Canada's six largest banks—Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), and National Bank of Canada—collectively hold over 85% of the country's deposits. Despite this dominance, their interest rates on Guaranteed Investment Certificates (GICs) and high-interest savings accounts (HISAs) often lag behind those offered by smaller institutions.
For instance, as of July 2026, a one-year non-redeemable GIC at a Big Six bank typically offers around 2.45% to 2.70%, while digital banks like EQ Bank provide rates up to 4.75% for similar terms. This disparity means that a $100,000 investment could earn an additional $2,300 annually by choosing a digital bank over a traditional one.
The higher rates at digital banks are largely due to their lower operating costs, as they lack physical branches and associated expenses. In contrast, the Big Six banks maintain extensive branch networks and infrastructure, which contribute to their higher overhead costs.
This situation raises questions about the competitive dynamics in Canada's banking sector. While the Big Six banks offer convenience through their widespread branch networks, customers seeking better returns on their deposits may find more favorable options with digital banks.
Looking ahead, it's important to monitor how the Big Six banks respond to this competition. They may adjust their rates or enhance their digital offerings to retain customers. For consumers, staying informed about available rates and considering alternative banking options could lead to better financial outcomes.