Equitable Bank Review – Canada’s Best Digital Bank in 2024

EQ Bank has become a top pick for Canadians looking for great interest rates and an easy-to-use online banking service.

I’ve banked at a traditional institution practically my whole life. However, I swapped exclusively to Equitable Bank in 2023 and couldn’t be happier. I’m saving money, getting better customer experience, and ultimately putting more money in my pocket.

I appreciate the platform so much that I felt an in-depth review of Equitable Bank would provide a ton of value to readers.

This review aims to thoroughly analyze the various features, benefits, and potential drawbacks of choosing EQ Bank for your personal finance needs.

However, it is essential to consider all aspects of EQ Bank’s accounts before making a final decision. What I find attractive about the platform may be completely irrelevant to you, and vice versa.

This review will delve into topics such as the account types available, the platform’s ease of use, customer support, security measures, and how EQ Bank compares to its competitors in the Canadian banking landscape.

What is EQ Bank?

EQ Bank is a digital bank in Canada that has been making waves in the banking industry with its innovative approach to financial services. As an online-only bank, it strives to provide convenient and competitive products to its customers.

Equitable Bank is a Schedule I bank, which means it is a domestic bank allowed to accept deposits and is subject to federal regulation.

Additionally, EQ Bank customers’ deposits are insured by the Canada Deposit Insurance Corporation (CDIC), providing a level of security and peace of mind.

There is absolutely no question that Canadians are getting fed up with paying high fees when it comes to their banking. As a digital-only bank, EQ Bank operates without physical branches, resulting in cost savings that can be passed on to its customers in the form of higher interest rates and no-fee banking.

So, you can see why the company has exploded in popularity. The company has grown from around 95,000 customers in 2019 to over 370,000 as of the end of 2023. It’s a crazy growth story that is surely just getting started.

Let’s dive into the company’s account offerings to see if they have an account for you.

The lowdown of this Equitable Bank review

If you’re not interested in reading this comprehensive review where I dive deep into Equitable Bank and instead just want the lowdown on its features, here is a summary.

Pros:

• Industry-leading High-interest savings accounts: EQ Bank offers one of the highest interest rates on their savings accounts in Canada, allowing customers to grow their savings at an accelerated rate.
• No fees: The bank operates primarily online, allowing them to minimize overhead costs. This results in no monthly fees or transaction fees for their account holders.
• Unlimited transactions: EQ Bank customers can enjoy the convenience of dealing with unlimited transactions without incurring additional charges.
• User-friendly platform: Their online banking platform and mobile app are easy to navigate and user-friendly, making it a breeze for customers to manage their accounts.
• Free ATM Withdrawals: Unlike other digital banks that only allow free withdrawals at their parent company ATMs, Equitable will refund your ATM withdrawal fees anywhere in the country.
• Joint Accounts: Arguably the easiest way to set up a joint account in Canada.

Cons:

• Limited product offerings: EQ Bank primarily focuses on savings accounts and Guaranteed Investment Certificates (GICs). They do not offer a full suite of financial products like credit cards, loans, or investment accounts.
• No physical branches: As a digital bank, EQ Bank has no physical branches for customers to visit. This may be a drawback for some users who prefer face-to-face banking or require teller services, but is an advantage for those who want higher GIC rates, as the bank can typically offer them for this reason.
• Lack of business accounts: EQ Bank currently only offers personal accounts, meaning individuals looking to open business accounts must explore other financial institutions.

Banking Account Offerings

Equitable Bank Personal Account

EQ Bank offers a high-interest bank account that combines the benefits of both savings and chequing accounts. Let’s go over a recap of some of the benefits of an EQ Bank Personal Account (formerly Savings Plus Account), one that I feel is one of the best savings accounts in the country:

• You get 2.5% interest on the balance in your account.
• If you set up a pre-authorized deposit, they’ll give you an additional 0.5%, bumping it to 3%.
• There is no minimum balance.
• Combined with the EQ Bank Card (we’ll talk about this later), you get free ATM withdrawals and cash back.

This account allows customers to earn a competitive interest rate on their deposits while enjoying features like unlimited free Interac e-Transfers, bill payments, and mobile cheque deposits. 

Additionally, customers can use this account to manage their investments in GICs, TFSAs, and RRSPs.

Why doesn’t Equitable Bank offer chequing accounts?

Although EQ Bank does not offer traditional chequing accounts, the Personal Account mentioned earlier serves the same purpose with added benefits. 

I personally just combine a Personal Account with my EQ Bank Card and credit card to make my everyday purchases. I have direct deposit set up to my Savings Account, which is where I fund my card and pay my credit card from.

