Formerly known as ING Direct, Tangerine Bank has been in Canada for more than two decades. They were one of the first digital banks in the country and is one of the most recognized brands out there. The advantage of being one of the first players out there is that they know what their customers want, but at the same time, there’s a lot of competition these days.
In my Tangerine Bank review, I’m going to go over all their account rates, what products they offer and how they compare to other digital banks. They may not be the top choice for some people, but there’s no denying that they have a lot to offer.
Tangerine Bank account rates
- Chequing Account – Up to .15%
- Savings Account – 2.80% for 5 months (.40% regular)
- Tax-Free Savings Account – 2.80% for 5 months (.40% regular)
- RSP Savings Account – 2.80% for 5 months (.40% regular)
- US$ Savings Account – 2.80% for 6 months (.25% regular)
- RIF Savings Account – 2.80% for 6 months (.45% regular)
To be straightforward, Tangerine used to have some of the highest interest rates which is why they’re on my list of the best high interest savings accounts in Canada, but in recent years, they’ve started to lag.
Their promotional rate of 2.80% for 5 months is quite good, but once your promotional period ends, your rate drops down to .40%. It’s respectable compared to traditional banks, but it’s not nearly as good as what other banks are offering (which I’ll highlight below).
The chequing account seems quite “generous” at up to .15% interest, but when you read the fine print, you’ll realize you need to have quite a bit saved to get that amount. You’ll earn .05% interest on deposits between $0 – $49,999.99; .10% interest for deposits between $50,000 – $99,999.99; and .15% on everything over $100,000. To be fair, traditional banks give you zero interest on your chequing account so at least you’re getting something with Tangerine Bank.
If you’re the type of person who likes to chase interest rates and you don’t mind moving your money around to whoever is offering you the best rate, then Tangerine might be a good choice.
Similar to most digital banks, there are no monthly account fees, nor are you required to maintain a minimum balance. Sending e-transfers are also free.
What makes Tangerine unique compared to other digital banks is that they offer various accounts such as a Retirement Savings Plan, US dollar and Retirement Income Fund. They also have products including a credit card and investment funds. If you’re looking for multiple products from a single bank, then Tangerine Bank is an excellent choice.
Tangerine Money-Back Credit Card
What really makes Tangerine interesting is that they have a Tangerine Money-Back Credit Card which is one of the best cash back credit cards in Canada. People love this credit card since you can choose up to 3 categories where you’ll earn 2% cash back. All other purchases earn you 0.5% cash.
This is appealing since you’re the one that gets to choose the categories. Just about every other credit card out there has define categories where you earn additional cash back or points, but not with Tangerine. You can basically customize this credit card so you get the maximum return based on your spending.
I should also note that the Tangerine Money-Back Credit Card doesn’t have a high minimum income requirement. This works out perfectly for people who have a modest salary or for new grads who are looking for a better credit card. Oh, this card also has no annual fee. Read my Tangerine Money-Back Credit Card review now for the full details about the card.
Tangerine World Mastercard
Tangerine also has a higher tier credit card called the Tangerine World Mastercard. The card is basically the same as the Money-Back Credit Card but you get the following additional benefits:
- Rental car collision/loss damage insurance – 31 days
- Mobile device insurance up to $1,000
- Mastercard Airport Experiences Provided by LoungeKey
- Priceless cities, exclusive experiences and offers
This card requires a minimum personal income of $60,000 or a household income of $100,000 for you to qualify. You can read my Tangerine World Mastercard review for the full details.
Tangerine Investment Funds
Another popular product from Tangerine is their investment funds. All of Tangerine’s investment funds follow various indexes and come with a fee of 1.07%. This fee is significantly lower than the average mutual fund management fee of 2.50%. That said, if you invest with a robo advisor such as JustWealth, RBC InvestEase or Nest Wealth, you would pay less than 1% in fees.
The reason Tagerine’s investment funds are popular is that they’re simple to understand. They have four different portfolios that are built with various degrees of risk. They also have a dividend portfolio for those who are looking for dividends. Everything is automatically rebalanced so you don’t really need to do anything.
Again, there are cheaper ways to invest, but Tangerine’s investment funds are a good fit for people who are looking to keep all their banking and investments to a single financial institution. If you’re interested in just Tangerine’s investment funds, you still need to open a Tangerine account to get access to them.
How Tangerine Bank compares to others
Although Tangerine Bank offers a lot of different products, most people are only interested in their interest rate. Their promotional rate of 2.75% is quite good, but Motive Financial has an everyday rate of 2.80%.
There’s also EQ Bank who offers an interest rate of 2.00% all the time. EQ Bank has changed the landscape over the years as they were one of the first banks to introduce free e-transfers. Speaking of e-transfers, it’s a bit mindboggling that Tangerine charges $1 for them if you’re sending money to someone who doesn’t have a Tangerine account. Just about every other digital bank offers unlimited free e-transfers.
What Tangerine Bank does have going for them is their various products. You won’t find many digital banks that have a U.S. dollar account available. A credit card and investment funds are also unheard of with Tangerine’s competitors.
My Tangerine Bank review is positive. If you’re strictly looking for an online bank that gives you a variety of products and services, then Tangerine is a good choice. That said, if you’re strictly looking for the highest interest rate, there are better options available.