This Neo Financial vs Koho comparison takes a look at how the 2 financial technology companies stack up against themselves.
The preference for neo-banks and fintech services over traditional banks continues to grow as they allow Canadians save on banking fees while earning higher interest rates on their savings.
Some of the Canadian neo-banks currently shaking the banking industry include Neo Financial and KOHO.
This Neo Financial vs KOHO review covers everything you need to know about the two banks/apps including their services and pricing to help you make an informed decision.
Neo Financial Overview
Neo Financial is a digital-based bank in Canada offering low-cost banking solutions, such as savings accounts and credit cards.
Like other neo-banks in Canada, Neo Financial is able to offer low-cost banking solutions due to its low cost of operation.
These banking services are made possible due to its collaboration with ATB Financial, Concentra Bank, MasterCard and other leading financial companies.
Though it is still a newcomer that was established in 2020, Neo Financial is currently competing with many Canadian online banks with its high-interest savings account and competitive cashback credit card.
Neo is headquartered in Calgary, Alberta and has thousands of retail and e-commerce partner stores spread across different locations in the country.
Neo Financial Products
Neo offers a high-interest savings account, cashback credit cards, mortgage marketplace and investment solutions.
These products have some very competitive features that you can’t easily find elsewhere or that compare well to other competitors.
Now, let’s take a detailed view of Neo Financial products.
1. Neo Card
Neo Financial offers a credit card operating as a cashback Mastercard.
The Neo credit card is a freemium card that offers an average of 5% cashback at partner stores.
In addition, the Neo Card offers a 1% flat cash back for purchases at non-partner stores.
Like other Mastercard, the Neo Card is accepted everywhere Mastercard is accepted worldwide.
As a new cardholder, Neo offers you a 15% welcome bonus depending on your purchase offer and partner.
Cashback earning opportunities with Neo Card range from local to international stores such as Avis, Craft, H & R Block, Frank and Oak etc.
Learn more: Neo Financial Credit Card Review
2. Neo Money & HISA
At the moment, there can’t be a ranking of the best high-interest savings accounts in Canada without mentioning Neo Financial Money Account and Hghest Savings Account.
This is because the Neo Money Card offers 2.25% while the HISA offers 3.40% interest on savings without monthly fees.
Furthermore, Neo savings doesn’t have the following common savings account fees in Canada:
- Banking fee
- Inactivity fee
- Bill payment fee
- Electronic transfer fee
- Interac e-Transfer fee, etc.
Deposits up to $100,000 per insured category on Neo Savings Account are insured by the CDIC. That said, you can deposit up to $200,000 in your Neo savings account.
Learn more: Neo Financial Savings Account Review
3. Neo Invest
Neo introduced an automated investment platform known as Neo Invest in April 2022.
The automated investment platform powered by OneVest Management Inc, one of the top Portfolio Managers in the country.
With Neo Invest, Canadians can enjoy low-cost robo-advisory service and access a diversified ETF exposure.
Unlike other robo advisors in Canada, Neo Invest doesn’t have a minimum investment requirement. This allows you to start investing even with $1.
4. Neo Mortgage
Neo Mortgage is a marketplace that brings together the best mortgage deals in Canada.
You can buy a new mortgage, refinance or renew an existing mortgage through the Neo Mortgage platform.
By partnering with multiple mortgage lenders in Canada, you’re sure to find the best deal according to your needs.
Neo Financial Pros and Cons
Neo Financial Pros
- High-interest savings account
- High cashback rate
- $0 monthly fees
- Free bill payments
- No Interac e-Transfer fee
Neo Financial Cons
- No joint account
- No registered accounts
- Limited products
KOHO is a financial technology (FINTECH) company that started operating 2014, offering low-cost financial solutions to over 350,000 Canadians.
Based in Toronto, KOHO is unique in the sense that it is an app with different products in one – some of which you can’t find at the other Canadian fintech apps and neo-banks.
The KOHO savings account is a high-interest savings account sharing similar features with other HISA in Canada.
However, the KOHO prepaid reloadable Mastercards and KOHO credit builder have rare and attractive features for people looking to avoid credit card debt, spending wisely and build their credit score.
