In this Neo Financial Review, we’ll cover how the bank is bringing much-needed innovation to the Canadian banking space.
Before now, neo-banks and online banks were seen as financial institutions with lower overheads than their traditional brick and mortar banks peers. And with none of the cost of operating physical locations, they can offer higher interest and cost-savings to their customers.
However, Neo Financial takes things a step further by offering one of the best savings account rates in Canada and the most rewarding credit card in Canada.
But if you’re thinking of opening a Neo account, there’s a lot you need to consider to make an informed decision.
This Neo Financial review covers everything you need to know about the fintech company including its products, features, fees and how it compares to its competitors.
Read on to find out more about Neo Financial.
What is Neo Financial?
Neo Financial is a digital-first and online bank based in Calgary, Alberta. It was launched in 2020 by Andrew Chau, Kris Read, and Jeff Adamson to simplify the spending, savings and overall banking experience of Canadians.
To achieve its goal, Neo has partnered with reputable financial institutions including Concentra Bank, MasterCard, ATB Financial and other top financial giants in the industry.
Through its high-interest savings account, reward credit cards and other competitive products, Neo earned the trust of thousands of Canadians looking for a digital and seamless banking experience.
We’ll cover both of these products from Neo Financial in detail.
And at the end of this Neo Financial review, you should be able to understand what Neo entails, how it compares to its peers and the big banks and whether it’s the right option for you.
How Does Neo Financial Work?
Your journey with Neo Financial starts with opening a Neo Savings Account.
Though it’s an online account, the Neo Financial savings account operates like any other savings accounts from the big 5 banks with the added advantage of a competitive interest rate, no annual fee and no minimum balance.
Like traditional savings accounts, the Neo Financial savings account allows bill payments, cash deposits and withdrawals.
Also, the Neo Financial credit card works like every other credit card with the only difference of having a competitive cashback rate and optional monthly fees.
The Neo Financial credit cards reward cardholders generously upon making eligible purchases at partner stores.
You can apply for and get approved for a Neo Credit Card in less than 3 minutes. This is possible because everything is digital and all done online via their Neo mobile app or their online portal.
To start using your credit card immediately, simply add it to your Apple Pay or Google Pay wallets while waiting for the physical card to be mailed to you.
Neo Financial Products
From the beginning, Neo Financial started with two financial products: a high-interest savings account and a rewards or cash-back credit card.
Currently, Neo has expanded its offerings with investment and mortgage solutions.
1. Neo Card
Neo credit card operates like other Mastercard branded cards. The only difference between Neo card and other credit cards is that it offers competitive cashback with optional monthly fees.
The Neo card is offered by ATB Financial, one of Alberta’s largest financial, investment and wealth management institutions.
With Neo card, you will earn 5% average cash back at partner stores and 1% guarantee cash back for every other purchase.
The interesting part is that you will get 15% cash back on your first purchase with the card.
Unlike other credit cards, the Neo card doesn’t require a monthly fee or minimum income.
- High cashback rate
- No monthly fees for standard card
- 19.99% interest on purchase and 21.99% interest on cash advance
- No inactivity fee
- Welcome bonus
Want to learn more about all the credit card offerings and how they differ? Check this post – Neo Financial Credit Card Review.
2. Neo Savings Account
The Neo Savings Account is one of the top high-interest savings account in Canada.
Getting a savings account with a 2.25% interest rate in Canada means earning 225x more the interest you get from the big banks.
And the best part is you get this competitive rate on Neo savings account without those pesky monthly fees.
The Neo savings account allows you to make bill payments, do e-transfer and do many day-to-day banking activities without fees.
In short, you get unlimited free transactions without worrying about fees.
In addition, this account is covered by the CDIC because it’s held by the Concentra Bank, a federally regulated Schedule One bank.
That said, Neo savings account is available in all the provinces and territories of Canada except Québec.
- 2.25% high-interest rate
- No monthly fees
- No bill payment, electronic transfers, e-Transfers and inactivity fees.
- No minimum deposits
- CDIC protection
Learn more: Neo Financial Savings Account Review
3. Neo Invest
In April 2022, Neo launched an automated investment platform known as Neo Invest.
Neo Invest is powered by OneVest Management Inc, one of Canada’s leading Portfolio Managers.
With the launch of this automated investment platform, Neo seeks to help Canadians invest in low-cost and diversified ETF portfolios.
