Online-only banks for newcomers in Canada-Tangerine vs. Simplii vs. EQ

There’s no one-size-fit-all solution here but Tangerine is a good start

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Why online-only banks?

Convenience

The time and money you spend on your trips to the bank branch can be spent on something else valuable.

Remember those times you went there only to realize the branch is closed or you left an important document at home?

No more!

Remarkedly, I moved to Canada just before the Covid-19 pandemic causing all brick and mortar banks to close. Tangerine (and Canada Post of couse) saved me this time!

Better rates and lower or no fees

Future proof

As online-only banks saves a lot of costs from operating physical branches, they can invest more in innovations, thus improve their service quality.

Conventional banks are inefficient and sluggish and will definitely shrink or even shut down in the future. That’s my personal prediction. Not saying it will happen overnight though.

Are they safe?

Yes, your account is insured up to $100k for Tangerine for example.

Background

  • I use an Android phone and check my banking apps everyday so the Android app quality matters, a lot
  • TransferWise has made international banking painless for me for years. It was super convenient (fast, transparent and reasonably cheap) to put some Canadian dollars and USD into my TransferWise borderless accounts. Once my first Canadian bank account is ready, there was no hassle moving money into it

How much can one keep TransferWise borderless accounts?

It depends on a lot of factors, check out the FAQs here for more details. My friend who is a Vietnamese citizen living in Vietnam says he has had no problem keeping USD50,000 in his TransferWise USD account. That should be enough for your purpose of moving to Canada, right?

Overview

I’ll be comparing the 3 banks’ checking accounts only, specicially:

On-boarding

There are 2 steps for all of these 3 banks:

Step 1. Sign up online. The forms are short, simple and clear.

Step 2. Verify your identity at a Canada Post location. You’ll need 3 things

a) The DSS code/ barcode sent to you in an email

b) A photo ID e.g. passport, driver license, PR card

c) A proof of address e.g. hydro, internet bill

It’s was very fast and easy with both Tangerine and EQ bank. An email with the DSS code and instructions were sent instantly after I complete the registration process online.

Notes: EQ Bank requires an existing bank account in Canada so it certainly cannot be your first bank account in Canada.

Sipmlii poor on-boarding

  1. I was stuck during Simplii onboarding process as its website did not allow me to answer “0” for “How many months have you lived at the current address” question.
  2. To make it worse, it took more than 24 hours for Simplii to send me the same next-step email that Tangerine and EQ bank did instantly)
  3. There’s an unit number 2 in in my address which is reflected in all of my bill. I may have missed it during the registration process (you know application users and humans make mistakes) but there’s no way to login and correct it like I did with Tangerine. I was left with no choice other than restart the whole process over again!

Winner

Tangerine. It ended up being my first bank account in Canada ever. I appreciate it even more because .

Android app user experience

Tangerine

Pros

Since the range of Tangerine’s services is much wider than EQ bank, their app have tons of features. There doesn’t seem to be anything missing compared to a conventional bank

Cons

  1. Laggy/ unresponsive UI. Their UX seem to be web-based as opposed to native Android

2. It’s neither secure enough compared to traditional banks like TD or mobile-only challenger bank like Monzo

  • 6 digit only
  • When I call customer support line, I was required to put in the same PIN using the phone keypad. The end result is big and clearly visible to anyone within ~3m diameter around me!

3. Tangerine doesn’t automatically suggest me to enable fingerprint log in like most apps e.g. TD, EQ bank not to mention Monzo and co.

4. Cluttered user interface especially the landing screen

Simplii

Pros

  1. Native Android UX so smoother than Tangerine

Cons

  1. N/A — The on-boarding process is so poor I’ve never completed it hence never use their app

EQ bank

Pros

  1. Native Android UX

Cons

2. Nothing so far

Winner

EQ bank

Economy

All these 3 cost nothing for their checking/ hybrid accounts

Winner

EQ bank. Its straightforward 2.0% interest rate is simply the best in Canada, not just among the 3 online banks we are discussing.

Bonus points

TransferWise’s international transfer engine is integrated into EQ bank app

Conclusion

I’d recommend you use a combination of bank accounts

Preparation before moving

  1. Sign up with TransferWise. If you sign up using this link you can transfer CAD800+ for free the first time

2. Put some CAD and optionally USD into your TransferWise borderless account

First step

open a Tangerine account, keep a couple of thousands or whatever you think you’ll need for day to day expenses (cash withdrawals and debit purchases)

Second step

open an EQ account, direct your CAD income here, keep 1/4th or 1/5th of your savings here depends on what your diversification strategy is (stocks, real estate, cryptocurrency, fixed deposits etc…)

Bonus step

If you need to transfer USD from outside of Canada to Questrade or other stock brokers here like I did, you’ll need to open a U.S. account with a a traditional bank. I ended up using TD U.S. daily checking account, it’s not bad. Haven’t explored other options so can’t compare

P.S. Other online-only banks?

I’ve heard people recommending Motusbank but didn’t check it out seeing a 3.5/5 rating on Google App Store

Other people have made more exhaustive lists for example this one.

Hiring Android engineer shorturl.at/bivJO Clean coder, walker & biker. Hater of inefficiency

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