Neo Financial Review: High-Interest Savings and Credit Card Rewards with a Twist
Neo Financial is a Canadian fintech company offering a digital alternative to traditional financial services. With Neo, you can spend, save and earn all in one easy-to-use place
Neo Financial was founded by the same people who built Skip the Dishes into an international food delivery empire, so they know a thing or two about delivering innovative tech products.
According to their website, Neo is “on a journey to reshape the financial future for millions of people in Canada.”
It’s an ambitious goal and one that’s worth investigating. In this review of Neo Financial, I look closely at 4 Neo products, Neo MoneyTM, Neo CardTM, Neo InvestTM, and Neo MortgageTM.
Introducing Neo Financial
Neo Financial began in 2019, a startup effort by Skip The Dishes co-founders Andrew Chau and Jeff Adamson, along with Kris Read and Chris Simair.
They’ve partnered with two Canadian financial institutions – Concentra Bank and ATB Financial – to bring Canadians two primary products, a high-interest savings account and a no-fee rewards Mastercard.
Neo Financial branded credit cards are issued by ATB Financial through their relationship with Mastercard.
Neo Money is a single account that allows you to save and spend in one place. Currently, you can earn 2.25%1 on your savings, which is one of the highest interest rates in Canada.
In addition to an attractive savings rate, you benefit from unlimited free transactions, Interac® e-Transfers, and bill payments.
You can even have your payroll deposit directed into your Neo Money account, saving you the hassle of transferring money from your existing bank account.
Neo Money Features
- Unlimited, free transactions
- No annual or monthly fees
- High standard interest rate (2.25%)1
- Set up direct deposit
- Free Interac® e-Transfers
- Make free bill payments via the Neo Financial app
- You can open an account within minutes
Is Neo MoneyTM Safe?
The short answer is that yes, Neo Financial is safe. Their mobile app uses similar levels of security and encryption that you’ll find with most online banks. If you’re comfortable using your primary bank’s online banking, you should be comfortable with Neo Financial.
The Neo Money account is provided by Concentra Bank, a CDIC member institution, and is eligible for CDIC deposit protection. Deposits held in Neo Money accounts are combined with eligible deposits held at Concentra Bank, for up to $100,000 of deposit protection, per category, per depositor.
For more information about CDIC deposit insurance, please consult CDIC’s website cdic.ca
Summary of Neo MoneyTM
If you’re a fan of banking online and are looking to simplify your day-to-day transactions, Neo Money has plenty to offer. None of the big banks can match their combination of no fees and a high savings interest rate.
Their closest competition would be EQ Bank, which offers many of the same features (no fees, free Interac® e-Transfers) and a slightly higher interest rate (2.50%).
However, EQ lacks a spending card, so you must move funds to your regular bank account in order to spend money. If you get a Neo CardTM, a Mastercard product, you can make purchases with the card, earn rewards, and then pay off the balance from your Neo Money account.
Open a Neo Money account today.
Introducing the Neo CardTM
Neo Financial puts a unique twist on the rewards credit card, with the Neo Card. The Mastercard product displays the Neo brand but is backed by ATB Financial, an Alberta-based financial institution with more than 700,000 customers and $51 billion in assets.
Who Can Apply?
Anyone who meets the following criteria is eligible to apply for a Neo CardTM: You are over the age of majority in your province or territory of residence, have a Canadian photo ID, and are a Canadian resident.
How the Neo CardTM Works
There is no monthly or annual fee with the Neo Card. You earn cashback rewards when you spend money at 8000+ Neo partners, which include bill payment categories. You can boost rewards by subscribing to one or more Neo perks, which are theme-based rewards, like Travel or Food & Drink.
According to Neo, the average cashback is 5%2, but you can earn up to 15%2 on your first purchases as a welcome bonus from Neo partners.
Neo offers a Secured Card option as well. If you don’t qualify for a standard card, they guarantee your approval3 for a secured card, as long as you meet the following conditions: Age of majority in your province or territory of residence; be a Canadian resident, and; provide security funds. Learn more about the Neo Secured Card.
Neo CardTM Perks
Here is the list of Neo perks you can subscribe to when you receive your Neo Card:
Premium Access: Earn up to 20% cashback2 on first-time purchases with Neo partners, get access to exclusive offers2, plus extended warranty and purchase protection coverage4. Get Premium Access with your Neo Card today. Price: $0.99 per month, Valued at over $100 each year5
Travel: Get worldwide airport lounge access6, 2% cashback on foreign transactions, and travel insurance coverage7 including trip cancellation, car rentals, and more. Learn more about Neo Travel. Price: $4.99 per month, Valued at over $360 each year5
Mind & Body: Unlimited online fitness and mindfulness classes and bonus cashback at partner studios and gyms2. Price: $9.99 per month, Valued at over $430 each year5
Everyday Essentials: 1.5X rewards boost2 at Neo grocery, gas and liquor store partners. Also, get boosted cashback2 at major wholesale stores. Find out more about Neo Essentials. Price: $8.99 per month, Valued at over $170 each year5
Food & Drink: 1.25X cashback2 at Neo partner restaurants, coffee shops, bars, food delivery apps, and more. Price: $1.99/month, Valued at over $70 each year5
Mobile and Personal Protection: Damage and theft protection8 for your mobile device, secured password management, and $1 million coverage against fraud and identity theft9.. Price: $9.99 per month, Valued at over $420 each year5
The Neo Card perks are a unique twist on loyalty rewards, but the monthly subscription fees add up, especially if you subscribe to multiple bundles. You really have to decide whether you will spend enough for the rewards to outweigh the cost of the subscriptions.
