Neo Financial Review 2022: Products, Fees, Pros, and Cons

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by Enoch Omololu

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Advertiser Disclosure

Neo Financial is a financial technology company that is changing how Canadians save, invest, and earn rewards with credit cards.

It is one of the neobanks we have seen challenging the traditional banking system with higher-than-average savings interest rates, no-fee cash back credit cards, and hybrid bank accounts.

This Neo Financial review covers how it works, its products and services, benefits, fees, downsides, and alternatives like KOHO and EQ Bank.

What is Neo Financial?

Neo Financial is a fintech offering savings, credit cards, and other financial products in partnership with other well-known Canadian financial institutions.

It started operations in 2020 and has offices in Calgary and Winnipeg.

So, who owns Neo Financial?

Neo Financial was founded in 2019 by two SkipTheDishes founders – Andrew Chau and Jeff Adamson.

Since then, the company has attracted several investors including Peter Thiel, Tobi Lutke, Golden Ventures, Maple VC, ATB Financial, and several others.

Neo Financial Accounts

Neo Financial’s line of financial products includes:

  • Neo Credit
  • Neo Money
  • Neo Invest

It also has several products in the pipeline including mortgages.

Neo Financial Credit Cards

Neo Financial offers a Neo Mastercard (Neo Card) that’s available with three rewards tiers (Standard, Plus, and Ultra).

It also has a Neo Secured Credit Card and a partnership with Hudson’s Bay to power the Hudson’s Bay Mastercard.

Let’s break them down.

Neo Financial Mastercard

The Neo Mastercard is one of the best cash back rewards credit cards in Canada.

This no-fee credit card offers a 1% minimum cash back across all your purchases and an average 4% cash back at thousands of Neo partners (on up to $5,000 spend per month).

Combined with the Neo Financial app, you can easily track and budget your money, spend your rewards, freeze a lost card, and more.

Neo Mastercard (Standard)

Rewards: Average of 5% cash back at partners and a minimum of 1% cash back across all purchases

Welcome offer: Get 15% cash back on your first purchases; plus a $25 sign-up bonus.

Interest rates: 19.99% – 24.99% on purchases; 21.99% – 26.99% for cash advances.

Annual fee: $0

Our readers get a $25 bonus when they sign up and new cardholders also enjoy 15% cash back on their first purchase at several participating stores.

You can easily redeem your cash back as a statement credit.

Neo Secured Mastercard

The Neo Secured Card is one-of-a-kind.

Compared to a typical secured credit card that has monthly or annual fees and zero rewards, the Neo Secured Card offers the following benefits:

  • Up to 5% cash back when you spend
  • 15% welcome bonus cash back at Neo Partners
  • $25 cash bonus when you sign up
  • $50 minimum security deposit
  • Guaranteed approval regardless of your credit score
  • Neo hard credit check

You receive a physical card as well as a virtual credit card you can add to your favourite payment wallet (Apple Pay or Google Pay).

Neo Secured Mastercard

Rewards: Earn up to 5% real cash back on purchases.

Welcome offer: 15% cashback on your first purchases; $25 sign-up bonus.

Interest rates: 19.99% – 24.99% for purchases.

Annual fee: $0

Credit limit: Starts at $50.

Credit score required: Poor or bad credit score.

How To Apply For Neo Financial Credit Cards

You can apply for the Neo Cards online via these links (Neo Mastercard or Neo Secured Card).

You must be a resident of Canada and the age of the majority in your province (i.e 18 or 19 years older).

You will also need to provide a government-issued photo ID.

The Neo Cards are issued in partnership with ATB Financial under license from Mastercard. These cards are accepted at millions of locations worldwide.

Neo Money

Neo Savings was recently rebranded to Neo Money. It is a hybrid account that combines the features of a savings and chequing account.

Neo Money pays 1.45% interest on your balance and has no monthly account fees.

It includes:

  • Free bill payments and debit transactions
  • Unlimited free Interac e-Transfers
  • Accepts direct deposits

The Neo Money Account is offered in partnership with Concentra Bank.

