- No fees for daily transactions
- Easy online and in-app purchases
- Deposit checks instantly from a mobile device
- Overdraft protection
- Earn interest on every dollar in your account
- Free ABM deposits
Tangerine Bank is a great option for Canadians to break away from their big-name banks, which offer little rewards to clients for using mobile banks. In this Tangerine Bank review, we explore the many reasons this digital bank may be the right fit for you.
In our opinion, Tangerine Bank is one of the best no-fee digital-only banks to Canadians due to the wide range of financial products, great perks, and it is CDIC insured up to 100k. With their sign-on bonuses and no-fees for daily banking plus overdraft protection, this may be one of the best challenger banks for you.
Tangerine Bank began as ING Direct in 1997. In 2012, ING Direct was acquired by Scotiabank, thus prompting the name change from ING Direct to Tangerine.
It is not a brick-and-mortar banking system, being a nearly completely digital bank, but there are a few in-person locations in Canada. Overall, Tangerine has a successful website and app for customers to use with ease.
Tangerine markets itself as “forward banking,” which essentially means they intend to turn the traditional way of banking on its head to provide a better banking experience for Canadians.
Since Tangerine is known for no fees, there are other perks to banking with them, such as opt-in overdraft protection and free ABM deposits.
Tangerine also offers many types of investment accounts with great interest rates. Online sign-up is available for all types of accounts.
- Great options for free checking accounts
- Many options for savings accounts, including a TFSA
- Credit cards are available with perks
- Options for investment portfolios are available for any level of investor
- Mortgage and loan services are available with good interest rates
- Interest rates vary
- Overdraft fees can add up if you aren’t in the opt-in overdraft protection program
- Investment portfolios are hands-off for the customer, so if you like to be involved, this may not be right for you
We have reviewed the details of Tangerine’s checking account options here:
Checking accounts pay interest on every dollar in your account, though the interest rates vary. Overdraft fees do apply, but if you were to opt-in to their overdraft protection program, it would cost you 5 dollars per use versus 45 dollars without the overdraft protection.
Tangerine offers unlimited free transactions with debit cards at ABM’s and on debit purchases. With the mobile app and website, it is easy to manage all of your accounts in one place. You can also use their spending tracking and categorization tools on the website.
Additionally, Interac e-transfer is free, and your first 50 checks are free.
Overall, checking accounts are among the best for digital bankers. This type of account may be the right fit for you if you value no fees, overdraft protection, and unlimited transactions at ABM’s.
You can use your Tangerine debit card at any Scotiabank ATM as well as online and in-store. You can also use your Tangerine account with Apple Pay, Google Pay, TouchID, FaceID. You can deposit checks through the app as well.
With Tangerine, you can apply for their credit card, which is a no annual fee credit card. The card also comes with purchase assurance covering loss, theft, or damage on most items for 90 days after purchase.
Many Tangerine checking account holders are pre-approved for this card, but you only need 12,000 dollars in income per year to be approved. For the Tangerine World Mastercard, you must make 60,000 dollars per year minimum to be approved.
You can select two or three purchase categories to receive 2 percent cash back. You can choose three purchase categories if you also open a savings account with Tangerine. Otherwise, you may select two categories. All other purchases receive 0.5 percent cash back.
There is also an upper level of the credit card, the Tangerine World Mastercard, that gives the same benefits but adds a few more travel perks.
These perks include a 1,000 dollar mobile device insurance and a travel lounge admission at a reduced fee, as well as an extended warranty for certain products and services.
With five options for savings accounts, Tangerine might be the digital bank for you.
The options include a traditional savings account, a tax-free savings account, an RSP account, a RIF account, and a US Dollar savings account.
We have broken down the options here so you can make the best choice for you.
Tangerine’s traditional savings account offers 0.10 percent interest on every dollar you save. There is no minimum balance for the account, and there are no fees associated with having the account open.
Their website offers a savings calculator tool to help you hypothesize how much you could be saving depending on the amount you put into the account.
For instance, using the calculator, if you put 100 dollars in the account each week, you will have 5,000 dollars in one year – which includes the interest you earn on the account.
The calculator is an approximation but a helpful tool to help you decide which digital bank option fits your needs.
Additionally, you can sign up online for this account.
Tax-Free Savings Account
With Tangerine’s tax-free savings account, you can count on a zero-dollar monthly fee and no minimum balance. The interest rate offered here is also 0.10 percent.
As long as you stay within your contribution limits, you won’t be taxed on the interest earned or on withdrawals. The TFSA in Canada for all people over 18 is 6,000 dollars.
You can also easily move your money whenever you need to. As with the traditional savings account, the site offers an approximation savings calculator tool to help you decide what best fits your savings goals.