This unique account provides flexibility for everyday transactions, such as paying bills, making purchases, and receiving funds without compromising on high-interest earnings.

There is no hurdle there used to be with digital banks. They’re so easy to switch to; Canadians are doing themselves a disservice by not swapping.

Joint Personal Account

EQ Bank’s Joint Savings Account offers the same features and benefits as their regular Personal Account but is designed for two individuals. 

This joint account allows both account holders to access the funds, make transactions, and manage their finances together. For more efficient investment management, it can also be linked to registered accounts like TFSAs and RSPs.

I utilize a Joint Personal Account with my wife. We contribute a particular monthly amount to the account, which covers our mortgage payments, bill payments, and any other emergencies.

The main difference with this account was how easy it was to set up. Setting up a joint account with a major institution was a nightmare. We needed to visit the branch, provide documentation, etc. With Equitable, I sent my wife an email invitation to access the account, she clicked accept, and it was all good.

EQ Bank US Dollar Account

For customers looking to manage their finances in U.S. dollars, EQ Bank offers the US Dollar Account. 

This account allows clients to hold, deposit, and withdraw funds in U.S. currency without worrying about fluctuating exchange rates. 

This account is a game-changer for me as a Wealthsimple Trade client. Instead of paying Wealthsimple’s high currency exchange fees, I simply utilize this USD account and transfer USD directly to Wealthsimple.

Although EQ Bank’s USD account does not offer the same high interest rates as the Personal Account, it still provides a convenient and cost-effective way of managing U.S. dollars for personal and investment purposes.

Business Accounts (Coming Soon)

EQ Bank is continually working to improve and expand its offerings for customers. They’ve hinted at potentially launching Business Accounts soon, which could cater to the needs of small business owners.

I, for one, am pretty ecstatic at the idea of a business account from Equitable. At this point, my business account is through Royal Bank. We make no money on our balance and pay monthly fees plus charge fees. 

I imagine when this business account comes out, it will not only be zero-fee, but you’ll also earn interest on your business balance.

The day these accounts come out, I’ll be moving our business to Equitable.

They currently have a waitlist; you can join it here if you’re interested.

The range of account offerings from EQ Bank, including the innovative Personal Account, Joint Personal Account, USD Account, and potential Business Accounts, cater to the diverse needs of Canadian customers. 

Combining high interest rates, flexibility, and investment management capabilities, EQ Bank aims to provide a comprehensive and user-friendly banking experience.

Investment accounts

EQ Bank offers a variety of investing account options for customers. Are they the best option for someone looking to buy stocks, bonds, mutual funds or ETFs? No. But they’re not intended to be that way.

The investment accounts with Equitable Bank will be for those who want to either buy fixed-income investments like a GIC or are simply looking to save money for a short-term financial goal.

This section will discuss the features and benefits of the following accounts: TFSA Account, RRSP Account, GIC Accounts, and FHSA Account.

The Tax-Free Savings Account (TFSA)

The Tax-Free Savings Account (TFSA) is a popular choice among Canadian investors. EQ Bank’s TFSA allows clients to save and invest their money tax-free. Equitable’s TFSA savings account is perfect for those looking to store money for the short term.

With a competitive interest rate, this account is an excellent option for those looking to grow their savings. Ultimately, Canadians should buy stocks or ETFs in their TFSA. But, if you want to purchase GICs or even hold them in cash and earn interest, EQ Bank is an excellent option.

With an EQ Bank TFSA, you’ll unlock:

• No monthly fees
• Flexible contribution and withdrawal rules
• No taxes on interest, dividends, or capital gains

The Registered Retirement Savings Plan (RRSP)

A Registered Retirement Savings Plan (RRSP) is designed to help individuals save for retirement while deferring taxes on their contributions and investment returns.

I won’t go too in-depth on the strategy of an RRSP in this article. However, the end goal is to contribute to it while you’re paying high levels of taxation and withdraw from it when you’re paying low levels of taxation. So, unlike the TFSA, which is practically suited for everyone, the RRSP is a little more individual-specific.

EQ Bank’s RSP savings account offers a high interest rate, making it a solid choice for long-term planning.

• Long-term savings goal
• Tax-deductible contributions
• Tax-deferred growth on investments

EQ Bank GICs

Guaranteed Investment Certificates (GICs) provide a safe and secure way to invest your money, as the principal and a guaranteed interest rate are protected. 

EQ Bank offers GIC Accounts with various terms and competitive rates, and you can also buy them in USD.

