Luisa Rollenhagen is a writer and editor who lives in Berlin.
You’re spoiled for choice if you’re looking for an online bank or financial institution that provides services these days. Almost every instituation offers a suite of services ranging from a basic chequing account to personal investment accounts to registered accounts to RRSPs and TFSAs, all at the tip of your fingers. The convenience of online banking is only matched by its low-cost appeal: No brick-and-mortar branches mean that customers often save big time on account fees, with many typical banking fees being eliminated altogether.
But the wide range of choice also means sifting through loads of options, perks, and conditions. While some institutions may function more like a traditional bank, others have a range of financial products big banks don’t typically offer. We’ve compiled a guide comparing two of the most popular online banks in Canada with Wealthsimple, so that you have a comprehensive overview of their accounts, features, and pricing and find the one that’s right for you.
Wealthsimple is an online investment manager that combines smart technology with expert financial advice. We allow you to put your money in a managed portfolio (Wealthsimple Invest), do self-directed trading (Wealthsimple Trade) or put your money in a hybrid high-interest savings/chequing account (Wealthsimple Cash). Wealthsimple has been in business since 2014, and has over $5 billion in assets under management.
About EQ Bank
EQ Bank is the online-only branch of Equitable Bank. a federally regulated Schedule I Bank with total assets under management of approximately $34 billion. It offers a high-interest savings account known as a Savings Plus Account, as well as joint accounts and Guaranteed Investment Certificates (GIC).
Tangerine has been in business since 1997 (it was formerly know as ING Bank of Canada) and is a subsidiary of Scotiabank. It offers a wide variety of accounts, including savings accounts, chequing accounts, and retirement accounts like TFSAs. They also offer mortgages and GICs. It has over $3 billion in assets under management.
Wealthsimple vs. Tangerine vs. EQ Bank general comparison overview
See how Wealthsimple, Tangerine, and EQ Bank stack up in this side-by-side comparison. Your trust is important to us. That’s why we always do our best to be fair and provide complete and accurate information. That being said, we can’t compare every single feature out there and can only guarantee accuracy at the time of writing. To complete your homework, we recommend visiting our competitors’ sites to continue your research.
|Overall rating on Saavynewcanadians.com||4.9/5||4.9/5||4.8/5|
|Transfer fees (to another financial institution)||No||$125 when you transfer your registered investment account to another institution, and $50 when you move your TFSA, RIF, or RRSP to another provider||N/A|
|Products offered||Savings/chequing account (Wealthsimple Cash), personal investment account, trading platform, RRSP, TFSA, RRIF, business accounts, joint accounts||Savings account, chequing account, credit card, GICs, investment account, mortgage, lines of credit, RRSPs, TFSAs, business account||Savings/chequing account, joint accounts, GICs|
Generally speaking, Wealthsimple and Tangerine offer a wider range of financial products and accounts than EQ Bank. EQ Bank doesn’t offer retirement savings accounts like TFSAs and RRSPs, but does offer competitively high interest rates for its savings account. Here’s a more detailed breakdown of every account type:
|Account/product type||Wealthsimple||Tangerine||EQ Bank|
|Savings account||Wealthsimple offers Wealthsimple Cash, a savings/chequing account hybrid: 0.9% interest rate, $0 monthly fee, $0 minimum balance, No withdrawal fees||0.20% interest rate, $0 monthly fee, $0 minimum balance||1.70% interest rate $0 monthly fee, $0 minimum balance|
|Chequing account||See above||$0 daily chequing fees, Up to 0.15% interest rate, withdrawal from 3,500, Scotiabank ATMs nationwide and 44,000 ATMs worldwide through Scotiabank’s Global ATM Alliance||No|
|Personal investment account||$0 Account minimum, Fees: 0.5% on $0-$100,000 and 0.4% for amounts over $100,000, Financial planning/portfolio advice, Automatic rebalancing, Dividend reinvestment, Auto depositing, Socially responsible investing, Halal investing, Free transfer to another financial institution||$25 to open an account, Fees: 1.07%, Financial planning/portfolio advice, Auto depositing, Automatic rebalancing, Dividend reinvestment, Transfer to another financial institution: $50 for FSA, RIF, or RRSP; $125 for registered investment accounts||No|
|TFSA||Yes, same terms as above||Yes, same terms as above||No|
|RRSP||Yes, same terms as above||Yes, same terms as above||No|
|RRIF||Yes, same terms as above||Yes, same terms as above||No|
|Credit card||No||$0 annual fees, Up to 2% rewards, 19.95% interest rate||No|
|GICs||No||Up to 1.25% interest rate||1.80% interest rate on 3-month GICs, 1.50% up to 3 years, 1.80% for 5 years|
|Mortgage||No||5 years fixed at an interest rate of 1.99%||No|
|Line of credit||No||Yes||No|
|Business account||Business investment account available||Up to 0.55% on a business savings account||No|
The bottom line
Wealthsimple and Tangerine offer a wide variety of accounts and financial products, with Tangerine perhaps being the most straightforward “bank,” in the traditional sense of the word. And while EQ Bank offers little variety in terms of financial products, its interest rates on savings accounts are highly competitive and might appeal to those looking to park their money somewhere for short to medium-term goals.
