How Can an Online Bank Help Me Manage My Money in Canada?

Money’s a crucial part of everyday life. People must have or generate money to pay for essentials, such as food, clothes, and shelter. People also need income to pay for wants, such as entertainment, collectibles, and vacations.

Accessing tools and resources to manage your money can make a difference when you’re struggling from paycheck to paycheck to cover bills and having little to show for your money. With the right financial tools, you can establish a budget and build savings. As technology’s evolved, financial management options have increased. Today, you can turn to Canadian online banks to manage your money and afford essential expenses.

What are online banks?

Traditional banking involved going to a physical bank or credit union to deposit, transfer, or withdraw funds. Individuals filled out paper banking slips to initiate transactions. As long as the account holder had the funds available, tellers processed the transactions per the account holder’s request.

Today, you can go online, log into your account, and check your balance. While traditional brick-and-mortar banks have online banking services, new banks that prioritize online banking have entered the banking industry. These online banks are also known as digital banks. Digital banking emphasizes online transactions, enabling clientele to handle their transactions online.

Suppose you want to create an account with one of the online banks in Canada. Several online banks are options, including Tangerine, Simplii Financial, EQ Bank, Wealthsimple Cash, Scotiabank, Alterna Bank, and Outlook Financial. Many of these banks have no physical bank location where you can go to complete transactions. Tangerine has cafes, but they’re limited to prominent urban locations, making it hard for rural patrons to access in-person services. The range of services varies. Some offer only checking or savings accounts. Other online banks finance mortgages, offer clients credit cards, have retirement savings accounts, and enable patrons to pay bills online.

Online bank account holders can use their debit cards to withdraw funds from ATMs.

What are the benefits of online banking?

Banks that emphasize online services reduce costs by eliminating or limiting the number of physical locations they maintain. These savings are passed on to clients. For example, Tangerine offers a no-fee checking account.

Online bank patrons can use their debit cards at approved ATMs without incurring fees. Simplii Financial clients benefit from Simplii Financial’s affiliation with its parent bank, the Canadian Imperial Bank of Commerce (CIBC), offering patrons access to hundreds of ATMs throughout the country.

Canadian online bank account holders receive Canadian Deposit Insurance Corporation (CDIC) protection. Up to $100,000 per account is protected if the financial institution fails. This means account holders don’t have to worry about losing their money if their bank fails because the CDIC will reimburse their funds.

Online banks make it easy to log in, transfer funds, and deposit checks. You can also handle bill payments, such as paying your utility bill or phone bill.

You can use saved funds to afford home repairs.

With an online savings account, you can save the funds needed to improve your home to be more energy efficient. Use savings to add insulation to your attic and wrap your water heater with insulation to prevent heat loss. These simple steps will improve your home’s energy efficiency and reduce your energy bill. You’ll use less energy if you invest in Energy Star appliances and install new windows.

You can also use automatic savings plans to save the finances required to maintain your home’s heating, ventilation, and air conditioning (HVAC) system. You’ll reduce your electric bill if HVAC techs locate and repair air leaks in your HVAC system and perform routine system maintenance.

Reducing your energy bills will reduce your monthly expenses, enabling you to increase your savings. When you log in to pay your utility bill, you can transfer the savings directly to a savings account or a long-term savings plan, such as a Registered Retirement Savings Plan (RRSP).

Online banks simplify the banking experience, making it possible for patrons to perform routine banking tasks on their smartphone or computer. Use your online bank account to save funds for household expenses or retirement. Some online banks also provide mortgages and credit cards.