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Why did you first choose to bank with your financial institution? If you’re anything like the majority of us, you’re still banking at the same place as you did as a teenager.
If that’s so, it might be time to start shopping around at other financial institutions. In this article, we’ll look at how things stack up in the showdown of Tangerine vs. RBC.
Tangerine Bank emerged in 2014 when it transformed the Canadian banking scene with its bold branchless banking model. Formally ING Direct, it was acquired by Scotiabank in 2012 before becoming Tangerine. It remains a subsidiary of Scotiabank to this day, although the banks do offer two different services (with the exception being that Tangerine customers can use Scotiabank ATMs).
The Royal Bank of Canada, or RBC, has a history in Canada that dates back more than 150 years to its inception in Halifax. While not the oldest bank in Canada, it is the largest bank in terms of market capitalization.
Aside from offering personal banking services, RBC also provides wealth management services, commercial banking, insurance services, capital market products and loans such as lines of credit.
Tangerine offers a no-fee chequing account to its customers. This means that not only are there no monthly fees but there is also no fee for common transactions. Overdraft protection is also free if it’s not used.
Tangerine customers can access their chequing account on the desktop app, mobile app or with their Visa debit credit card. One interesting fact about this account is that it offers the opportunity to earn interest on balances — although the rate is only 0.01% if your balance is less than $49,999.
RBC’s Day to Day Banking account is its simplest chequing account, offering the essentials with a $4 monthly fee (waived for certain customers).
The RBC Advantage Account is the next level up, with an $11.95 monthly account fee and unlimited debit transactions. Again, this fee is waived for certain customers. Next up is the RBC Signature No Limit Banking account, which carries a cost of $15.95 and comes with unlimited debit transfers and some non-RBC ATM transactions.
RBC VIP Banking is even higher up the ladder and will get you your RBC Direct Investing maintenance fees waived and extra accounts included at no cost.
RBC takes this round, but with a caveat. If you are looking for an essential banking experience with no monthly fees for everyday transactions, Tangerine is the way to go. If you value in-person service and want a few “frills” from your bank, then RBC is the answer.
One of Tangerine’s most popular offerings is its high-interest savings accounts. The standard savings account comes with no minimum balance required and offers an interest rate of 0.10%. Promotional interest rates are usually available up to 2.00%. Tangerine offers an Automatic Savings Program that allows customers to save without thinking about it.
Tangerine also offers the option of a TFSA, RSP (and RIF) or US $ savings accounts.
RBC offers four different saving account options: High-Interest Savings, Automatic Savings, Day to Day Savings, and USD savings.
Notable among these is the Automatic Savings account, which uses AI to learn transaction habits and set money aside instinctively, and the high-interest savings account which comes with a current promotional rate of 1.5% for new account holders.
There’s a reason why Tangerine’s high-interest savings account helped put them on the map. While there are some online banking options out there now that offer a better interest rate than Tangerine, the daily rate of 0.10% is still higher than what is being provided by traditional banks.
Tangerine offers its customers two different credit card options, both with MasterCard.
First up is the Money-Back Credit Card, Tangerine’s flagship cashback card that comes with a cashback rate of up to 2% on select everyday categories. With no annual fees, this card sticks out as a rare no-fee cashback credit card. It also comes with a promotional balance transfer rate of 1.95% interest for six months.
Perhaps best of all, the Money-Back card asks for fair qualifying requirements: applicants need to be the age of majority and have a minimum yearly income of $12,000.
Tangerine’s other credit card option is the World Mastercard. This is also a cashback card that features up to 2% interest on everyday purchases in select categories with a $0 annual fee. As its name would suggest, the card also offers some major travel perks, including access to Mastercard Travel Rewards, car rental insurance and Mastercard Airport Experiences.
The catch? There isn’t one, but you’ll need to make $60,000 a year to qualify for the card.
RBC has the kind of credit card roster you would expect from one of the country’s most prominent banks. There is just about something for everyone: business credit cards, travel rewards cards, low-interest cards, cashback cards and airline partnerships. RBC even offers a considerable number of cards that come with no annual fee.
Among its most popular credit cards are the RBC Rewards card and the WestJet RBC World Elite Mastercard.
The RBC Rewards card is known for its rewards program that allows for the earning of points for every $1 or $2 spent, followed by flexible reward redemption. RBC’s WestJet World Elite Mastercard is a partnership with Canada’s second most prominent airline, WestJet, and is ideal for frequent flyers.
It’s true that RBC offers way more credit card options than Tangerine, but the ability to choose can sometimes be more of a burden than a perk when it comes to banking. Unless you need a credit card for a specific reason, Tangerine’s cards will do the trick.
As a bank somewhat geared toward millennials (and other people intimidated or disillusioned with the big banks), Tangerine offers several accessible investment options. Tangerine provides its customers with the ability to invest in portfolios. The bank offers both Core and Global ETF portfolios, but customers don’t choose their portfolios and instead select options passively managed by Tangerine.
RBC offers its customers investing options through TFSAs and RRSPs, Mutual Funds, ETFs, GICs and Savings. RBC also provides two specific supporting services: RBC Direct Investing and RBC InvestEase.
RBC Direct Investing is a do-it-yourself investing service that offers online tools and learning resources. One exciting feature of RBC Direct Investing is that it comes with “practice money” for new users to practice trading with as they learn the ropes.
RBC InvestEase gives customers access to an investment plan based on their situation. The investment plan will be created especially for the customer and will contain carefully tracked ETFs. The main difference is that customers do not have to manage their investments themselves; instead, a professional investor from RBC will overview their activity.
If you have a large amount of money to invest or like to get into the nitty-gritty of your investments, you can’t go wrong with RBC. However, if you prefer a hands-off approach that comes with low funds and low risks, we would have to say that Tangerine wins this round.
At first, it might have seemed as if it was an unfair battle from the get-go — pitting one of the country’s largest and most famous banks up against a relative newcomer. However, as our above comparisons make clear, you can see that it’s not so much a battle of who is better, but instead of who is better for you and your personal finances.
Tangerine is owned by the Bank of Nova Scotia, more commonly known as Scotiabank. Tangerine was formerly known as ING Direct, but in 2012 it was acquired by Scotiabank in a deal valued at over 3 billion dollars. Today, Tangerine is wholly owned by Scotiabank and operates as a subsidiary. Although functionally still two different banks, Tangerine customers can access Scotiabank ATMs for free, which means that they also have access to the Global ATM Network.
As an online-only bank, Tangerine is often questioned for its safety and security. However, rest assured that the bank is just as safe as any other Canadian financial institution. Tangerine follows the highest security standards available for online banks, such as encryption and 24/7 real-time monitoring on all transactions.
Tangerine also insures deposits of up to $100,000 through the CDIC, so you can be certain that your cash is safe should something happen with the company.
RBC is one of the most popular banks in Canada — and this is for a good reason. With more than 150 years of history, RBC is known for its security, reliability and wide range of services. The bank also offers customer service that is renowned for its standards and often lauded as the best in Canada. The bank operates over 1,200 branches across the country, too, which means that you’re probably never too far for an in-person visit.