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Canadians have several financial institutions they can use for both banking and investing. Many of them are well-known banks, such as BMO Bank of Montreal, CIBC, RBC Royal Bank, Scotiabank, and TD Canada Trust. However, other financial companies offer a number of the same services that aren’t as well known and cost less than the larger, more popular financial institutions.
In this showdown, we compare Wealthsimple vs. Tangerine, two of Canada’s favorite alternative financial products.
Wealthsimple is a financial services company that focuses primarily on investments.
It originally launched as a robo-advisor (Wealthsimple Invest), but now offers high-interest savings accounts (Wealthsimple Cash), online tax filing (Wealthsimple Tax), and stock and cryptocurrency trading (Wealthsimple Trade).
Easy-to-use: Wealthsimple’s best feature is its easy-of-use and user accessibility.
Free trades: This is a game-changer in the investing world. While most online brokerages charge a commission of between $5 and $10 a trade, Wealthsimple Trade has no trading fees.
No minimum investment: Wealthsimple Trade has a $0 minimum investment requirement
Free tax filing: Wealthsimple Tax is free and it’s easy to use.
Lack of features: Wealthsimple Cash is good, but you can’t use it to pay bills or for spending. Also, you can only send money to friends who have a Wealthsimple Cash account. Interac e-Transfers aren’t available.
Fewer account/investment options: Wealthsimple Trade would be better if it offered more than just three types of accounts. It would also be better if there were more investments to choose from, such as Canadian bonds (or any other type of bond) and options.
No credit card: Wealthsimple only offers a prepaid debit card (Wealthsimple Cash card)
Tangerine was launched in 1997 as ING Direct by the Netherlands-based ING Group. The first product was a high-interest savings account with no fees.
It has begun offering a number of products since then, including mutual funds, mortgages, chequing accounts, and credit cards. The company was renamed Tangerine shortly after it was acquired by Scotiabank in 2012.
No-fee chequing: No minimum balance, an unlimited number of transactions, and you can earn interest on a balance. This is rarely offered at other banks.
Low-cost mutual funds: Tangerine’s investment funds are actually well priced compared to other funds. The new global ETF portfolios are inexpensive and also give you international equity exposure.
Low interest rates: Tangerine was a disruptor when it launched its no-fee savings account with a rate higher than the big banks. Now the rate on its savings accounts and GICs looks tiny compared to smaller banks. While Tangerine does occasionally offer promotional rates, they’re not permanent.
No free additional cheques: While the first book of 50 cheques is free, having to pay $50 for any additional chequebook is a rip-off, especially when other online banks provide them for free.
Wealthsimple Investing Overview:
Let’s take a look at what Wealthsimple’s investment products have to offer Canadians new to investing.
The most well-known product is Wealthsimple Invest, which was one of the first Canadian robo-advisors. Robo-advisors offer users a passive investing strategy. They invest automatically in a variety of exchange-traded funds (ETFs) based on your risk tolerance.
Unlike active mutual funds, robo-advisors try to replicate market returns instead of trying to beat the market. While this strategy isn’t for everyone, it’s better than trying to beat the market and failing to do so over the long term.
The appeal of robo-advisors is the cost. While an active mutual fund usually charges a fee of around 2% or more a year, a robo-advisor passes on the cost of the ETF fees as an annual management fee.
In Wealthsimple Invest’s case, the management fee is 0.5%—or one-fourth the cost of the fee that a mutual fund charges. For those with $100,000 or more in assets, the management fee is 0.4%.
Wealthsimple Invest offers a variety of accounts, including registered retirement savings plans (RRSPs), tax-free savings accounts (TFSAs), registered education savings plans (RESPs), registered retirement income funds (RRIFs), locked-in retirement accounts (LIRAs), personal, joint, and business accounts.
If you’d rather take charge of your financial future, you can use Wealthsimple Trade. It doesn’t charge a management fee and there aren’t any trading commissions on stocks or ETFs. This allows you to build your own investment portfolio at a much lower cost. There also isn’t a minimum investment or minimum balance required to start trading.
Wealthsimple Trade currently only allows stocks, ETFs and certain crypocurrencies trading on Canadian and American exchanges. And you can only open a TFSA, RRSP, or personal trading account.
Wealthsimple Trade only charges fees for trades made on US exchanges and cryptocurrency purchases.
Wealthsimple prides itself on being an accessible, easy-to-use wealth management platform.
Wealthsimple Invest uses a computer-driven algorithm to make investment decisions on behalf of the investor. That means Wealthsimple Invest clients are not required to make trading decisions or monitor their investments. It charges a Management Expense Ratio (MER) in exchange for managing these accounts.
Upon sign-up, new investors must fill out a questionnaire that details their age, savings goals, and risk capacity. Portfolios are built automatically on their behalf.
Wealthsimple Trade and Wealthsimple Crypto requires more active trading and requires a little more experience. Investors must make decisions on which stocks or ETFs to purchase.
Tangerine has a few investing options if you want to invest in the stock market. It has five core portfolio mutual funds: balanced income, balanced, balanced growth, dividend, and equity growth. Each fund has an annual fee of around 1.05%.
The company also recently launched global ETF portfolios: balanced, balanced growth, and equity growth. These new mutual funds charge an annual fee of about 0.65%, which makes them comparable in cost to many robo-advisors.
Wealthsimple, unlike Tangerine, does not offer a full suite of banking products. They do, however, have a high interest savings account and a spending account.
