Fintech Canada 🇨🇦 – how EQ Bank products are more attractive than other neobanks?

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Sanjeev Arora

7 min readApr 26, 2023

Disclaimer: Opinions expressed are solely my own and do not express the views or opinions of my employer or any other institution. Any information shared on a publicly listed company or digital assets is for informational purposes only and is not a recommendation of an investment strategy or to buy or sell any security or digital asset.

This is a brief overview of some of the personal banking products from a lens of a Canadian consumer.

A neobank is a type of direct bank that operates exclusively online without traditional physical branch networks.

Why should you read about EQ Bank?

Learn how their product differentiates from other neobanks
Learn how to earn higher interest on your cash balances
Learn how to get a fee-free bank card with rewards and cashback

Who is EQ Bank?

Directly from their company overview page —

EQ Bank is powered by Equitable Bank, Canada’s Challenger Bank™. Founded over 50 years ago, Equitable manages more than $61B in assets and has grown to become the country’s seventh-largest independent Schedule I bank serving more than a quarter million Canadians by providing diversified personal and commercial banking services. Launched in 2016 as Canada’s first-born digital bank, EQ Bank has more than $7 billion in deposits and is committed to bringing smarter banking solutions to Canadians.

Why am I writing about EQ Bank?

This post is not my usual deep dive but more about covering EQ Bank (a trade name of Equitable Bank) and the value of their products and overall banking experience for Canadian consumers.

According to my findings, EQ Bank is a real challenger bank to all other so-called neobanks in Canada.

Why did I sign up for EQ Bank?

After meeting with Rahim Daya, I wanted to test EQ Bank’s new bank card offering myself and evaluate the benefits (yes, I’m that crazy person who creates multiple accounts to test new product offerings over a period of time).

But, it might come as a surprise to you that I decided to sign-up for a Savings Plus Account with EQ Bank and transferred over $10,000 after I received an email nudge to save or invest my money by Wealthsimple today (24 Apr 23, see image below). The friction of moving funds with WealthSimple is high and their offers like “earning up to 4% interest on your cash balance” have hidden conditions like “when you invest $100,000 across all your accounts with us”. I wonder how valuable is this offer to their current 3 million clients, 80% of whom are under the age of 40 (Data source: WealthSimple post).

Email from WealthSimple — Add a $5,000 prize to your tax refund by depositing cash in your account

How is EQ Bank offering more value than other Canadian neobanks?

Keep your cash with an actual Bank — Well for starters, EQ Bank is a “real” Schedule I bank and not just any startup that is sending your funds to another chartered bank in the background. For e.g. The Neo Money™ account (from Neo Financial) is provided by Concentra Bank. Recently, Concentra started doing business as Wyth Financial and now both Wyth Financial and Concentra Trust have joined the Equitable Bank family (😀 see what I mean). So, why not just bank with EQ Bank directly as all those Neo Financial bank deposits will move to EQ Bank or its parent company anyway. See more on the home page of https://www.wyth.ca/.
The speed of new account creation (under 2 mins) — Try it yourself, it was like creating a social media account. With EQ Bank, the new account creation experience was flawless and I was able to not only create the new Savings Plus Account instantly but “log into” it too 🤯. You all know what I mean if you have recently created bank accounts elsewhere. Many new bank accounts are not provisioned instantly and at times you may even have to go into the branch to show supporting documents. EQ Bank is compliant with all KYC/AML rules and is using technology to remove friction.
Delightful web and mobile onboarding experience — the entire onboarding of a new customer across the EQ Bank web and mobile banking is flawless and it just worked…PERIOD!!! There is room to offer a persona-driven user experience (UX) but I will get to that in another article.
Attractive interest rates — for a normal savings account without any monthly fees, free everyday transactions, and no minimum balances, the rate offered by EQ Bank is attractive. I have funds that I will be spending in 3–4 months so even short-term GICs do not fit my needs. According to EQ Bank, Savings Plus Account allows the customer to earn up to 250x more than at other banks, i.e. 2.50% interest with no limited-time catch. EQ Bank’s website shares— This interest rate offer claim is based on research conducted by Equitable Bank comparing interest rates of base savings accounts offered by Canada’s ‘Big 5’ banks. Rates were compared using a ratio analysis. Research is based on savings account interest rates taken from public websites as at January 4, 2023
Instant large amount money transfer — now this was totally unexpected as I was just trying to establish the various limitations of the EQ Bank savings account based on my experiences with WealthSimple, Neo Financial, etc. With EQ Bank, I was able to instantly connect to my regular bank account and deposit $10,000 in near real-time (see the images below, if you don’t believe me, and how it compares to options provided by WealthSimple). Basically, you pick your bank, enter banking credentials, select the bank account you want to move funds from and get to the “Pre-authorized debit agreement” screen. You can see that EQ Bank was able to set up a “Pre-authorized Debit agreement” via this experience as I didn’t pick other options like Interac email transfer which has a lower transfer limit. I must share that even though the $10,000 balance is appearing in my EQ Bank account (which is what a customer wants), those funds have not been debited from my bank account yet (it’s been over 15 hours now). I was not able to test whether I could spend this $10,000 immediately or not to make a purchase (for obvious reasons).

Transferring $10,000 to EQ Bank from another financial institution — Result “Instant” deposit

Transfer Complete & Funds Deposited in EQ Bank

Transferring $10,000 to WealthSimple from another financial institution — Result “Wait” for a few days for your deposit

Conclusion

EQ Bank does what it says — We adapt. We ask, “What’s the smarter way to do things?”
EQ Bank cares about profitable unit economics across the Canadian Banking landscape and not about touting how many million customers have signed up for their service.
EQ Bank uses technology and best-of-breed partners to offer value to its customers and to reduce its overhead. For e.g. Wise for money transfers, Mastercard for the reloadable bank card, etc.
EQ Bank has a broader range of products for everyday banking, investments, payments, and borrowing than other neobanks in Canada
EQ Bank's fee-free ATM card offering is more competitive than other neobanks in Canada. They were a bit behind in launching this reloadable card product as the benefits shown below were complicated to launch in the Canadian landscape. Learn more here — https://www.eqbank.ca/personal-banking/payments/card