EQ Bank combines chequing and savings for the mobile age

Daniel Bader

January 14, 2016 6:31pm

The story of Canadian banking is often likened to that the mobile industry: reliable, robust, but expensive, with a lack of sufficient competition from upstarts to force the incumbents to change their ways.

But as we meander towards the day when every Canadian has a smartphone, the number of companies purporting to use them to disrupt even those intractable industries as financial services is growing, and quickly.

One such company is EQ Bank, the digital arm of Canada’s seventh largest financial institution, Equitable Bank. Marketed as a full-service digital banking solution, EQ Bank launches today with iOS and Android apps and a number of features that separate it from other digital-focused banks like Tangerine.

To that end, EQ Bank has come up with what Director of Marketing and Sales, Bryan Dinh, says is a “solid digital-only product backed by an established brand.” Like other digital-focused banking products, EQ Bank’s first offering is a free savings account with unlimited transactions, allowing it to be used as what Canadians consider a chequing account as well. Dinh says that the lack of retail overhead allows EQ to offer an industry-leading three percent interest rate on all deposits, along with five free Interac money transfers per month.

Setup is easy, since Canada’s banking regulator relaxed rules around opening and signing legal documents digitally. After offering relevant personal details, EQ asks you to submit a cheque to yourself from your current bank, which can be deposited using the app’s photo-based submission tool.

Once the account creation process is complete, you’ll have to wait up to five days for the requisite KYC (know your customer) due diligence before being allowed access and then you’re ready to go.


I had a chance to test EQ Bank for a few days before its launch, and came away impressed with its ambition, but disappointed with the early execution. The iOS and Android apps are web wrappers instead of natively built, making navigation slow and awkward. The process of sending an Interac e-transfer is especially cumbersome, forcing the user to open what amounts to a secondary browser window within the app.

After the initial deposit from an existing chequing account, EQ Bank uses it as a means to transfer funds to and from the service. And though those transfers can take a couple of business days to complete, Dinh reminds me that the free e-transfers allow users to share up to $2,500 per day in 10 to 15 minutes, even between their own accounts.

Finally, the app allows users to set up bill payments from directly inside the app.

At its core, EQ Bank is a good test of whether consumers are willing to spend more — not all, but an increasing amount — of time outside of their native banking environment. Because the service doesn’t offer cheques, money orders, or any retail experiences, it can’t be considered a full replacement. But over time, Dinh says, people will feel less of a need for those legacy fallbacks as they move to simplify and consolidate their finances. He notes that most people will be able to live almost entirely in EQ Bank’s offerings, since unlike Tangerine customers can hold high balances, generating interest, while using the unlimited transactions for bill payments and transfers.

At this point, EQ Bank has no plans to issue an Interac-powered debit card, either, so daily payments will still need to be made from an alternative credit or debit card issued by another bank. But the company isn’t focused on that; it wants customers to use the service to save money, and has developed goal-setting features within the app and the accompanying website. EQ also notes that because its parent company, Equitable Bank, is a federally-regulated institution, its deposits are protected by the Canada Deposit Insurance Corporation up to $100,000.

EQ Bank enters a market saturated with mobile banking apps of varying quality, but one that lacks the innovative, disruptive energy of our neighbours to the south. Due to strict regulations around the types of transactions customers are able to perform without signing their names on a piece of paper, and the entrenched relationships between the banks and companies like Interac, until recently the Big Six banks have only had one another to push them to make large-scale changes.

There are, however, companies such as Koho and Payso that are looking to make a noise within that regulated environment, and despite the fact that EQ Bank doesn’t fall quite within the definition of “upstart,” CEO Andrew Moor assured me at a recent personal finance conference in Toronto that the subsidiary is being run like a startup, and has ambitious plans to add quickly to its small array of valuable features.

In the meantime, EQ Bank’s basic value proposition is more fiscal than technological: three percent interest on all deposits and five free Interac money transfers per month is enough for me, and most people, to sit up and take notice.

  • deltatux

    Not issuing debit card and no access to ABMs pretty much kills the service for day to day banking. Interbank transfers take up to 3 business days. While the interest rate is alluring, credit unions still offer better solutions. Meridian & DUCA in Ontario offers the best balance between high rates and low fees (or in DUCA’s case no fee chequing accounts with no minimum balance) for traditional banking services which means access to a branch.