In terms of investment options, Wealthsimple offers you a variety of fund portfolios. Tangerine’s portfolios are created from in-house index funds that seek to replicate indices. Another aspect to keep in mind is the fee structure of both institutions when it comes to investment accounts: Wealthsimple Invest charges a 0.5% management fee. That fee drops to 0.4% if you deposit more than $100k. Tangerine charges a 1.07% fee on their investment funds, regardless of how much you invest. Transfer fees vary by account type at Tangerine. For example, Tangerine charges $125 when you transfer your registered investment account to another institution, and $50 when you move your TFSA, RIF, or RRSP to another provider. There is no fee when you transfer an account from Wealthsimple Invest to another institution. And, if you transfer an account to Wealthsimple Invest, we’ll cover the transfer fees on accounts over $5,000.
Keep in mind that Tangerine also charges an inactivity fee for its savings account: After two years of inactivity, they charge $20 per year for the first 1-9 years. At 10 years of inactivity, there’s a $40 fee and any unclaimed assets are transferred to Bank of Canada. Wealthsimple and EQ Bank do not charge inactivity fees for their savings accounts.
What to consider when choosing an online bank or financial institution
Pay attention to account minimums Choose a provider that makes sense for what you can invest now, and in the future. Some investment providers require you to deposit as much as $100,000 to get started. And, in some cases, you could face nasty penalties for dropping below the account minimum or be forced to close your account.
Watch out for hidden fees Nothing eats away at long-term gains quite like fees. And we’re talking about more than just management fees (though they’re important, too). Account transfers and trading fees in investment accounts can also add up. The best providers are upfront with what it costs to open an account with them.
Look out for human support When you need to make sense of a mysterious number in your monthly statement, nothing compares to talking to a fellow human. In the competition to offer the lowest possible management fees, some investment providers are quick to cut customer support. Before you commit to a provider, see what support is available—you never know when you’ll want it.
Understand how much freedom you have Before you commit, find out what happens if you need to withdraw your funds or want to move on to a new institution and whether there are any penalties involved.
What makes Wealthsimple different from other financial institutions
We do the work for you Using Wealthsimple is, well, simple. If you’re interested in investing, we’ll build you a custom portfolio in just a few minutes that makes sense for your risk tolerance and investment timelines. And we’ll do the maintenance for you, with automatic rebalancing and dividend reinvesting. All you have to do to get started is answer a few simple questions. And if you prefer to have your money more readily available, Wealthsimple Cash provides the perfect place for you to easily access your money while still earning competitive interest.
No account minimums or hidden fees We’re the first investment company in Canada to eliminate account minimums. That means you can start investing with as little as $1. Wealthsimple Invest fees are also low. We charge 0.5% on $0-$100k and 0.4% on anything above $100k. Plus, you can make a withdrawal any time you want. This also goes for our Cash account. So you can always count on your money being there when you need it. Start investing now.
Personal touch Our financial advisors are fiduciaries, which is a fancy way of saying that they have a legal obligation to provide financial advice that’s in your best interest, not ours. They’re standing by to answer your questions and provide support whenever you need it. All you have to go is drop us a line by phone, email or even Skype. Get started now.
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The information on this page was compiled by Wealthsimple in August 2020. In order to uncover this information, we looked at Tangerine’s and EQ Bank’s websites, press releases, and third-party sites. The information collected relates to features and pricing.
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