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Best hybrid bank accounts in Canada

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Tyler Wade

By Tyler Wade

🗓️

Updated: November 27, 2024

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Given the current state of the economy, we’re all trying to stretch our savings.

While high-interest savings accounts (HISA), with their attractive interest rates and low or non-existent fees, are a great tool to give funds a boost, they often lack the flexibility of even the best chequing accounts.

But now there’s a new flexible, high-interest earning banking product that’s starting to make a splash with saving-savvy Canadians: Say hello to the hybrid bank account.

What is a hybrid bank account?

A hybrid bank account is a high-interest savings account and a chequing account in one.

It features the higher interest rate of a HISA with the daily usage flexibility of a chequing account. You can use a hybrid bank account as a place to just let your money sit and accumulate interest or use it almost as you would a chequing account for debit payments, withdrawals, Interac e-transfers, bill payments and more.

Canada’s best hybrid bank accounts

There are not as of yet many fully hybrid bank accounts in Canada, but here are some options that are worth investigating.

Best hybrid bank accounts

Features KOHO EQ Bank Wealthsimple Cash
- koho logo eq bank logo wealthsimple logo
Fees Essential: $0-$4
Extra: or $9 per month
Everything: $19/month. Comes with a 30-day free trial. 		No fees for everyday banking No fees for everyday banking
Interest Rate Essential: 3.5%
Extra: 4%
Everything: 5% 		3.75%* $1 invested: 2.75%
$100,000 invested: 3.25%
$500,000 invested: 3.75%
Prepaid Mastercard® earn rate on spending Essential: 1% cash back on groceries, transportation, food and drink
Extra: 1.5% cash back
Everything: 2% cash back 		0.5% cash back on every purchase Earn 1% back in stock, crypto, or cash
Is your money protected Yes, Canada Deposit Insurance Corporation Yes, Canada Deposit Insurance Corporation Yes, Canada Deposit Insurance Corporation
Get started Get KOHO Get EQ Invest with Wealthsimple

Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.

KOHO Essential

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Poor

Suggested credit score

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Pros

  • A no-fee account option

  • Earn up to 5% cash back on your purchases

  • Accepted worldwide, wherever Mastercard is accepted

  • Three account tiers, so there’s something for everyone

  • Earn interest on your account

  • RoundUps feature helps you save

  • Financial coaching is available

  • Features like Credit Building (to help you build your credit history) and Cover (to protect you from overdrawing your account)

  • Compatible with Apple Pay

  • Joint account option for families and couples

Cons

  • No physical branches or tellers

  • No RRSP, TFSA or RESP accounts

  • Customer service not on par with the big banks

  • Missing some banking features, like wire transfers, currency exchanges and multiple lines of business like financial planning, mortgages and insurance

Eligibility

Recommended Credit Score

Poor

Required Annual Personal Income

$0

Required Annual Household Income

$0

Pros

  • A no-fee account option

  • Earn up to 5% cash back on your purchases

  • Accepted worldwide, wherever Mastercard is accepted

  • Three account tiers, so there’s something for everyone

  • Earn interest on your account

  • RoundUps feature helps you save

  • Financial coaching is available

  • Features like Credit Building (to help you build your credit history) and Cover (to protect you from overdrawing your account)

  • Compatible with Apple Pay

  • Joint account option for families and couples

Cons

  • No physical branches or tellers

  • No RRSP, TFSA or RESP accounts

  • Customer service not on par with the big banks

  • Missing some banking features, like wire transfers, currency exchanges and multiple lines of business like financial planning, mortgages and insurance

Eligibility

Recommended Credit Score

Poor

Required Annual Personal Income

$0

Required Annual Household Income

$0

cash back on groceries, eating & drinking, and transportation

1%

interest earned on your account balance

3.5%

extra cash back at selected merchants

up to 5%

Annual Fee

$48

Foreign Transaction Fee

1.5%

KOHO can cover most of your essential needs in one place, depending on the level of functionality you choose.

Its core product is a prepaid card, in which you can add funds to your account and then use the card to make purchases at stores or withdraw funds from an ATM, just as you would with a credit or debit card. But you don’t have to worry about accumulating high-interest credit card debt because the card is prepaid and you can’t spend beyond what you put on it.

You can get started with KOHO Essential for $4/month. $0 annual fee when you set up a recurring direct deposit or make a monthly contribution of $1,000 or more to the card. with 1% cash back on groceries, eating & drinking, and transportation and while earning 3.5% interest on your account balance. You can easily upgrade to KOHO Extra or Everything plans in-app to earn higher interest rates on your account balance and spending: Earn 4% on your account balance and up to 1.5% cash back on your everyday spending with Extra and a whopping of 5% on money in your account and up to 2% on everyday purchases with the Everything plan. 

With Extra and Everything, you also get discounts on their credit building program and pay no foreign transaction fees. 

EQ Bank Card

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2.9

Fair

Suggested credit score

to receive the latest news, tips and offers by email

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Pros

  • No FX fees (up to 2.5%)

  • Earn 0.5% cash back on every purchase

  • Free ATM withdrawals in Canada (EQ will reimburse you)

Cons

  • ATM fees charged abroad (EQ will not reimburse)

Eligibility

Recommended Credit Score

Fair

Required Annual Personal Income

$0

Required Annual Household Income

$0

Pros

  • No FX fees (up to 2.5%)

  • Earn 0.5% cash back on every purchase

  • Free ATM withdrawals in Canada (EQ will reimburse you)

Cons

  • ATM fees charged abroad (EQ will not reimburse)

Eligibility

Recommended Credit Score

Fair

Required Annual Personal Income

$0

Required Annual Household Income

$0

Cash back on purchases

0.5%

Interest on your balance

2.00%

Annual Fee

$0

Foreign Transaction Fee

0%

With no monthly account fees and one of the highest savings account interest rates in the country, the EQ Bank’s Personal Account is one of Canada’s top hybrid account options.

