The debate between online banks and Big 5 banks is one of the most common personal finance questions in Canada. Both have genuine merits. The right choice depends on your banking habits, financial needs, and how you value different features. Here's the definitive comparison.
Online banks trade physical branch access for lower costs and better rates. Big 5 banks provide comprehensive financial services under one roof at a premium price. Neither is objectively better — they serve different needs.
| Feature | Online Banks (KOHO, EQ Bank, Simplii) | Big 5 Banks |
|---|---|---|
| Monthly chequing fee | $0 | $4–$30 |
| Savings rate | Competitive to high | Very low |
| Branch access | None | Nationwide |
| ATM network | Limited/partner | Nationwide own ATMs |
| Mortgage products | Limited (Simplii, Tangerine, Neo) | Full suite |
| Investment products | EQ Bank has TFSA/RRSP/GIC | Full suite |
| Credit cards | Prepaid only or limited options | Full rewards lineup |
| Cashback on spending | KOHO: 0.5%+ | Via separate credit card |
| Deposit insurance | CDIC (most) | CDIC |
| App quality | Generally excellent | Good to excellent |
The most clear-cut win for online banks. KOHO, Simplii, and Tangerine are genuinely free. Big 5 banks charge $4–$30/month unless you maintain $3,000–$6,000 daily balance.
EQ Bank and other online savings accounts consistently outperform Big 5 savings rates. The difference can be hundreds of dollars per year on a meaningful savings balance.
KOHO's cashback on everyday purchases is built into the account — no annual fee credit card needed. Simplifying to one account with built-in rewards is genuinely convenient.
For Canadians who need in-person banking — for cash deposits, certified cheques, notarized documents, or face-to-face financial advice — Big 5 branches are irreplaceable. Online banks can't help you with cash.
Having your mortgage, investments, credit card, insurance, and chequing at one institution simplifies financial management and can qualify you for rate discounts. Big 5 banks bundle these services in ways online banks cannot match.
Mortgages, HELOCs, personal lines of credit, and business loans are primarily available at Big 5 banks and credit unions. Most online banks don't offer lending (Simplii and Tangerine are exceptions with limited mortgage offerings).
The Hybrid Strategy: Best of Both Worlds
Most financially savvy Canadians use both. Keep a Big 5 account for your mortgage, investments, and any complex financial needs. Use KOHO or Simplii for daily spending to eliminate fees. Keep your emergency fund at EQ Bank for the best savings rate. This hybrid approach costs nothing extra and captures the advantages of each.
Yes. EQ Bank is a Schedule I Canadian bank. Simplii and Tangerine are CIBC and Scotiabank subsidiaries. KOHO deposits are held at People's Trust, a CDIC member. All major Canadian online banks are regulated and insured. The "safety" concern about online banks is a legacy concern from before these institutions were established — it's not a valid reason to pay Big 5 fees in 2025.
For Canadians who bank primarily digitally and don't need regular branch visits, online banking is the better financial choice: lower or no fees, higher savings rates, and equivalent day-to-day functionality. For Canadians who need branch access regularly or want all services under one roof, the Big 5 provide a service bundle worth paying for — ideally while maintaining the minimum balance to waive monthly fees.
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