Investments on Neo Invest are actively managed and investors can start investing with as little as $1.
4. Neo Mortgage
Whether you’re looking to buy a new mortgage, renew or refinance an existing one, you can count on Neo Financial.
Neo partners with several mortgage providers to offer its clients access to the best rates in the market.
The Bank offers access to a relatively low 3.60% 5-year variable mortgage rate (closed)
You can apply for a mortgage through Neo in under 5 minutes as everything is handled online.
Neo Rewards Program
The Neo Credit Card stands out because of its higher rewards on purchases and the fact that Neo Financial has managed to sign up thousands of retail partners, with many more constantly being added.
Neo Financial has three reward programs corresponding to its 3 credit card offerings. Here’s a brief overview of the Neo rewards program.
- Neo Standard: The Neo standard reward program is tailored to Neo Standard credit card users. Hence, this program offers an average of 4% cashback at partner stores and 1% cash back for every other purchase without monthly fees.
- Neo Plus: This reward program is tailored to Neo Plus cardholders. With a $2.99 monthly fee, this program offers an average of 5% for purchases at partner stores and 1% for every other purchase.
- Neo Ultra: This program is tailored to Neo Ultra cardholders and offers 6% average cashback at partner stores and a 1% reward for every other purchase. The program charges a $8.99 monthly fee.
With thousands of partner stores, cardholders have many opportunities to earn cashback on their spending and purchases.
Note: The Neo tripartite reward program has expired. But you will earn an average of 5% cashback at partner stores and 1% guarantee for every other purchase.
How to Open a Neo Financial Account
You can open a Neo Financial savings account online through their web portal or through the Neo mobile app. To qualify, you need to meet the following requirements:
- Have a Canadian phone ID
- Live in Canada
- Reach the age of majority in your province
- Have 600 or more credit scores
Once you meet the above requirements, your new Neo account will be opened in a few minutes.
How to Apply for a Neo Credit Card
The first step you need to take to apply for the Neo credit cards is to sign-up for a Neo account. You can sign-up online or through the Neo mobile app available on Google Playstore and App Store.
A soft credit check is performed to evaluate your application. Neo will then issue your card once you meet all the eligibility conditions including the minimum credit scores requirement.
The good news is – the process is 100% digital, fast and convenient. In fact, it takes less than 3 minutes to get approved for the Neo Credit Card.
Neo Financial Pros and Cons
Neo Financial Pros
- High-interest savings account (HISA): Earn a competitive 2.25% interest on your Neo savings account. This is 2.25x the interest from the big banks.
- No-fee: Enjoy a competitive interest rate with no monthly fees, bill payment fees, electronic transfer fees, e-Transfers and inactivity fees.
- Competitive reward: Enjoy an average of 5% cash back for every purchase at Neo partner stores.
- No minimum deposits: Save as little as $1 on your high-interest savings and earn the same interest rate.
- CDIC protection: Have peace of mind knowing that your high-interest savings account is insured by the CDIC up to $100,00 per insured category.
Neo Financial Cons
- No chequing account: If you’re looking for a neobank with a hybrid of savings and chequing account, look elsewhere for now.
- Not available in Quebec yet
Is Neo Financial Legit?
Thinking the Neo Financial rewards card is too good to be true and wondering if it’s legit?
Absolutely! Neo Financial is legit and safe.
You get the same security on your deposits as you would get from any traditional bank. Even better, you get to earn better interest on your savings.
In terms of the safety of your information and data on the platform, Neo Financial has in place industry-standard security measures.
From your end, you can reset your PINs or freeze and unfreeze your Neo credit card at any time if you suspect any unauthorized access to your card.
Neo Financial Review: Our Rating Method
|Savings account interest rate||⭐⭐⭐⭐⭐|
Based on personal experience and the experience of others, we rate Neo Financial 4.5 out of 5 stars based on its high savings account interest, account fees, reward structure, security, accessibility and number of products.
Each feature was evaluated and rated based on its value and how it compares with other neobanks. No doubt, Neo performs well in most aspects of comparisons while scoring low on the number of financial products.
Overall, our Neo Financial review is positive and we recommend it to anyone looking for a high-interest savings account in Canada and competitive cashback credit cards.
How Neo Financial Compares
Neo Financial has several competitors in the market. But when it comes to choosing between top contenders, Canadians usually compare Neo with EQ Bank and KOHO, 2 other Canadian companies with innovative financial products.