Neo CardTM Features:
- Earn unlimited cashback rewards from 8000+ Neo partners
- Sign up in 3 minutes and begin using your digital card instantly
- No monthly or annual fees
- Boost your rewards by subscribing to one or more Neo perks
- Earn an average of 5% cashback2 from thousands of Neo partners
- Tap and pay directly from Apple Pay or Google Pay anywhere Mastercard is accepted
- Secured Card deposit can range from $50 to $10,000
- Purchase interest rate (19.99%-26.99%)
- Cash Advance interest rate (22.99%-28.99%)
Is Neo a Real Credit Card?
Unlike some digital banks, like Koho or Stack, which offer prepaid credit cards, the Neo Card is an actual credit card. You’ll have a credit limit and the option of making a minimum monthly payment or paying the balance in full each month. Of course, your best bet is to always pay it off in full.
Apply now for the Neo CardTM and get $25 as a signup bonus.
Wondering what to do with your extra savings? You can now build a diversified investment portfolio with Neo Invest. Choose between personal (non-registered), RRSP, and TFSA account options. Portfolios are managed by OneVest, a portfolio manager registered in every Canadian province and territory.
Before you open your account, you’ll be taken through a guided questionnaire which will assist you in determining your investment goals. When you’re ready to proceed, you can start investing with as little as $1. And while your investments are managed automatically, you can make changes at any time.
Neo Invest Features:
- Non-registered, RRSP, and TFSA account options available
- Invest with as little as $1
- Discretionary management leaves the investment decisions to the professionals
- Professionally managed and automatically rebalanced
Neo partners with 5 different mortgage lenders to find you the best possible mortgage rates. You can start by applying online and receiving assistance from a Neo Mortgage advisor. Because you can upload any required documents, you can get a mortgage, refinance or renew your existing mortgage all from the comfort of your home10.
There are no fees to apply for a mortgage through Neo, as they are compensated by the various lenders who acquire business from Neo customers. In addition to applying for a new mortgage, Neo can help you shop for a mortgage rate when your existing mortgage is coming up for renewal. They also handle mortgage refinances.
Neo Financial Customer Support
If you run into problems or have questions of a general nature, Neo’s support team is only a phone call away. You can speak to a representative seven days per week, between 8 AM and 8 PM Mountain Standard Time. Their toll-free number is 1(855) 636-2265. If your question isn’t urgent, you can also email the support team at [email protected].
Neo Financial Pros and Cons
Neo Financial is a relative newcomer to the financial services industry, but its product offering continues to grow. While they started with two products (a high-interest savings account and a credit card), they’ve grown to offer an improved loyalty rewards program, managed investment portfolios, and mortgage services. With that in mind, I’ve compiled a list of Neo Financial’s pros and cons:
- No monthly or annual fees with Neo MoneyTM
- High standard savings rate (2.25%)1
- Unlimited transactions
- Available direct deposit
- Free bill payments
- Free Interac®e-Transfers
- Flexible credit card rewards with Neo perks
- Virtual credit card option for payment convenience
- No monthly or annual fees on the Neo Card
- Now offer RRSP and TFSA investment accounts
- Lack the product offering of big banks, i.e. loans, lines of credit, stock trading
- Best cashback rewards are limited to Neo partners
- No cheque writing privileges (not a true chequing account)
- Neo Bundle subscriptions might not be worth the monthly expense
Final Thoughts on Neo Financial
Neo Financial positions itself as an alternative to the traditional bank. However, their stiffest competition comes from Canada’s leading digital banks, like EQ and Tangerine. You could also add Simplii Financial into the mix.
While EQ Bank may offer a slightly higher savings interest rate, you can’t earn rewards when you spend, and EQ doesn’t offer a debit or credit card. Tangerine has more available products and they have a couple of very good reward credit cards of their own, but their savings interest isn’t as high as Neo Money.
If you are looking for a simple way to spend, save, and earn rewards, Neo Financial is undoubtedly worth considering. My only caveat is to think long and hard before adding Neo perks subscriptions to your Neo CardTM to ensure the monthly fees make sense for how you spend.