Wealthsimple Cash was initially launched as something similar to a high-interest savings account (the rate is currently 0.75%), but has now evolved into a payments service. There are no fees and no limits on how many withdrawals you can make each month. Wealthsimple recently introduced the Wealthsimple Cash Card, compatible with Apple Pay, and Google Pay, which you can use to make everyday purchases. It works like a prepaid debit card and offers 1% cashback on certain purchases. They also have the Cash app (iOS and Android) with which you can instantly pay or receive funds for free from contacts who also use the app. Funds are withdrawn from your bank account or Cash Wallet.
The Wealthsimple Cash Card offers a unique financial opportunity for those who want to actively invest in stocks or cryptocurrencies while enjoying a 1% cash back benefit on their purchases. This prepaid card can also be a valuable tool for individuals seeking to manage their spending more effectively, as it restricts expenditures to the loaded amount. It does not, however, help you build credit.
Wealthsimple Save is a high interest savings account which offers 0.5% interest. However, it is a non-registered account and so you will have to pay tax on the interest accrued. There are no fees for this account.
Tangerine offers a variety of products. We’ll start with savings and chequing accounts.
The Tangerine Savings Account has no monthly fee and no minimum balance. You can also make an unlimited number of withdrawals without having to pay any fees. Currently, the interest rate is just 0.1%.
There’s also a U.S. dollar savings account as well as registered versions (TFSAs, RRSPs, and RRIFs).
The Tangerine No-Fee Daily Chequing Account has no minimum balance and no transaction fees. That means you can make an unlimited number of debit purchases, bill payments, pre-authorized payments, and Interac e-Transfers. The account even pays interest, but it’s minimal:
| Balance | Interest rate |
| $0 to $49,999.99 | 0.01% |
| $50,000 to $99,999.99 | 0.05% |
| $100,000 or more | 0.1% |
Tangerine also offers a couple of credit cards. The Money-Back Credit Card has no fee and lets you earn 2% cashback in two spending categories (or three if you have the cash deposited into a savings account). You also earn 0.5% on everything else. To apply for this card, you need an annual income of $12,000.
The Tangerine World Mastercard also has no fee and provides the same amount of cashback, but also comes with some great features that are available on rewards cards with an annual fee. These features include mobile device insurance, rental car collision/loss damage insurance, and free membership to Mastercard Airport Experiences.
The minimum annual income requirement to apply for this card is $60,000 or an annual household income of $100,000.
Apart from investing and banking features, Wealthsimple offers crypto and tax services. Let’s have a look at what they are:
Here’s a rundown of what else Tangerine offers:
| Wealthsimple | Tangerine | |
|---|---|---|
| Investment options | Stocks, ETFs | Mutual Funds, ETFs |
| Minimum investment | $0 | $25 |
| SRI and Halal Investing | Yes | No |
| Banking Features | Wealthsimple Cash; Wealthsimple Save | Chequing Account, Savings Account, Debit card, Credit card |
| Account types | TFSA, RRSP, RRIF, Non-registered | TFSA, RRSP, Spousal RRSP, RESP, LIF, LIRA, Non-registered |
| Additional Features | Wealthsimple Crypto; Wealthsimple Tax | Mortages; Lines of Credit; GICs |
| Mobile App | Yes | Yes |
In this Tangerine vs. Wealthsimple showdown, the choice between the two will vary based upon your banking and investing needs. If you want a mortgage or a spending account, Tangerine has you covered. If you want to trade stocks for free or let a robo-advisor do the work for you, Wealthsimple is your best option.
Although it’s a fairly new company compared to other financial institutions, Wealthsimple has a good reputation. Companies controlled by Power Corporation—run by one of Canada’s richest families—own a majority stake in Wealthsimple. Some other companies controlled by Power include Canada Life, IG Wealth Management, and Mackenzie Investments.
Wealthsimple’s affiliate, Canadian ShareOwner Investments is a member of the Investment Industry Regulatory Organization of Canada (IIROC). And customer accounts are protected by the Canadian Investor Protection Fund (CIPF). If Wealthsimple goes out of business, your account will be safe. However, this doesn’t protect you if the value of your investments decline.
The balances in Wealthsimple Cash’s accounts are covered by the Canada Deposit Insurance Corporation (CDIC). That means up to $100,000 is protected if Wealthsimple were to go out of business. The balances are held in a trust at a CDIC member institution. Wealthsimple is unable to disclose which banks are its partners due to contractual agreements.
Tangerine is owned by Scotiabank, one of Canada’s largest banks. Both Tangerine and Scotiabank are members of the CDIC.
Tangerine’s Canadian and U.S. dollar savings products, including its savings account, chequing account, guaranteed investment certificates (GICs), tax-free savings account, and retirement savings plan account are all eligible for CDIC insurance.
Since Tangerine has a variety of accounts that are covered by CDIC insurance, you can get more than $100,000 in coverage by depositing funds in a variety of accounts.
This will depend on what services you need and want. If you want a no-fee chequing account, your only option between the two is Tangerine. If you want to trade stocks for free, Wealthsimple offers this service and Tangerine doesn’t.
Tangerine mainly provides banking services and credit cards (along with low-cost mutual funds) while Wealthsimple primarily offers investment services but also has a high-interest savings account.
You’re likely going to need both depending on your financial goals unless you choose a larger financial institution where you can get both banking and investing services.
