts.
• Mobile app. Online accounts always allow you to bank on your phone or tablet, so you don’t need to boot up your desktop computer just to conduct basic banking operations, like sending an e-transfer or depositing a cheque.
• Accessibility. Online accounts can be more accessible in some ways for people who can’t easily travel to a bank, (ie. people in rural areas, with mobility issues, with no transportation or the elderly) since they don’t have to conduct financial business in a branch.

While online bank accounts are how most Canadians bank in 2024, they aren’t always the best option and come with several disadvantages.

• No debit card. Some online-only accounts come with no debit card, so you can’t access your money in the physical world (or make purchases) until you transfer your money to a bank account that has a debit card.
• No ATM network. Some online accounts don’t have access to ATMs, so you can’t take your money out until you transfer it to another account that is tied to an ATM network.
• Lack of customer service. Some online accounts at online-only banks in particular have low ratings for customer service because these accounts are designed to be cheap and are aimed at those who prefer to manage their money independently.
• Technological barrier to entry. Not everyone has mastered technology (even today) and not everyone can afford a computer, smartphone or internet access. In some ways, this makes banking inaccessible with an online bank account.

Opening an online bank account is simple. Simply visit the website of your chosen online-only bank and click “Open an account.” Once done, you’ll be asked to provide some basic information such as your full name, address, email address, phone number, income level, occupation and more. The website will guide you through the process. However, before you start, you need to make sure you meet the following eligibility requirements.

• You’re a Canadian resident.
• You have a social insurance number (SIN).
• You are the age of majority in the province and territory where you live.

You may also need to provide a scan of your government-issue ID, so that the online bank can verify your identity under Canada’s Know Your Customer (KYC) protocols.

How you use an online bank account depends on your financial goals for it. You may need a cheaper chequing account to deposit your paycheque in or pay your bills from. You may instead want a higher interest rate on a savings account than you can get anywhere else or you may want to plan for your retirement by opening an RRSP or save for a particular goal with a TFSA. Plus, many online accounts allow joint accounts that allow you to share accounts with multiple people and you can open multiple accounts under one banner for specific purposes like saving for a vacation, a car or post-secondary education.

Here are some of the leading branchless banks you will find in Canada.

• Alterna Bank
• Oaken Financial
• Canadian Tire Bank
• EQ Bank
• Motusbank
• Simplii Financial
• Manulife Bank
• Tangerine
• PC Financial
• Wealthsimple
• Neo Financial
• WealthOne Bank of Canada
• KOHO
• Wise
• Motive Financial
• Saven Financial
• LBC Digital

No matter where you find your digital bank, you should be aware that some are owned by traditional brick-and-mortar banks, including some of the “Big Six” banks in Canada. Depending on who you are you may see this as an advantage since you will likely have access to the larger bank’s ATM network at no extra cost and you will be protected if the online bank goes under since your funds will be insured by the Canada Deposit Insurance Corporation. You may also receive the same standard in customer service that you get from their parent bank. It can be a drawback though if you truly want to feel independent and not tied to larger corporations when you bank. You may also feel there isn’t much variation when it comes to fees between the online-only bank and its larger parent.

Online Banks Owned by Brick-and-mortar Banks

• Tangerine is owned by Scotiabank
• Simplii Financial is owned by CIBC
• LBC Digital is owned by Laurentian Bank
• Oaken Financial is owned by Home Bank, a subsidiary of Home Trust Company
• Motusbank is owned by Meridian Credit Union

Online Banks Owned by Retail Corporations

In at least two instances, two well-known retailers own a online-only bank:

• President’s Choice Financial or PC Financial is owned by the Loblaw Companies supermarket chain
• Canadian Tire Bank is owned by Canadian retailer Canadian Tire Corporation Ltd.