It is highly unlikely you will see a major institution like a major Canadian bank match the interest payments you’d get from an Equitable Bank GIC. This is because the digital-only nature of Equitable Bank allows them to offer higher interest on their products due to the fact they have fewer expenses as a result of having no physical stores.

Of note, the rates below could have fluctuated since the last update, so please check the website itself for the most up-to-date rates.

First Home Savings Account (FHSA)

The First Home Savings Account (FHSA) is a unique savings account that can be used to make a down payment on your first home. This is a very new product, one that the Government of Canada rolled out in 2023 in an attempt to make it more affordable for Canadians to buy a home.

Although I see it as a minor solution to the housing crisis here in Canada, those looking to buy a home have almost no reason not to take advantage of it.

EQ Bank’s FHSA combines the features of a savings account and a GIC to create an attractive product for new home buyers.

• Competitive interest rates
• Tax-free growth for savings intended for a down payment
• Funds locked in for a predetermined term

Equitable’s mortgage and other loan offers

Mortgages

EQ Bank offers competitive mortgage options for customers who are looking to purchase a home. The bank offers fixed and variable-rate mortgages, often at rates significantly below the major institutions.

Would I say Equitable has the best mortgage offering around? No, not necessarily. In the few mortgages I have gotten, I’ve found other smaller alternative lenders often offer better rates.

However, they still have an outstanding suite of mortgages, and it is possible that I just happened to be in the right place at the right time to find cheaper.

Customers can also benefit from EQ Bank’s online resources, such as mortgage calculators and guides, to help them make informed decisions. 

Additionally, the bank provides pre-approval services, enabling individuals to house-hunt with confidence, knowing they have access to financing.

Equitable Bank reverse mortgage

A reverse mortgage is a type of loan available to homeowners, allowing them to convert part of the equity in their home into cash. It is a newer product offered by Equitable Bank, but one that is rapidly growing in popularity.

The unique aspect of a reverse mortgage is that, unlike a traditional mortgage, where the homeowner makes payments to a lender, a reverse mortgage allows the homeowner to receive payments from the lender.

The amount that can be borrowed depends on the borrower’s age, the home’s value, and the interest rate. The homeowner can choose to receive the funds as a lump sum, fixed monthly payments, or a line of credit. 

The loan does not need to be repaid until the homeowner moves out, sells the house, or passes away. The home is usually sold at that time, and the proceeds are used to repay the loan balance and interest. 

Reverse mortgages can be complex and may have various implications, so it’s crucial for homeowners to understand all aspects and consider seeking advice from a financial advisor before proceeding. 

Home equity line of credit

EQ Bank also offers its Home Equity Line of Credit (HELOC), allowing homeowners to leverage the equity in their property as a form of revolving credit. HELOCS are commonly used to fund home renovations, debt consolidation, and other major expenses.

HELOCs are also typically lower-interest products, as the bank has the client’s home up as collateral. So, you’ll pay much less interest on a HELOC than you would a credit card.

The payments can also be interest-only, unlike a credit card, which requires paying a portion of interest and principal.

Depending on your home value, the equity within it, and your overall personal credit score, this could change the amount you’re approved for or even your payment setup. So, make sure to read over the fine details prior to committing.

Fees and balance requirements

One of the key features of EQ Bank’s Personal Account is the no-fee structure. Customers benefit from not having monthly and transaction fees, making it an attractive option for those looking for a cost-effective way to save.

When I was with a traditional bank, I paid $9.99 a month just to have the account open. Now, I almost earn that amount on my chequing account with Equitable Bank. I’ve gone from paying $120 a year to having an account open to earning $120 a year with Equitable, a swing of $240!

Moreover, EQ Bank does not impose a minimum balance requirement for their Personal Account. This makes it more accessible for individuals who are just starting to save or those who may not have a large amount of money to deposit initially.

There are no fees for e-transfers, bill payments, or depositing cheques.

Plus, you’re allowed to make as many transactions as you want with the account. You’ll never be charged for them.

EQ Bank’s digital features that set it apart

Equitable’s desktop and mobile applications

EQ Bank offers a user-friendly mobile app for both iOS and Android devices and a fully functional online banking platform through its website. With the app, customers can conveniently manage their accounts, pay bills, transfer funds, and more.

The app is straightforward to use and functions much like any other major banking application. Whenever I need money on my EQ Bank Card (more on that below), I simply log in and select how much I want to add to the card, and it’s done instantly.

Sure, you have to fund this pre-loaded Mastercard. However, it is a minor inconvenience considering the other benefits.

