best online bank in Canada

Tangerine Bank Review: The Best Online Bank in Canada?

Last Updated on October 9, 2020 by Yetunde Akindele

In today’s world, your bank is your financial partner. It doesn’t just keep your money safe, but it also helps you grow it. With so many options to choose from, it can be challenging to choose the right bank for you. Luckily, I am here with a review of Tangerine Bank to help you make that decision. Read through to the end of this post to find out if Tangerine bank lives up to its hype.

Before I get into more details, here’s some background. Tangerine Bank was acquired by Scotiabank back in 2012. Prior to the acquisition, it went by the name of ING Direct Canada. Since this acquisition, the bank has accumulated more than 2 million clients. As a matter of fact, in 2015, it was named one of Canadas’10 most admired corporate cultures by Waterstone Human Capital.

Now, Let’s dive into what features the bank offers.

One of the most unique features of Tangerine bank is that it differs from traditional banks in its offering of banking services that are fully digital. This aligns closely with the bank’s tagline of ‘Forward banking’. Tangerine bank also differs from other digital banks in its provision of Cafes in the busiest locales in Canada namely, Toronto, Vancouver, Montreal, and Calgary. These cafes have associates who are able to assist with financial advice should you have a need.

Become a Tangerine client today

Opening an account with Tangerine Bank is as easy as ABC. You do it straight from any internet-enabled device. You answer a couple of questions and then set up the account of your choice. Following this, Tangerine Bank has partnered with Canada Post for you to do a physical identification of yourself for final account approval.

Similarly, just like any brick and mortar bank, Tangerine bank offers the following services;

  • Savings Account
  • Checking Account
  • Credit cards
  • GICs
  • Business Accounts
  • Investment Funds
  • Mortgage
  • Home Equity Line of Credit
  • RSP Loan
  • Line of Credit
  • Tax-Free Savings Account
  • RSP
  • RIFs
  • Cheque Booklets
  • Bank draft

Tangerine Savings Accounts

Traditional banks just can’t match Tangerine Bank’s saving account. At the time of writing this article, the bank offers a staggering 2.15% promo interest rate (using the promo code EARNMORE) for the first five months of opening a Savings and checking account, after which the interest rate drops down to 0.15%. This is still considerably higher than most banks. Additionally, you can earn up to $200 when you set up your payroll details after opening an account as a first-timer. Granted 0.15% isn’t the best rate out there, but Tangerine Bank makes up for it in other ways. The savings account offers unlimited withdrawals, no minimum balance requirement and according to them, no unfair fees. Account-holders can also use Tangerine’s automated saving plan to deposit a fixed amount into their savings account every month. This can be likened to a digital piggy bank and helps build a good savings culture.

Tangerine Tax-Free Savings Account (TFSA)

The Tangerine tax-free savings account offers the same benefits that other savings accounts offer, but with an added bonus. Account-holders don’t have to pay tax on any collected interest or withdrawals. The bank also offers a promotional 2.15% interest rate (using the promo code EARNMORE) for the first five months of opening a savings account and chequing account.

RSP Account

The RSP Account stands for “retirement saving plan.” It offers a standard 0.15% interest rate. The current promo rate of 2.15% (using the promo code EARNMORE) also applies for the first five months, just like the TSFA. Tangerine Bank also offers spousal RSP accounts for couples who want to split their retirement income.

Become a Tangerine client today

RIFs

Tangerine Bank offers a Retirement Investment Funds account that allows you to get paid an income from your retirement savings. You are able to convert your RSPs to RIFs with Tangerine bank. It has all of the benefits of Tangerine savings account. However, at the moment of writing this article, the interest rate is 0.25%.

US$ Savings Account

This account currently gives a rate of 0.20% and similar to the regular savings account, it has no service charges or unfair fees. This account allows you to save your US funds with Tangerine bank.

Children Savings Account

The Tangerine Children Savings Account gives kids some financial sense at a young age so that they have some security when they become adults. This could also serve as a tool to teach your kids money management. Children savings accounts make up to 0.5% per annum on their investments. Currently, the interest rate is 0.30% and it comes with no monthly fee and no minimum balance.

Business Savings Account

Tangerine bank does not offer a business checking account. They do offer a business savings account to help you park your business savings while earning an interest rate of up to 0.55%. It requires no monthly fee or minimum balance. However, you do need to have a Business chequing account with another institution for you to qualify.

GICs

Tangerine bank offers regular Guaranteed Investment Certificates. They also offer GICs in the following areas; RSP, Tax fee GICs, RIFs GICs and US$ GICs

Tangerine Chequing Account

Tangerine offers a chequing account with no fees, unlimited withdrawals, and an interest rate of up to 0.15%. One particular downside is that the interest rate isn’t static; you need a minimum balance of $100,000 for a 0.15% interest rate and $50,000 for a 0.10% interest rate.

With this account, Interac transfer and Tangerine email money are both free. This allows you to perform transactions easily without being charged. Tangerine Bank also throws in a free cheque book as a gift for opening an account! Eligibility for this is with your first cheque book request.

Withdrawal from your checking account with your debit card can be done for free from Scotiabank ABMs which are over 3500 in Canada. You can also make use of your debit card at about 44000 ABMs globally. This is possible through Scotiabank’s global ATM alliance.

Bank Drafts

Most digital banks do not offer Bank drafts. However, Tangerine with its ‘forward’ way of banking offers Bank draft services. This can be ordered online and couriered to your mailing address or sent to a Tangerine café within 2 to 3 business days. They currently charge $10 for this service.