RSP Savings Account
The retirement savings plan (RSP) at Tangerine benefits the user with an interest rate of 0.10 percent and the ability to move your money at any time.
The fees associated with this account are limited, but they do exist and will be communicated to you in advance.
As with any RSP, you can get a tax deduction for your contributions. For example, if you made 70,000 dollars in a year and you added 5,000 dollars to your RSP account that year, you could claim 7,000 dollars as a tax credit, thus bringing your total income earned down to 63,000 dollars.
Another benefit of RSPs is the deferred tax payments on the growth of the RSP.
So, the earlier you start an RSP, the more money you will have later on.
This account differs from the TFSA because it is not tax-free but rather tax-deferred.
RIF Savings Account
With a Tangerine retirement income fund (RIF), the interest rate is 0.15 percent, making it the highest rate of the savings account options at Tangerine.
There are also no minimum balances and reasonable fees.
You can enjoy your retirement income while receiving benefits from Tangerine, and the interest on your RIF is tax-sheltered. You must withdraw a minimum amount as long as the account is open, but the interest is tax-sheltered.
US Dollar Savings Account
With the US dollar savings account at Tangerine, there is no minimum balance and no monthly fee.
The exchange rate with Tangerine is buying at 1.268 and selling at 1.223. The rate can fluctuate from time to time, so be sure to research the current rate to determine what is best for you.
The bottom line: Tangerine has a wide variety of savings accounts for many needs of its consumers. The zero dollar monthly fees, 0.10-0.15 percent interest rates, and a few accounts with no minimum balance requirement might make it a good option for you.
Investment Tools and Portfolios
Tangerine offers many types of investment tools, including award-winning portfolio services. Tangerine is a winner of the 2020 Fundgrade A+ award for the balanced income portfolio.
You can choose between the core portfolios and the new global ETF portfolios.
The core portfolios include a balanced income portfolio, a balanced portfolio, a balanced growth portfolio, a dividend portfolio, and an equity growth portfolio. Both the balanced income portfolio and balanced portfolio offer stability and low to medium risk.
They differ because the balanced income portfolio tries to keep the investments mainly in bonds with a smaller percentage of stocks. The balanced portfolio offers a more even distribution among the stocks and bonds.
Balanced Income Portfolio
Based on the website, for instance, Tangerine tries to keep the balanced income portfolio to have 70 percent in Canadian bonds, 10 percent in Canadian stocks, 10 percent in US bonds, and 10 percent in US stocks.
By doing this, they manage your money in a more secure sense, which might be the right choice for someone new to have a managed portfolio.
Again, based on the website, the balanced portfolio is more evenly distributed, with 40 percent in Canadian stocks, 20 percent in Canadian bonds, 20 percent in US stocks, and 20 percent in US bonds.
Though the percentage of Canadian bonds is smaller, it is still the majority in this option, thus making it a less risky choice.
Tangerine allocates an equal 25 percent to Canadian stocks, US stocks, International stocks, and Canadian bonds with the balanced growth portfolio.
With most of this portfolio in stocks, the risk is slightly higher than the previous two accounts. However, there is potential for growth due to the portfolio being 75 percent stocks.
One of the paying portfolios from Tangerine is the dividend portfolio. This option lets you earn an annual check based on the dividends from the stocks you invest in.
This may be a good option for you if you want your portfolio to earn you a check, though it is more of a risk due to the portfolio being only stocks.
According to the website approximation, a portfolio like this would have 50 percent Canadian dividend equity, 25 percent US dividend equity, and 25 percent International dividend equity.
The final portfolio offered by Tangerine holds a higher risk but could pay off in a big way.
Equity Growth Portfolio
The Equity Growth Portfolio does not have any bonds to balance it out. Still, there is a greater potential reward due to the 33.3 percent split between US Stocks, Canadian Stocks, and International Stocks.
In addition to the portfolios’ unique specs, the website offers more details on each one, along with PDF files of past years’ financial statements, dividend documents, and fund performance reports.
Because you do not manage these, the portfolios do have a management expense ratio.
The MER is currently 1.06 percent for all portfolios. All portfolios distribute funds annually in December if the portfolio has any funds to distribute.
How Portfolios Are Managed
Additionally, Tangerine lets you begin investing easily online.
Tangerine invests through passively managed accounts that keep up with the markets without increasing fees.
Each portfolio is reviewed and rebalanced if necessary each quarter. Opening an investment account can be done with as little as 25 dollars, and you can access your investment accounts easily with one login.
This is helpful because not all digital banks work this way when you have many different accounts, so being able to access all of your accounts with one password and login makes it easy to move money around and keep track of your money.
The other category of investment portfolio available with Tangerine is the Global Exchange Traded Fund (ETF) portfolios.
