Every year, digital banking becomes more commonplace in Canada. As banks continue to digitize their services, more online-only banks have sprouted up. Alterna Bank is one of the first digital-only banks to pick up on this trend.
So today, Insurdinary is here with the Alterna Bank review. We will talk about the pros and cons of banking with Alterna and whether you should consider becoming a member.
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About Alterna Bank
Alterna Bank, a subsidiary of Alterna Savings, first opened back in 2000. At the time, Alterna Bank was one of the very few online-only banking branches in the country. The parent credit union, Alterna Savings, has operated since 1908 and created Alterna Bank as part of its switch to online services. As the second-largest credit union in Ontario, Alterna Savings has over 215,000 members and $10 billion in assets under management.
Nearly 90% of Canadians say they use online banking, and Alterna Bank took advantage of that shift. Today, Alterna Bank is the first Canadian member-owned credit union outside of Quebec. Alterna Bank has a significant reach, with over 3,300 ATMs dotted across the country.
Although Alterna Bank is not the same as Alterna Savings, owning an Alterna Bank account makes you part of the larger Alterna Financial Group. You can also open accounts at both institutions at the same time.
What Banking Products Does Alterna Bank Offer?
Despite being an online-only bank, Alterna offers a range of banking services you would expect from brick-and-mortar financial institutions, including chequing accounts, savings accounts, mortgages, and investment products.
The single most popular financial product at Alterna is its no-fee chequing account. Alterna accounts allow customers to manage their finances entirely digitally. The no-fee account, as the name implies, has no monthly fees as long as the account holder keeps a minimum balance in the account. This chequing account allows unlimited withdrawals, transfers, bill payments, debit payments, and ATM withdrawals.
Alterna also offers unlimited Interac transfers for free.
Additionally, account holders can purchase overdraft protection for an additional $2.50 + interest per month. This chequing account is a great option for those who frequently travel to the United States, as you get access to free ATM transactions with Allpoint's fee-free interbanking network.
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Alterna bank also offers savings accounts with some of the highest interest rates in digital banking. The online savings account features a 2.00% interest rate — a good deal higher than the Canadian average of ~1.0%. Similar to chequing accounts, savings accounts allow free, unlimited transactions and do not require a minimum balance to open or maintain.
In addition to standard savings accounts, you can also open savings plans and income funds to save for retirement. Flexible savings accounts mean you won't have to pay tax on your gains until you withdraw the money during old age.
Alterna Bank was one of the first online-only banks to offer traditional mortgage products through its platform. Alterna offers both fixed-rate and variable-rate loans for terms of 1, 2, 3, 4, 5, 7, and 10 years. Mortgage rates are usually slightly under the Canadian national average.
In addition to low interest rates, Alterna mortgages have other enticing additional features to sweeten the deal. You can opt for flexible payment terms and pay a maximum of 20% of the loan value per year. Alterna even chips in $800 to help you cover any legal and appraisal fees.
You can also purchase mortgage insurance to protect your finances in the event of injury, disability, or loss of employment. Alterna Bank allows borrowers to complete the applications online, so the process is fast and efficient. Need more information about what is required for a mortgage application? Visit this article for a complete guide to preparation.
Alterna Bank also offers banking services for businesses, including business checking accounts and maximum credit lines of $300,000 through its partner, Thinking Capital. Business accounts have a $5 monthly fee though you can waive that fee by maintaining a $3,000 minimum daily balance.
Along with free credit and debit transactions, you also get unlimited Interac outgoing transfers and six incoming Interac transfers each month. Alterna Bank's flexible system is perfect for small businesses that need online banking services.
Additionally, Alterna Bank offers banking services for companies in the cannabis industry, including cash management solutions, wire transfers, payment services, and more.
Last but not least, Alterna Bank offers a small range of guaranteed investment products. GIC products are available for one-year up to five-year terms and require a $500 minimum purchase. Alterna Bank doesn't charge annual fees while you save, and the Canada Deposit Insurance Corporation (CDIC) insures all investments for a maximum of $100,000 per investor.
Alterna Bank recently integrated trading through its partner Qtrade's platform for direct investing. So when you open an account with Alterna Bank, you can open an account on Qtrade to manage your investments.
Is Alterna Bank Secure?
Alterna Bank is registered and abides by all relevant rules and regulations of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). All chequing and savings accounts are CDIC-insured, and the digital infrastructure protects against fraudulent account access from unauthorized users. In other words, you can rest easy knowing that your funds are as secure as they would be in any other bank.
Alterna Bank Pros and Cons
No Alterna Bank review would be complete without a list of pros and cons. Like any bank, working with Alterna Bank has advantages and disadvantages.
- Alterna Bank is 100% online, so you can manage your finances from any computer or smartphone device.
- Interest rates on savings accounts are significantly higher than the national average.
- Alterna offers most services you would expect from a traditional bank, such as chequing accounts, savings accounts, GIC products, mortgages, and more.
- Most accounts have no fees and allow unlimited deposits, withdrawals, transfers, and Interac transfers.
- The bank offers fully digital mortgages with competitive rates and flexible payment terms.
- The suite of business banking products is especially useful for small businesses.
- Alterna Bank offers special business and financial services for cannabis companies.
- Alterna Bank does not offer personal credit cards for individuals, but it does offer business credit lines through Thinking Capital.
- Alterna Bank's high-interest savings accounts have good rates, but some banks offer higher rates.
- Since Alterna is entirely online, in-person support is limited due to the lack of physical branches.
- The mobile app may have some interface and loading issues.
- Some customers report inconsistent experience with customer service.
Alterna Bank Customer Reviews
Overall, Canadians give Alterna Bank positive reviews online. Many customer reviews praise the free chequing accounts and high-interest savings accounts in addition to the simple mortgage application process. Moreover, many praise the online interface as responsive and intuitive.
The largest criticism of Alterna Bank is the quality of customer service. Many reviewers complain that the customer service team is difficult to contact and provides inconsistent answers. So if you choose to work with Alterna Bank, you may experience frustration getting customer support to answer queries.
Overall, Alterna Bank launched as one of the first online-only banking branches in Canada and has maintained a good reputation throughout its 20+ year history. Alterna Bank offers a streamlined online banking experience with low-fee chequing accounts and high-interest savings accounts.
Small businesses can take advantage of the no-fee business checking accounts and business credit lines. If you want to buy a house, Alterna Bank's flexible mortgage products may interest you.
If you want to change to online-only banking, we would recommend giving Alterna Bank a shot. The simple interface and straightforward product selection. So for our Alterna Bank review, we give a positive verdict.
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