Online Banking vs. Branch Banking in Canada

You can manage your bank account through branch banking or online banking — both offer similar services but with some distinct features.

Before the advent of internet banking, most financial transactions required visiting a bank or credit union. Today, technological advancements allow you to bank remotely from your computer, tablet or smartphone.

Understanding the core differences between online banking and traditional branch banking can help you choose the option that works best for you.

What is online banking?

Online banking, sometimes called digital banking, allows you to manage your finances anytime, anywhere using your bank’s website or mobile app. You don’t have to work around the bank’s schedule or plan a visit to a branch to conduct regular transactions.

These tasks may include:

Depositing cheques.
Transferring money between accounts.
Making investments.
Paying bills and taxes.
Sending and receiving Interac e-transfers.
Opening a new bank account.
Applying for a credit card.

🤓 Nerdy Tip: Online banking often includes enhanced security measures, but make sure you’re diligent about guarding your password and account numbers.

Online banking has become a preferred way to bank for many Canadians, especially since the the COVID-19 pandemic. More than two thirds of Canadians who have financial accounts (69%) say one of the most important bank services/features to them is online access, according to a survey of 1,030 Canadian adults conducted online by The Harris Poll on behalf of NerdWallet from September 3-6, 2024.

Many Canadian traditional banks and credit unions offer online banking options. In addition, a variety of online-only banks provide competitive advantages, such as better interest rates, lower fees and better perks. Since these institutions don’t have to pay the staffing and overhead costs faced by brick-and-mortar banks, they can pass on the savings to their account holders. However, online banks tend to be smaller with limited financial offerings than major banks.

If you’re thinking of opening an account with an online-only bank, make sure it offers the products and services you may need, such as high-interest savings accounts and access to automated teller machines (ATMs).

What is branch banking?

Branch banking — also known as retail or traditional banking — refers to the act of conducting financial transactions at a physical bank location.

You can manage basic banking needs, such as withdrawing or depositing cash, at an ATM. However, for more complex banking requests or advice on specialized financial products, you may need to speak with a teller, or make an appointment with a financial advisor at a branch.

The trade-off with branch banking is that you must visit the branch during its set operating hours. However, it offers human connection and personal assistance, which people may find valuable.

Differences between online banking and traditional banking

The main differences between online banking and traditional banking come down to convenience and human interaction.

Online banking enables you to complete many types of transactions from the comfort of your home. However, you can’t withdraw cash or use a safety deposit box on your computer or mobile phone. To withdraw cash or to store your valuables in a safe deposit box, you’ll need to rely on traditional banking.

Here’s a quick rundown of the pros and cons of online banking vs. traditional banking.

Online banking pros and cons

Pros of online banking

Accessible anytime, anywhere you have internet access.
Allows you to handle most banking transactions independently.
Online banks may offer better rates and fees.

Cons of online banking

No human connection (though, this may be a pro for some).
Can’t handle all types of transactions, such as withdrawing cash or using a safety deposit box.
Online-only banks may have a limited selection of offerings.
Some people may feel uncomfortable doing online banking due to security concerns or lack of familiarity.

Branch banking pros and cons

Pros of branch banking

Human interaction (though, this may be a con for some).
Ease to withdraw cash.
Offer access to a wider variety of products and features.

Cons of branch banking

Only accessible during the bank’s hours of operation.
Requires travelling to a physical bank.
May come with higher fees than online banks.
Savings interest rates may be lower depending on the type of bank.

How to choose between online banking and branch banking

The great thing is, you don’t have to choose. No one type of banking is better than the other, and many Canadians use a combination of both.

For example, you may handle day-to-day money tasks, such as e-transfers and bill payments via online banking, and visit your local branch for more intricate or in-person services, including personal verification and investment advice.

Ultimately, whether you use online banking, traditional banking or both will depend on your personal needs and preferences.

This survey was conducted online by The Harris Poll on behalf of NerdWallet from September 3-6, 2024 among 1,030 Canadian adults ages 18 and older. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 3.6 percentage points using a 95% confidence level. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact Bria Weaver at [email protected].

About the Authors

Siddhi Bagwe

Siddhi Bagwe is a content management specialist at NerdWallet Canada. Treating content marketing as an educational medium for readers, Siddhi believes in empowering them with the knowledge of personal finance…

Hannah Logan

Hannah Logan is a freelance writer and blogger who specializes in personal finance and travel. You can follow her personal travel blog EatSleepBreatheTravel.com or find her on Instagram @hannahlogan21.