Neobanks in Canada: EQ Bank, Tangerine, Neo

The Digital Banking Revolution in Canada

Canada’s banking landscape is changing rapidly. While the Big Five banks still dominate, a growing wave of digital-only banks and fintech companies is offering Canadians better rates, lower fees, and more innovative products. These digital alternatives have gained millions of customers by solving problems the traditional banks have been slow to address: high fees, low savings rates, and outdated technology.

The shift is driven by a simple reality: it costs dramatically less to operate a bank without physical branches. No buildings to lease, no tellers to employ, no parking lots to maintain. Those savings can be passed to customers through higher interest rates and lower (or zero) fees. For Canadians comfortable managing their money through a smartphone app, the financial benefits of digital banking are substantial.

EQ Bank: The High-Interest Leader

EQ Bank is the digital platform of Equitable Bank, a federally regulated Schedule I bank and CDIC member. Founded in 2016, EQ Bank has become one of the most popular digital banking options in Canada.

What EQ Bank Offers

Savings Plus Account. EQ Bank’s flagship product offers one of the highest everyday savings rates in Canada — typically 2.5% to 4% with no minimum balance and no monthly fees. Unlike promotional rates that expire, EQ Bank’s rate is their everyday rate. On a $20,000 balance, the difference between EQ Bank’s rate and a Big Five savings rate (0.05%) can be $600 to $800 per year.

GICs. EQ Bank offers competitive GIC rates, often among the best in the market for terms from 3 months to 5 years. You can hold GICs inside a TFSA or RRSP.

Joint accounts and TFSA/RRSP. Full range of registered account options with the same competitive rates.

Free transactions. Unlimited Interac e-Transfers, no monthly fees, no minimum balance, and free bill payments. EQ Bank does not currently offer a debit card for point-of-sale purchases (though this is evolving), so it functions primarily as a savings and bill payment hub.

Who EQ Bank Is Best For

EQ Bank is ideal for your savings, emergency fund, and GIC needs. Many Canadians pair a Big Five or Tangerine chequing account (for debit card access) with EQ Bank for savings — getting the best of both worlds. Because Equitable Bank is a CDIC member, your eligible deposits are fully insured.

Tangerine: The No-Fee All-Rounder

Tangerine is a direct bank owned by Scotiabank. Originally launched as ING Direct Canada in 1997, it rebranded to Tangerine in 2014. As a subsidiary of Scotiabank (a CDIC member), Tangerine deposits are fully CDIC-insured.

What Tangerine Offers

No-fee chequing. Tangerine’s chequing account has no monthly fee, no minimum balance, unlimited Interac debit transactions, and unlimited e-Transfers. You can use any Scotiabank ATM across Canada (over 3,500 locations) without fees.

Savings account. Tangerine frequently offers promotional rates of 5% or more on new deposits for a limited period (usually 5-6 months), reverting to a base rate of 1% to 2.5%. The strategy for Tangerine savers is to take advantage of promotional rates and then evaluate whether to move money when the promotion ends.

Credit cards. Tangerine’s Mastercard offers 2% cash back in two categories of your choice (groceries, gas, restaurants, etc.) and 0.5% on everything else, with no annual fee. It is one of the best free cash-back cards in Canada.

Investing. Tangerine offers index fund portfolios through its Global ETF Portfolios, providing a simple way to invest without picking individual stocks.

Who Tangerine Is Best For

Tangerine is the best option for Canadians who want a complete no-fee banking relationship — chequing, savings, credit card, and investing — all in one place. The Scotiabank ATM access solves the biggest complaint about digital-only banking. It works especially well as a primary daily banking account paired with EQ Bank for long-term savings at higher rates.

Wealthsimple Cash: Investing Meets Banking

Wealthsimple Cash is a hybrid spending and saving account from Wealthsimple, Canada’s largest online investment platform. The Cash account is held at Canadian Western Bank, a CDIC member, so eligible deposits are insured.

What Wealthsimple Cash Offers

Spending account with interest. Wealthsimple Cash pays interest on your balance (rates vary, typically 1% to 4% depending on your Wealthsimple tier) while also functioning as a spending account with a Visa card for purchases.

No foreign transaction fees. The Wealthsimple Cash card charges no foreign exchange markup, making it one of the best options for international purchases and travel. The standard 2.5% markup that most Canadian cards charge adds up quickly for frequent cross-border shoppers.

Round-ups. You can automatically round up purchases to the nearest dollar and invest the difference through Wealthsimple’s investment platform.

