An Alterna Bank review for 2020

Ratehub.ca
by Ratehub.ca December 31, 2019 / No Comments

Table of Contents

Alterna Bank is one of Canada’s most popular alternative banking institutions. The bank operates entirely online and provides an excellent variety of banking and investing account options with no monthly or annual fees. Additionally, all saving and investing accounts offer exceptional interest rates and come with incredible flexibility. And, like any major Canadian bank, Alterna Bank is a CDIC-insured financial institution.

This review provides more information about Alterna bank, with an in-depth analysis of their leading personal finance products.

Alterna Bank Online Banking Review

Alterna Bank offers a variety of saving, investing, and spending accounts. This review will take a closer look at each account and help you decide whether or not its right for you.

Some of Alterna Bank’s best general features include:

  • No-fee accounts including chequing, saving and investing accounts, all of which come at no cost to Canadian customers.
  • Joint account options are available for people who want to combine account savings.
  • ATM access through the EXCHANGE Network allows members to withdraw funds from over 3,000 Canadian ATMs.
  • Online and mobile banking allows cardholders to perform daily banking tasks online, such as fund transfers, bill payments, deposit cheques, and much more.
  • Account linking allows seamless transfers through “Me-to-Me Transfers.” Customers can connect their Alterna bank accounts with accounts from other institutions.

Below, you’ll find details on each account that Alterna Bank has to offer Canadians.

No Fee eChequing Account

Alterna Bank’s chequing account might be one of the most popular products that the digital bank has to offer. It’s also among the best chequing accounts in Canada. The chequing account is entirely free to use and comes with unlimited features, making it truly flexible.

The Alterna Bank No Fee eChequing Account includes:

  • No minimum balance requirements: Opening an Alterna Bank No Fee eChequing Account comes with no minimum balance requirement.
  • Unlimited debit and digital transactions: Unlimited debit and online transactions, including bill payments, debit transactions, withdrawals and transfers.
  • Unlimited Interac e-Transfers: Send money for free with no limits or restrictions.
  • Annual interest rate: 0.05% on deposits in an Alterna Bank Interest account.
  • Overdraft protection: Available for only $2.50 a month.
  • Free ATM access: Access to over 3,000 the EXCHANGE Network ATMs, including Alterna Savings, National Bank, HSBC, and more. 

High-Interest Savings Account (HISA)

The Alterna Bank High-Interest eSavings Account offers interest well above the Canadian inflation rate. Using a high-interest savings account with Alterna Bank requires no minimum deposit requirement, meaning you can open a bank account online right now.

Features that make this account unique to other HISAs in Canada include:

  • Unlimited transfers, deposits, withdrawals, and Interac e-Transfers.
  • Unlimited transactions, including debit.
  • No minimum balance or contribution requirements.

A High-Interest Savings Account is a savings account that offers interest above 1.05%. Interest earned in the account is taxable at the same rate as the account holder’s income.

Guaranteed Investment Certificates (GICs)

Alterna Bank GICs earn excellent interest rates, with terms ranging between one to five years in length. Interest rates vary, depending on the deposit’s term.

Purchasing GICs with Alterna Bank requires a minimum deposit of $500 and allows a maximum deposit of $500,000. Interest on investments can grow tax-free by placing GICs in a Retirement Savings Plan (RSP) o a Tax-Free Savings Account (TFSA). The bank offers both registered GIC options to its customers.

A Guaranteed Investment Certificate (GIC) is a term deposit which locks the investment for a certain amount of time. Interest earned in GICs is taxable but can grow untaxed in a TFSA GIC or an RRSP GIC.

Since Alterna Bank offers various GIC terms, customers have the option of using a GIC laddering strategy.

Tax-Free Savings Account (TFSA)

The Alterna Bank TFSA eSavings Account works like any tax-free savings account. There is no minimum deposit requirement to open a TFSA with Alterna Bank. Withdrawals and deposits into the TFSA are unlimited.

Tax-Free Savings Accounts (TFSAs) are registered savings accounts that come with a contribution limit and allow stocks, mutual funds, savings, and other investments to grow tax-free. 

Registered Retirement Savings Plan (RRSP)

Alterna Bank’s RRSP eSavings Account offers an interest rate of 2.35% on deposits. There are no minimum balance or contribution requirements or minimum contribution limits either.

A Registered Retirement Savings Plan (RRSP) is a savings account purposed for retirement planning. It is a registered savings account, meaning it is government registered and comes with a contribution limit and tax benefits.

What is Alterna Bank?

Alterna Bank is the direct banking division of Alterna Savings. It’s a no-frills banking option that operates entirely online. It offers various spending, saving, and investing accounts, along with mortgage options.

Operating since 2000, Alterna Bank is one of Canada’s first exclusively digital banks. No branches for the bank exist, though customers do have some banking options at Alterna Savings.

Who owns Alterna Bank?

Alterna Bank is the direct banking division of Alterna Savings. Alterna Savings is the second credit union to open its doors in Canadian history, and the first in Ontario’s. The credit union has been operating since 1908. Currently, Alterna Savings manages around $8 billion in Canadian assets.

Today, Alterna Savings is among Canada’s top ten most popular credit unions. Alterna Bank is also widely popular among financially savvy Canadians.

Is Alterna Bank safe?

Yes! Alterna Bank is a safe banking option. In fact, it is considered a Schedule 1 bank, meaning deposits and savings are insured by the Canada Deposit Insurance Corporation (CDIC). Under CDIC Insurance, investments and deposits with Alterna Bank are insured up to $100,000 per account. In the highly unlikely event that a bank becomes insolvent, your savings and investments are insured by the CDIC—if the bank is a CDIC member. –

Why choose Alterna Bank?

There are many reasons why Alterna Bank might be a suitable banking option for you. Primarily, as a no-frills bank, Alterna Bank can provide its customers with some of Canada’s best interest rates. Additionally, it can provide enhanced flexibility on accounts, meaning each transaction won’t cost you extra in unnecessary fees.

Alterna Bank is also incredibly accessible. While many banks or other financial institutions usually set the bar high for minimum deposits or monthly fees, Alterna Bank is a free option that doesn’t limit who can make the most out of their incredible interest rates. In fact, you’ll likely save money on saving money. For this, and many other reasons, Alterna Bank is also the proud winner of Ratehub.ca’s Personal Finance Awards. The digital bank claimed the best TFSA, best RRSP, and best chequing account awards for 2018.

Should I bank with Alterna Bank?

Alterna Bank is an excellent bank, but probably best for Canadians who rarely require in-person assistance at a physical branch. However, while no designated branches for Alterna Bank exist, customers may visit Alterna Savings branches and enjoy some branch services.

Still, few locations exist and are generally remote unless you live in a major urban area. The digital bank is still incredibly flexible and accessible to all Canadians.

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