Money transfers

EQ Bank provides several money transfer options for its customers. Interac e-transfers are a popular choice for domestic transactions, allowing users to send and receive money securely and quickly. 

Furthermore, EQ Bank offers international money transfers through its partnership with Wise. This third-party service allows for cost-effective and efficient transfers to foreign accounts in various currencies.

EQ Bank Card

The EQ Bank Card is a relatively new product that changed the dynamics of Equitable’s savings accounts.

Prior to the EQ Bank Card, it was pretty inconvenient to spend money inside of your Equitable accounts. Sure, you earned a high-interest rate on your savings, but I am still stuck with a traditional bank just for easy access via a debit card.

Before the EQ Card, the only way to easily spend money inside these accounts would have been on a credit card and then pay off the bill with your account.

However, as soon as the Equitable Card came out, I immediately transferred to EQ Bank.

You’ll earn 0.5% cash back on purchases made with the card, and although it is a pre-loaded Mastercard, one you’ll have to keep topping up as balances are reduced, it is super easy to do so in a single click on the app, so I view this as a non-issue.

I believe this card changed the game regarding digital banking, and many other cards have followed since.

Additional functionalities

Equitable refunds for all ATM withdrawals in Canada

You don’t need to worry about the fact that Equitable doesn’t have a physical branch. That is because they’ll refund any ATM fees you incur when trying to pull money out in Canada.

That means no matter if you go to a major institution that charges $2 a withdrawal or a shopping mall ATM that charges $5, they’ll cover the transaction for you, making accessing your money a breeze.

All the withdrawals are made using the EQ Bank Card, which is accepted at various ATMs across Canada.

Deposit and protection services

One of the main issues many people have with digital banks is that they feel they are riskier than the major institutions. However, this couldn’t be farther from the truth.

Being a member of the Canada Deposit Insurance Corporation (CDIC), EQ Bank provides deposit insurance for its clients. This insurance covers eligible deposits up to $100,000 per account.

Customer experience

Clients can reach out to the bank through phone, email, or live chat, ensuring their concerns are addressed efficiently and professionally. EQ Bank values the customer experience and consistently strives to improve its services.

I’ve never really had to wait that long to get a hold of someone at Equitable. In fact, I found the experience much easier than when I banked with a major institution. Despite having lower staff levels and no physical branches, it was significantly easier to deal with Equitable.

Customer security

The bank employs advanced encryption technology to protect clients’ personal information and financial transactions.

One key measure is the use of advanced encryption technology, which safeguards online communication by encoding data so that it cannot be intercepted and read by unauthorized individuals.

Another important feature is the two-factor authentication (2FA) process that has been put in place for account access. When customers log in, they must not only enter their password but also verify their identity via a unique code sent to their registered mobile device or email.

For me, I enabled biometrics, which means I can simply scan my fingerprint in place of the code sent to my number or email. I’d actually view this as a higher level of security than an emailed code.

Moreover, EQ Bank employs advanced fraud detection systems that monitor transactions for any unusual patterns or suspicious activities. If any such activity is detected, the bank’s security team is immediately alerted to investigate the matter and take appropriate action.

In addition to these technological safeguards, EQ Bank also promotes customer awareness of potential security threats. 

They advise customers to keep their account information confidential and to practice strong password habits, such as creating complex passwords and changing them regularly.

Opening an account with EQ Bank involves a soft credit check, which does not affect the applicants’ credit score. By performing this check, the bank ensures the customer’s financial health and helps applicants make informed decisions about their banking needs.

My opinion on Equitable compared to other digital banks

Comparison with Tangerine

I’d view Equitable as a step above Tangerine in the core areas that many Canadians would view as the most important. Let’s look at the overall benefits of Equitable versus Tangerine:

• Equitable has free ATM withdrawals countrywide. Tangerine is only free via Scotiabank ATMs
• Equitable offers higher interest rates on their savings accounts
• Equitable offers free foreign exchange

However, Tangerine does have a few distinct advantages if they appeal to you:

• Business accounts, although I expect Equitable to have these out soon
• Better investment offerings
• Better credit card offerings

For Canadians simply looking to get more out of their personal savings, I’d be choosing Equitable over Tangerine.

Comparison with Simplii

Much the same as Tangerine, I’d view Equitable as a league above Simplii in many ways.

• Free ATM withdrawals from Equitable. With Simplii, you get them free at only CIBC ATMs
• Equitable offers higher interest rates on their savings accounts (Simplii is even worse than Tangerine)
• Simplii has no business accounts (much like Equitable at this point)

The one edge I would give Simplii is that they have a wider suite of credit card products if you’re looking to get one.