Seamless investing integration. Moving money between your Cash account and Wealthsimple’s TFSA, RRSP, or non-registered investment accounts is instant and free.

Who Wealthsimple Cash Is Best For

Wealthsimple Cash is ideal for Canadians who want to combine everyday spending with investing. If you already use or plan to use Wealthsimple for investing in ETFs or stocks, the Cash account creates a seamless ecosystem. The no-FX-fee card is also excellent for anyone who regularly makes purchases in US dollars or other currencies, a common reality for Canadians managing money across borders.

Neo Financial: Rewards-Focused Banking

Neo Financial is a Calgary-based fintech that launched in 2019, founded by the team behind Skip The Dishes. Neo partners with Concentra Bank (a CDIC member) for its savings products.

What Neo Financial Offers

Neo Money Account. A high-interest savings account with competitive rates, no monthly fees, and no minimum balance. CDIC-insured through Concentra Bank.

Neo Mastercard. Neo’s credit card offers cash-back rewards with boosted rates at Neo partner merchants (up to 5% or more at participating retailers). With no annual fee, it competes directly with traditional rewards cards.

Mortgage products. Neo has entered the mortgage market with competitive rates and a fully digital application process.

Partner rewards network. Neo’s distinguishing feature is its network of partner merchants offering enhanced rewards. If your regular spending aligns with Neo’s partners, you can earn significantly more than standard cash-back rates.

Who Neo Financial Is Best For

Neo is best for Canadians who want high savings rates combined with a rewards-focused credit card. If you frequently shop at Neo’s partner merchants, the boosted cash-back rates can outperform most other free cards. The fully digital experience appeals to tech-comfortable consumers who rarely need branch access.

KOHO: The Prepaid Alternative

KOHO operates differently from the other options on this list. Rather than a bank account, KOHO offers a prepaid reloadable Visa card with a connected spending account. KOHO partners with Peoples Trust, a CDIC member.

What KOHO Offers

Prepaid Visa card. KOHO’s card works anywhere Visa is accepted. You load money onto it (via direct deposit, e-Transfer, or bill payment), and spending draws from your loaded balance. Because it is prepaid, you cannot spend more than you have — making it excellent for budgeting.

Cash-back rewards. KOHO offers 0.5% to 2% cash back depending on your plan tier (free, Essential, Extra, or Everything). Higher tiers offer enhanced cash back, price-match guarantees, and coverage for purchase protection.

Interest on balance. KOHO pays interest on your account balance, with higher rates for paid tier subscribers.

Financial insights. KOHO’s app provides spending breakdowns, round-up savings, and budgeting tools that help you track where your money goes — similar to what Finthy offers but built into the card experience.

Who KOHO Is Best For

KOHO is ideal for Canadians who struggle with overspending and want enforced budgeting (prepaid means you cannot go into debt), or for those building or rebuilding credit (KOHO offers a credit-building program that reports to credit bureaus). It is also popular among younger Canadians and newcomers to Canada who may not qualify for traditional bank accounts.

Comparing Digital Banking Options

Making the Right Choice

You do not need to pick just one. Many financially savvy Canadians use two or three digital banks alongside — or instead of — a traditional bank. A common combination:

1. Tangerine or Simplii for no-fee chequing and daily spending
2. EQ Bank for high-interest savings and GICs
3. Wealthsimple for investing and the no-FX-fee card

This three-account structure gives you free daily banking, the best savings rates, and a seamless investing platform — all CDIC-insured, all with no monthly fees. That is a dramatic improvement over the single Big Five account that many Canadians default to.

The key is to start. Open one account today, set up an automatic transfer from your paycheck, and experience the difference. The next module on budgeting will help you decide exactly how much to direct to each account.

Key Takeaways

• Digital banks offer significantly higher savings rates and lower fees than traditional Big Five banks by eliminating branch overhead.
• EQ Bank leads on everyday savings rates and GICs. Tangerine excels as a no-fee all-in-one bank. Wealthsimple Cash integrates spending with investing. Neo focuses on merchant rewards. KOHO enforces budgeting through its prepaid model.
• Always verify CDIC membership before depositing — most major digital banks in Canada are CDIC-insured, but some operate through partner banks.
• You do not need to choose just one: combining two or three digital banks can optimize for daily banking, savings, and investing simultaneously.
• The digital banking shift is accelerating, and open banking regulation will further increase competition and innovation in coming years.

In the next lesson, you will begin Module 2 by learning why budgeting is the single most important skill for building wealth — and why most approaches to budgeting fail.