Here’s a detailed overview of how Neo Financial compares with EQ Bank and KOHO.
Neo Financial vs EQ Bank
|Key Features||Neo Financial||EQ Bank|
|Interest on savings account||2.25%||1.65%|
|Free bill payments and Interac e-Transfers||Yes||Yes|
|Mobile cheque deposit||N/A||Yes|
|International money transfers and USD account||N/A||Yes|
EQ Bank is the online-only bank of Equitable Bank that has been in the industry since 2016. Like Neo, EQ Bank offers a high-interest savings rate that exceeds that of many other financial institutions in Canada.
Generally, the similarities between Neo and EQ Bank lie in their HISA, CDIC protection, zero monthly fees, free bill payments and Interac e-Transfers.
On the other hand, the two banks differ considerably in terms of financial products. While Neo offers a credit card, EQ Bank has none.
Unlike Neo Financial, EQ Bank offers a mobile chequing account, registered accounts, USD and International money transfers accounts.
And for those looking for tax-advantaged savings and investments, there is the EQ Bank TFSA and RSP Accounts.
Overall, both banks stand out among their peers with better rates on their HISA. So consider what your financial needs are when choosing between EQ Bank and Neo Financial.
Check here for a full Neo Financial vs EQ Bank comparison.
Learn more: EQ Bank review.
Neo Financial vs KOHO
|Key Features||Neo Financial||KOHO|
|Interest on savings accounts||2.25%||1.20%|
|Free bill payments and Interac e-Transfers||Yes||Yes|
|Average cashback rate||4%||0.5%|
KOHO is another top alternative to Neo Financial due to its savings account product. Like Neo, KOHO offers a HISA with free bill payments and Interac e-Transfers.
Both fintechs offer access to savings account with no monthly fees. Your deposit on either Neo Financial or KOHO is insured by the CDIC up to $100,000/insured category.
That said, Neo has a higher interest rate on its savings account than the KOHO interest rate.
Also, Neo credit card offers an average of 5% cashback while KOHO offers 0.5% on its prepaid card. Unlike KOHO, Neo doesn’t charge inactivity fees.
Unlike the Neo card, KOHO Visa cards don’t report to credit bureaus since they’re not credit cards so you can’t use them to build your credit.
But KOHO offers a credit-building service that costs $7 monthly for a 6-months cycle. Learn more about the service and how it can help you build or rebuild your credit in this KOHO Credit Building Review.
Again, the winner between KOHO vs Neo Financial comes down to what services you want. If you want a credit card with a high rewards rate, Neo Financial beats KOHO hands down.
On the other hand, KOHO has a better product suite and will probably help you do a better job of managing your finances with its innovative features like roundups, early access to paycheck etc.
Learn more: Neo Financial vs KOHO
FAQs on Neo Financial Review
Neo is a reputable company that has partnered with trusted and reliable financial institutions, such as Concentra Bank, MasterCard, and ATB Financial.
Neo Financial is safe and your deposits are secure. Deposits on Neo accounts are insured by the CDIC up to $100,000 and held at a Schedule I and federally regulated bank, Concentra Bank.
You need a minimum of 600 credit scores to open a Neo account. This is less than the requirements of many other neo-banks and banks in Canada.
No. Neo conducts a soft credit check to determine your eligibility to access its savings account or credit cards. This means your credit score will not be affected.
Neo credit card is accepted anywhere Mastercard is accepted.
Neo Financial savings account is not available in Quebec at the moment. However, Neo promises to operate in Quebec soon.
Final Thoughts on Neo Financial Review
No doubt Neo Financial has distinguished itself among other neo-banks in Canada. But when it comes to choosing a financial institution, you should narrow down your selection based on your needs.
Generally, you want to consider the products, features and fees of a bank before opening an account with it. If Neo Financial meets your requirements, you can’t make the wrong decision by switching to it.
If you’re looking for an account with one of the highest interest rates in Canada and a credit card that gives you above average rewards on your spending, then Neo Financial ticks all the bullet points,
So which of these online banks are you going with? Let me know in the comment below.
If you like this Neo Financial review, kindly explore our existing blog posts to learn more about the best financial products and services in Canada.
Neo Financial Review
Neo Financial offers competitive rates on its savings account and high cash back rewards on the Neo Credit Card