These unique and innovative products distinguished KOHO from other digital banks and fintechs in Canada.
KOHO offers a range of financial products ranging from savings, prepaid Mastercards and credit builder.
Let’s take a detailed view of each KOHO product.
1. KOHO Savings Account
This is a high-interest savings account offering up to 5% interest currently. This interest applies to your KOHO Essential plan that charges $4 per month.
With free e-Transfers and zero minimum balance, the KOHO savings account offers up to 2% cashback on select purchases with the KOHO prepaid Mastercard.
Another cool feature of the KOHO app is the Roundups feature. Through the feature, your spending is rounded up to the closest dollar automatically and deposited to your savings account.
This is an hands-off and automated way to build your savings without lifting a finger. Just set it once and KOHO will take care of the rest.
Moreover, all deposits up to $100,000 per insured category on KOHO savings accounts are insured by the CDIC.
2. KOHO Mastercards
KOHO partnered with Peoples Trust to offer reloadable Mastercards to Canadians.
Unlike credit cards, KOHO reloadable Mastercards allow you to use only the funds you have deposited in your account, helping you avoid credit card debt.
But like credit cards, you can use a KOHO reloadable Mastercard to make purchases at eligible stores and earn variable cash back depending on the KOHO card you have.
There are two variations of KOHO Mastercards, KOHO prepaid Mastercard and KOHO premium Mastercard. Let’s take a detailed view of each of them.
1. KOHO Prepaid Mastercard
KOHO Prepaid Mastercard is a no-fee reloadable Mastercard that comes with the basic KOHO account.
It comes with a 1% flat cashback on all purchases and you can cash out all your earnings at any time through the in-app.
You can also lock your card in-app, access early payroll and free financial coaching all in one dashboard through the basic KOHO account.
And if you want to share your bills with your spouse or roommate, the KOHO joint account allows you to do so while enjoying the same features of the KOHO prepaid Mastercard account.
The major benefits of the KOHO joint account include:
- Bill sharing
- Instant notifications for all account holders purchase
- Savings goal sharing
That said, if you want more benefits such as higher cash back and no FX fees, you can upgrade to KOHO premium.
2. KOHO Premium Prepaid Mastercard
As the name implies, KOHO Premium Prepaid Mastercard is an advanced version of the KOHO prepaid card, offering up to 2% cashback with 2% interest on your balance.
This card charges $9 monthly or $84 annual fees in exchange for premium features, such as:
- One free monthly international ATM withdrawal
- $0 FX fees
- Price matching
- Financial coaching
However, KOHO premium has a 30-day free trial. This means you can enjoy free premium access in your first month of registration.
One of the drawbacks of this card is that you can only earn 2% cashback for groceries, transportation and restaurant spending.
Unfortunately, you can’t choose which spending categories you want to earn higher cash back on like some credit cards, like Tangerine Credit Card, lets you do.
Every other spending earns you 0.5% cash back.
Update: KOHO now has four MasterCards. The following table shows how they compare:
3. KOHO Credit Builder
Since KOHO Mastercard doesn’t improve credit scores, KOHO Credit Builder exists to fill the gap. This program helps build or rebuild your credit score by reporting your transactions to credit bureaus.
KOHO Credit Builder requires a $5 to $10 monthly fee deducted automatically from your spendable account. The program lasts six months, but you can renew your subscription if you don’t get the required results.
This program is ideal for those that are not eligible for credit cards due to bad credit. Otherwise, it’s better to subscribe to a credit card that automatically reports your transactions to credit bureaus at no cost.
Learn more: KOHO Credit Building Review
KOHO Financial Pros and Cons
- High-interest savings account
- No monthly fees on the KOHO’s regular prepaid Mastercard
- Automatically roundups purchase to the nearest dollar
- Access to $100 ahead of payroll
- Real-time data on spending habits
- Limited benefits on no-fee account
- No effect on credit score
- Limited account types – no registered accounts supported
Neo Financial vs KOHO
So far, we have covered the main products offered by Neo Financial and KOHO.