    I always thought Tangerine was all I needed but going all digital isn’t all that convenient when you start doing things outside of cash withdrawal and deposit like mortgages & wire transfers. This made me needing to fall back to a traditional service model like Meridian.

    Without at least ABM access via Exchange Network & a debit card, this service is only good for long term savings and that’s about it.

  • “Our EQ Bank Savings Plus Account is not yet available in Quebec”

    Same for PC Financial. The only choice Quebecers have is Tangerine!

    Calisse tabernac de mosu christ!

    • MFido

      Hint …

      I went to Cornwall … and opened a PC Financial account at the store there … few years ago …still doable 🙂

  • Davidyyz

    Pass. If they offered a TFSA with 3% interest I’d park my liquid savings here in a heartbeat. Without a debit card this simply isn’t a viable everyday banking solution. You’d still have to have another account with another virtual bank or pay fees to a traditional bank or have a ridiculous minimum balance with them. Also the hassle of transferring money back and forth and the taxes you’d pay on the interest you’d earn just isn’t worth it.

    • CheeseAvatar

      If you actually do some simple math, the difference b/w 0.80% you get from someone like tangerine TFSA savings vs 3.00% with EQ. Even after taxes (at the highest tax rate) you still win.

    • Davidyyz

      My TFSA with People’s Trust pays 2%, the additional 1% really isn’t worth it. If I was only getting 0.8% that would be a different story.

    • deltatux

      People’s Trust doesn’t offer debit card/ABM access AFAIK as well…

    • Davidyyz

      Nope they do not. My point is EQ bank pretty much requires you to have a bank account with another bank even though they are trying to market themselves as an all in one solution. If I’m going to have multiple accounts I’ll stick to earning 2% at People’s Trust tax free and do my day to day banking with Tangerine. EQ just isn’t a viable solution. They should have just stuck to offering TFSAs at better rates.

  • This bank will do well because most of the money put in, it can use for investments without massive withdrawals since there is no debit.

  • Richard Wangly

    I have an account with Tangerine, and count myself as familiar with most of their offerings. I have never seen any of the limitations alluded to in this article: “since unlike Tangerine customers can hold high balances, generating interest, while using the unlimited transactions for bill payments and transfers.”
    I suppose they could mean you earn “savings”-level interest on your chequeing account, but that’s not exactly a deal-breaker when you mainly pay on credit to take advantage of cashback rewards. The only real limitation I’ve found is that you can only open one account of each type (chequeing, savings and joint).

    • Vince V.

      I agree. Their Director of Marketing and Sales also states it is a “solid digital-only product backed by an established brand.” What established brand? The service is a good pass at being innovative but that quote has used car salesman pitch all over it.

      I ended up checking their website to see if I can learn more about it and it’s even more vague on there. Nothing is clear to the point, and it seems their used car salesman approach extends to their online presence as well.

  • LeMuffin

    There’s no way Equitable Bank is the 7th largest financial institution in Canada. What’s your source for that?

  • MFido

    F$?k …this again:

    “Our EQ Bank Savings Plus Account is not yet available in Quebec”

  • Wilfred Yung

    I think most people are trying to consolidate their bank accounts/investment accounts/credit accounts under 1 bank (which makes life a lot easier) than to have various different types of account scattered all across 6 or 7 different companies and accounts. Its just a time saver and plus you usually get bundle benefits when you consolidate ie. less or no fees etc

  • Dan Dickinson

    Thanks for writing this Dan. I’m glad the key features of the Savings Plus account got your attention.

    Thanks for your comments on the mobile app too. We definitely know about the gaps in this first version, and will tackle them in future updates. In a few cases (like your Interac E-transfer example) we had to make a choice between getting functionality to market now, or waiting until we could control the UX of the entire flow. In future versions it’ll just be an integrated part of the main pay/transfer screens. Bear with us as we get these improvements and new functionality out in 2016, and if you have any other specific feedback in the meantime let us know.

    Dan Dickinson
    VP Digital Banking, Equitable Bank

  • Joe C

    You’ve quoted their Director of Marketing and Sales saying it is a “solid digital-only product backed by an established brand.” What established brand? The service is a good pass at being innovative but got that quote has used car salesman pitch all over it.