Tangerine offers the balanced ETF portfolio, the balanced growth ETF portfolio, and the equity growth portfolio. We have listed the basics of each type to help you decide what would work best for your needs.
The MER for these accounts is less expensive compared to the other portfolios covered thus far. For all three ETF accounts, the MER is 0.77 percent.
The Balanced ETF is, as it implies, very balanced and low risk. This portfolio is 60 percent stocks and 40 percent bonds.
As of July 30, 2021, the holdings in the balanced ETF account are as follows:
- Scotia Canadian Bond Index Tracker ETF = 39.48 percent.
- Scotia US Bond Index Tracker ETF = 35.28 percent
- Scotia International Bond Index Tracker ETF = 15.27 percent
- iShares Core MSCI Emerging Markets IMI Index ETF = 7.75 percent
- Scotia Canadian Large Cap Equity Index Tracker = 1.75 percent
- Cash = 0.48 percent
The balanced growth ETF portfolio is a bit riskier than the previously covered portfolio due to its nature of being more involved with stocks that can fluctuate.
With this portfolio, 75 percent of funds are in stock, and 25 percent are in bonds.
As of June 30, 2021, the holdings in the balanced growth ETF portfolio according to the website are as follows:
- Scotia US Equity Index Tracker ETF = 43.74 percent
- Scotia Canadian Bond Index Tracker ETF = 24.48 percent
- Scotia International Bond Index Tracker ETF = 18.94 percent
- iShares Core MSCI Emerging Markets IMI Index ETF = 9.61 percent
- Scotia Canadian Large Cap Equity Index Tracker ETF = 2.17 percent
- Cash = 1.06 percent
The final global ETF portfolio offered at Tangerine is the riskiest, consisting only of stocks. The equity growth portfolio is made of 100 percent stocks, so there are no bonds to balance it out on a down market.
As of June 30, 2021, the holding in the equity growth portfolio are listed below:
- Scotia US Equity Index Tracker ETF = 57.82 percent
- Scotia International Equity Index Tracker ETF = 25.03 percent
- iShares Core MSCI Emerging Markets IMI Index ETF = 12.70 percent
- Scotia Canadian Large Cap Equity Index Tracker ETF = 2.87 percent
- Cash = 1.57 percent
With this deep dive into the various holdings and what makes each portfolio unique, you may be able to sort out for yourself what makes the most sense for your financial goals and needs.
Borrowing with Tangerine Bank
Tangerine Bank takes its zero-fee approach to the next level when it comes to borrowing. They offer mortgage services, a home equity line of credit, and a general line of credit.
With their trademark easy to apply online, you can get started as soon as you would like if you find it fits your needs.
We researched the specifics on each of these programs and have sorted it here for you:
- Dedicated account manager
- Good upfront rate
- Flexible pre-payment options
Their flexible payment options allow you to make a lump-sum pre-payment of 25 percent of your original mortgage amount. You may do this at any payment date as well.
You can also take your mortgage with you, penalty-free, if you decide to move with the current rate, term, and loan amount.
The interest rates are determined semi-annually, not in advance. To give you an idea of the current interest rates, we have listed a few examples here:
- 5 year variable mortgage = 1.35 percent
- 1 year fixed mortgage = 2.79 percent
- 2 year fixed mortgage = 1.78 percent
- 3 year fixed mortgage = 1.89 percent
- 4 year fixed mortgage = 2.04 percent
- 5 year fixed mortgage = 2.14 percent
- 7 year fixed mortgage = 2.64 percent
- 10 year fixed mortgage = 3.09 percent
These rates are based on the current information available. Be sure to research the latest rates to determine if this is the best fit for you.
As you can see by the information, the 5-year variable rate is currently at 1.35 percent, but it is also important to note that the APR is currently at 1.37 percent.
You can secure your mortgage rate for 120 days online if you are interested but want to keep shopping around.
Home Equity Line Of Credit
The home equity line of credit where you can borrow at a low interest rate, using the equity you have, is already built into your home boat’s perks like 24/7 online access and great rates. The most important perk is the fixed payback plan.
If you are considering whether or not a home equity line of credit is for you, be sure to consider whether or not you will be able to pay this back since this could increase your mortgage rates and debt ratio if mismanaged.
Lastly, we should explore the general line of credit. The general line of credit may be right for you if you need to borrow, but again decide if taking on more personal debt is right for you before doing so.
With Tangerine Bank, you can borrow what you need when you need it, with flexible payments, easy online access to the account, and a low variable interest rate.
The Final Decision
Based on our research for this Tangerine Bank review, it offers a wide range of products and digital banking activities with a solution to any need.
If you are looking for a digital bank where you can have savings, spending, investing, and borrowing in one convenient app and website, Tangerine Bank may be for you.
With their zero-dollar fees in most cases and their 24/7 support, it might be the right fit.