The table below summarizes the similarities and differences between the two fintech companies at a glance.
|Savings account interest rate||2.25% to 3.40%||3% to 5%|
|Account fees||None||No monthly fees for the KOHO savings account and prepaid card. |
Monthly fees apply for KOHO premium card, Credit Builder and other services.
|Free Interac e-Transfer||Yes||Yes|
|Average cashback rate||5%||1%|
From the table above, it is clear that KOHO and Neo Financial are similar to some extent.
Both of them offer some of the highest savings account rates in Canada, they don’t support registered accounts yet and offer no-fee accounts on the basic plans.
Next. we’ll take a detailed view of the key similarities and differences between KOHO vs Neo Financial.
Neo Financial vs KOHO: Savings Interest Rate
Both Neo Financial and KOHO offers decent interest on your funds – more than 100x what you would get from one of the big banks.
While KOHO and Neo Financial offer high-interest savings accounts, KOHO offers a higher rate of up to 5% than Neo’s 3.40% rate. Although you need to pay a $4 monthly fee to access the KOHO 5% savings rate.
In addition, KOHO rounds up your purchases to the nearest dollar to help you save more. This benefit is not available at Neo Financial.
Neo Financial vs KOHO: Cash Back
Neo Financial also beats KOHO hands down on cashback rate. The standard Neo credit card offers 5% average cash back on purchases at partner stores and 1% at non-partner stores.
On the other hand, the KOHO prepaid Mastercard offers an average of 1% on select purchases.
While you can earn up to 2% regular cashback with the KOHO premium Mastercard this is only limited to groceries transportation, food and drink spending.
This is very low when compared with Neo credit card cashback structure.
Neo Financial vs KOHO: Credit Card
KOHO offers reloadable prepaid Mastercard s while Neo Financial offers credit cards. Unlike Neo card, your transactions with KOHO prepaid Mastercard are not reported to credit bureaus.
To get your transactions reported to credit bureaus with a KOHO card, you must subscribe to KOHO Credit Builder, which costs $5 to $10 per month.
Unless you have a bad credit that disqualifies you for a credit card, subscribing to KOHO Credit Builder is costly and can be avoided.
Preferably, you should use a Neo Financial credit card and have all your transactions reported to credit bureaus without paying a dime while earning some decent cash back.
Neo Financial vs KOHO: Accounts
Both KOHO and Neo Financial don’t have registered accounts such as TFSA, RRSP, RESP etc. However, if you’re looking to open a joint account, you have no other option here than KOHO.
Hopefully, both companies will expand their account offering in the future.
Neo Financial vs KOHO: Deposit Protection
The Canada Deposit Insurance Corporation protects your KOHO and Neo Financial deposits up to $100,000 per insured category.
Both KOHO and Neo Financial have partnered with CDIC member institutions. That means your deposits are covered with the same deposit insurance that you get with your funds at any of the big banks.
Learn more about how CDIC protection works.
KOHO vs Neo Financial: What is the Best Choice?
The goal of this KOHO vs Neo Financial comparison has been to provide an objective review that helps you decide which of the two emerging bank alternatives best suits your banking needs.
Hopefully, you now have all the details you need to consider when choosing between KOHO vs Neo Financial.
It’s worth emphasizing at this point that both Neo Financial and KOHO are among the leading digital banks and fintechs in Canada. This is based on their innovative and competitive products that you can’t easily find elsewhere.
So you really can’t go wrong in choosing either KOHO or Neo Financial as long as you go with the one that best suits your banking needs.
Overall, Neo Financial is your best option here if you’re looking for a neo bank with a:
- High-interest savings account
- High cashback reward
- Credit card features
- No inactivity fee
However, KOHO is your best option if you’re looking for an online bank with:
- decent savings rate
- early payroll access
- Credit building program
- Joint account
As you can see, Neo Financial is ahead of KOHO in some ways, while KOHO leads the pack in other areas.
So start with your banking needs and go with one of these top neo-banks/fintechs.
Choosing between Neo Financial vs KOHO may seem difficult at first, but not when you know what they offer and how they meet your financial goals.
By identifying your banking needs and comparing KOHO and Neo Financial features, you can easily make the best decision yourself.
If you need more clarification on this Neo Financial vs KOHO comparison, please leave a comment below.
Kindly explore through our other relevant posts to learn more about the best financial products and services for you.