The account features an impressive 2.50%* standard (i.e. not just promotional) interest rate, which goes to 3.75% when you set up direct deposit. You can also treat the EQ Personal Account like a hybrid account, because you can use it to pay bills and take advantage of free Interac e-Transfers®.

My favourite part of EQ bank is you can use any ATM in Canada and not pay any fees. EQ bank will reimburse you for those fees making it a super accessible banking card. If you're buying something directly with the card, you'll earn 0.5% cash back on all purchases. 

Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.

Wealthsimple Cash card

Apply now

Poor

Suggested credit score

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Apply now

Pros

  • Earn 1% cash back on all purchases

  • Choose whether your cash back goes to your investments or crypto or cash account

  • Earn up to 5% on your balance

  • No foreign exchange fees

  • No annual fees

  • $5 reimbursement per withdrawal for any ATM fees

Cons

  • No insurance

  • Relatively low spending and transaction limits

Eligibility

Recommended Credit Score

Poor

Required Annual Personal Income

$0

Required Annual Household Income

$0

Pros

  • Earn 1% cash back on all purchases

  • Choose whether your cash back goes to your investments or crypto or cash account

  • Earn up to 5% on your balance

  • No foreign exchange fees

  • No annual fees

  • $5 reimbursement per withdrawal for any ATM fees

Cons

  • No insurance

  • Relatively low spending and transaction limits

Eligibility

Recommended Credit Score

Poor

Required Annual Personal Income

$0

Required Annual Household Income

$0

Earn at least 4% on your account balance

4%

Get 1% cash back on all purchases

1%

There are no foreign exchange fees

0%

Annual Fee

$0

Foreign Transaction Fee

0%

Wealthsimple Cash describes itself as “Canada's highest-interest chequing account.”

It’s a no-fee hybrid account that offers a solid interest rate and the flexibility of a chequing account. The account features unlimited free transfers between your outside bank accounts, as well as no monthly fees or minimum balance requirements.

You get up to 8 accounts so you can hold your emergency savings, sinking funds, slush funds or any sub-account to hit any savings goal you have. 

The Wealthsimple prepaid Mastercard gives you 1% cash back on all purchases (or you can direct those funds into your crypto or investing account). 

How is a hybrid bank account different than a traditional bank account?

Hybrid bank accounts are a relatively new product and, thus far in Canada, are offered only by non-traditional, online-only banks, credit unions, or innovative fintech companies like Wealthsimple.

Traditional banks generally still insist on keeping the savings and chequing account as separate entities with low interest and high fees.

In Canada, average interest rates for a savings account are .05% or lower.

Though some banks offer higher interest rates, they are usually only good for a set promotion period to get new customers. Or the higher interest rates are just available to clients who keep a huge minimum amount in their accounts—money that would do much better in a HISA or in an investment account.

The same limitations exist for traditional banks’ chequing accounts, which typically offer little to no interest and charge monthly account fees, unless you maintain a large minimum balance in the account.

Hybrid accounts, however, offer solid interest rates that typically range between 0.9% to 2% (note these are not promotional rates but standard rates). They usually don’t charge fees, allow unlimited transactions, and have no minimum balance requirements.

Pros and cons of a hybrid bank account

Pros

Pros

  • Low or no fees for a variety of (often) unlimited transactions

  • Flexible

  • Higher interest rates

Cons

Cons

  • Some financial institutions have not implemented all the features of their hybrid accounts

  • No physical locations

  • Still need a traditional bank to deposit cash

Who should use a hybrid bank account?

Anyone comfortable using an online-only bank would appreciate the no-frills, high-gain benefits of a hybrid account.

Many of the hybrid accounts available in Canada don’t yet offer the full functionality of a chequing account, so you may need to have at least one chequing account with another institution in order to cover all your banking needs (see more details in the specific account reviews above).

Who shouldn’t use a hybrid bank account?

If you like going into a brick-and-mortar bank and feel uncomfortable with online banking, a hybrid bank account may not be the best option for your banking needs. Some people also prefer to keep all their various bank accounts, mortgages, investment products, and credit cards with the same bank for the sake of convenience.

Are you going to get a hybrid bank account?

If you're comfortable going fully digital, this is don't-miss opportunity.

In my opinion, a hybrid account is what most Canadians have been waiting for. Great interest rates make it much easier to boost your savings and the flexibility means you’ll enjoy the purchasing power of a chequing account without worrying about fees. 

FAQs

  • Are hybrid bank accounts taxable?

    +

    Just as with any regular savings or chequing account that is not a registered account (like a TFSA or RRSP) you will have to pay tax on any interest you earn. Note that you only pay tax on the interest you accrue and not the deposit amount.

  • Are hybrid bank accounts safe?

    +

    Yes. All the hybrid bank accounts mentioned above are safe. Funds with EQ Bank and KOHO are insured by the Canada Deposit Insurance Corporation up to $100,000.

Tyler Wade Content strategist & writer

Tyler Wade has worked in personal finance for over 5 years writing for brands like Ratehub, Forbes, KOHO, and now Money.ca.

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