The rise of online-only banks in Canada has fundamentally changed the banking landscape. Institutions like EQ Bank, Simplii Financial, Tangerine, KOHO, Neo Financial, and Wealthsimple offer many of the same core banking functions as the Big 5 — at zero or near-zero cost. So is there still a reason to pay big bank fees? This guide gives you an honest comparison of online banks versus traditional big banks in 2025.
Online banks (also called digital banks or neobanks) operate entirely — or primarily — through digital platforms without physical branch networks. In Canada, the most prominent include:
The most obvious advantage of online banks is fees — or the lack thereof. While Big 5 banks charge $16.95/month for an unlimited chequing account, the leading Canadian online banks charge $0. This saving of approximately $200/year is meaningful for most households. Over 10 years of banking, that's $2,000+ saved just on account fees, before considering savings rate differences.
Online banks consistently offer higher savings rates than Big 5 banks:
The lower cost structure of online banks means they can pass more interest to depositors. For a $100 savings balance, the difference between 1.5% (big bank) and 3.5% (online bank) is $200/year — on top of the fee savings.
Big banks offer products that most online banks cannot match:
Note that Simplii Financial and Tangerine do offer mortgages, and Wealthsimple offers investing. So the product gap is narrowing, but complex banking needs still often require a traditional bank or credit union.
Online banks have no branches. For Canadians who:
...a big bank with physical locations remains important. For the majority of Canadians who do most banking digitally anyway, the absence of branches is a minimal inconvenience.
EQ Bank reimburses ATM fees across Canada. Simplii Financial and Tangerine use CIBC and Scotiabank's ATM networks respectively, providing extensive free ATM access. KOHO doesn't have a dedicated ATM network but works as a Mastercard. The days when online banking meant limited ATM access are largely over for major Canadian online banks.
A common misconception is that online banks are less secure than traditional banks. In reality:
The key is verifying that any online bank you use is CDIC-member or provincially insured. All major online banks listed in this article meet this standard.
Online banks typically offer customer support through phone, chat, and email — but not in-person. Wait times and service quality vary significantly by institution. Tangerine and Simplii Financial benefit from their parent bank infrastructure. KOHO and EQ Bank have built good reputations for digital customer service. Big banks offer in-person service, which is often preferred for complex or sensitive banking issues.
Many financially sophisticated Canadians use both types of institutions:
This hybrid approach maximizes the benefits of each without paying unnecessary fees.
KOHO offers free banking with no monthly fees and no minimum balance — available to all Canadians. Use code 45ET55JSYA for a bonus when you sign up.
Open KOHO Free — No Fees — Code 45ET55JSYAFor everyday banking (spending, saving, e-Transfers, bill payments), online banks are superior in 2025. They cost less, offer better savings rates, and have improved digital experiences. For complex products like mortgages, wealth management, and business banking, traditional banks remain necessary for many Canadians. The smart strategy is not "online bank vs big bank" — it's using the right institution for each need, rather than defaulting to an expensive Big 5 account for everything out of habit.