Money-Back Credit Card

Tangerine bank faces some fierce competition from other banks when it comes to offering no-fee credit cards. However, Tangerine Bank offers a 2% money-back credit card, which other banks seldom offer. See my post on the best cashback credit cards for more details!

Requirements

You’re going to need a minimum annual income of $12,000 for this credit card and a good credit score.

Specifications

When signing up for the credit card, you can choose two categories you want to earn a cashback on. You’ll receive up to 2% rewards on these transactions. Purchases outside of these categories earn you a 0.5% reward, meaning every purchase has a silver lining! The funds are automatically deposited into your credit card balance or your savings account. If you choose the savings account option, you can choose an additional category to receive a 2% reward on.

The card offers additional benefits of purchase assurance and extended warranties on items purchased via the card. An interest rate of 19.95% is charged on purchases and cash advances. New account holders get a promotional 1.95% interest rate for the first six months of opening their accounts.

World Mastercard

Tangerine Bank also offers a second newly introduced credit card, their World Mastercard. You become eligible for the card if you have an annual personal income of at least $60,000 or an annual household income of $100,000. On top of the standard features provided by Tangerine Bank cards, the World Mastercard guarantees you entry into exclusive LoungeKey airports at $32 per visit. Additionally, a World MasterCard gives you up to $1000 in insurance for rental car collisions, extended warranties, or a phone charged to the card.

Tangerine Loans

Tangerine Bank also offers a wide range of loans to its customer base. These include mortgages and HELOC.

Mortgages

Tangerine offers fixed mortgage rates for 1 to 10 years. When you first get a quote from the bank, the bank will hold that quote for the next 120 days even if the rate changes. Another option that Tangerine bank offers is that you can prepay 25% of your annual principal upfront or increase your regular payments by 25% to fast-track your mortgage.

HELOC

Tangerine bank’s Home Equity Line of Credit or HELOC is a debit agreement where the bank uses your home as collateral for a loan. The interest rate is currently 2.35%. These loans make for an easy way to secure a loan for home improvements or other renovation projects.

Customer Care

There are 2 main options to get in touch with Tangerine Banks’ customer care. These are the phone call option and the ‘chat with us’ option on their website and mobile App.

The bank’s customer service team is great over the phone. They offer a 24/7 phone call customer care support usually with a short waiting time and a prompt resolution to issues.

Online Banking

Tangerine Bank is one of the best when it comes to online banking in Canada. Whether you’re on a smartphone, a tablet, or a computer. Tangerine Bank makes online banking very easy. The bank also has a cheque-in feature that allows users to simply take a picture of a cheque to get it deposited.

Tangerine Bank’s online services allow the account holder to view their transaction history, retrieve account statements, pay bills, or top-up their mobile phone balance. You can even directly get into contact with a Tangerine Bank associate to help you if you run into any problems.

Security

The right bank is one that not just holds your money but also protects it. Tangerine Bank does not hold back when it comes to safety. In addition to using the industry-standard, 128-bit encryption and SSL protection, Tangerine Bank also enforces the user to set a custom phrase and a picture that they must identify before they can use their online banking services. There is also the option to answer security questions and to input a pin. Not just these, but Tangerine bank has also shifted all of its cards from magnetic strips to SecureChip Technology, which is much more reliable and secure.

Is Tangerine Bank Worth It?

I have been going on and on about Tangerine Bank, and it may be a little challenging to take in all this information. So, I have summarized it below.

Pros

  • Secure

Tangerine Bank is more secure than your average bank, with its custom picture-phrase verification as well as SecureChip equipped cards. This is a huge plus in my opinion.

  • CDIC

Money deposited with Tangerine bank is insured with the Canada Deposit Insurance Corporation up to $100,000 just like most other banks in Canada. This ensures a safety net for your money in case of bank failure.

  • Convenient

Online banking’s prime purpose is to make banking easier, and cheaper by reducing the banks’ overhead thereby leading to reduced or no fees for banking. This is precisely what Tangerine Bank does. It has an internet banking portal that allows you to do everything, from paying bills to sending money to colleagues all with no monthly fee or minimum balance.

  • No-fee Checking & Savings Accounts

Tangerine Bank offers some great benefits with its checking and savings accounts. These include no monthly fees, unlimited withdrawals, and high-interest rates.

  • Credit Cards

2% cashback in up to 3 categories of your choice with their credit cards, subject to certain terms and conditions. Credit cards also come with no annual fee.

  • Free electronic transfers

Free Interac transfer and free Tangerine bank email money. You can also perform transfer between your bank accounts by linking the accounts together.

  • Free Cheque booklet

They give your first cheque book for free!

  • Bank draft

Unlike most digital banks which do not issue bank drafts, Tangerine bank issues Bank draft which can be ordered online.

Cons

  • No branches

While this isn’t exactly a con, seeing as it is a fully online bank, traditional banking experience has the upper hand on online banking in a few ways. One of them is the sense of security that a physical branch provides. Secondly, an inter-personal banking experience is just different, the bankers at your branch know you and so can offer you good personalized financial advice. You can read my post on Digital banking vs Physical banking for more information.

  • No personal or vehicle loans

If you were hoping to set up your dream bakery or take out a loan for your favorite car, it’s best to opt for another bank. Tangerine Bank does not offer any personal or vehicle loans, which is a huge letdown.

Is Tangerine Bank For Me?

If you’re willing to give up the feeling of a physical bank branch for better interest rates and low fees, then Tangerine Bank is for you. However, if you value face-to-face interactions with people or if you need a personal loan, Tangerine Bank might not be the best choice for you.

Conclusion

With Tangerine bank’s no-fees and high-interest rates, it stands out as one of the top choices right now. I hope that this review will help you decide if Tangerine Bank is for you!

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