You can easily access your Neo Card and Neo Money accounts on the Neo Financial mobile app.

Neo Invest

Neo Invest is the latest product offered by Neo Financial.

This robo-advisor service provides access to professionally managed investment portfolios in partnership with OneVest.

Robo-advisors invest your money on your behalf based on your risk tolerance and investment objectives.

You simply set up pre-authorized contributions and they divvy up your funds into various asset classes using Exchange-Traded Funds (ETFs).

You can invest inside a TFSA, RRSP, or non-registered personal investment account.

Neo Rewards Program

The highlight of the Neo Card is the ability to earn unlimited cash back at Neo partners, including a whopping 15% earn rate when you make your first purchases.

Neo Rewards has three tiers: Standard which has no monthly fees, and two premium tiers with higher cash back earn rates.

Here’s how they compare:

 Neo StandardNeo PlusNeo Ultra
Monthly fee$0$2.99$8.99
Average cash back at Neo partners4%5%6%
Minimum cash back across all spend1%1%1%

The minimum cash back means you get a top-up if your average cash back earnings fall below 1%.

The top-up is limited to a maximum spending of $5,000 per month at non-partners.

For Neo partners, cash back earnings are unlimited.

Neo Financial Partners

Neo has over 5,000 participating retailers, brands, and stores across Canada.

A few examples of Neo partners in cities like Calgary, Winnipeg, Edmonton, Toronto, and Vancouver include:

Five GuysSecond CupWell.ca
Boston PizzaMontana’sClearly
Earl’s Kitchen + BarHudson’s BayDufresne
SubwayFrank and OakPrincess Auto
Avis Car RentalNuburgerRobin’s
Poke GuysEPOCHGo Oil
The PintFahrenheit CoffeeMPG Sports
EQ3NAPA Auto PartsArticle Furniture

Neo Financial Fees

Neo Money has no monthly fees to worry about and the same goes for the Standard Neo Card.

If you opt for a higher reward tier (Plus or Ultra), you pay a $2.99 or $8.99 monthly fee respectively.

The Neo Card also has interest rates that apply on purchases when you don’t pay your balance within the grace period. Interest also applies to cash advances.

For Neo Invest, you pay a 0.75% managing fee per year. This is in addition to the management Expense Ratio (MER) of 0.40% to 0.50% that charged by the ETFs in your portfolio.

Is Neo Financial Legit?

Yes, Neo Financial is a legit financial institution operating in Canada.

It was founded by two co-founders of the food delivery service giant, SkipTheDishes, and is backed by reputable financial institutions and investors including ATB Financial and Concentra Bank.

Is Neo Financial Safe?

Yes, Neo Financial is safe.

Your deposits in the Neo Money account are held by Concentra Bank and are eligible for protection by the Canada Deposit Insurance Corporation (CDIC).

The CDIC guarantees your deposits up to $100,000 (combined with any eligible deposit you have at Concentra Bank).

On the investment side of things, OneVest Management Inc. is a registered Portfolio Manager in all Canadian provinces and territories, and your assets are held with CI Investment Services (CIIS).

CIIS is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF).

CIPF membership means your assets are protected against firm insolvency for up to $1 million.

Downsides of Neo Financial

 The cons of Neo Financial include:

  • The Neo Card does not offer insurance coverage benefits
  • The purchase APR on the Neo Card is as high as 24.99% if you have a poor credit score
  • The Neo Money account does not yet support mobile cheque deposits

Neo Financial Alternatives

KOHO

KOHO is a top alternative to Neo Financial for both cash back rewards and high interest rates on savings.

The free KOHO Card offers:

  • 0.50% cash back on all purchases
  • Up to 10% cash back at specific retailers
  • 1.20% savings rate on your balance when you set up a direct deposit
  • Unlimited free bill payments
  • Unlimited free Interac e-Transfers

KOHO members get physical and virtual cards and a mobile app that’s great for budgeting and automated savings.

KOHO Prepaid Mastercard (formerly KOHO Visa)

Rewards: Earn 0.50% cash back on all purchases; Up to 10% cashback at select partners; Earn 1.20% savings interest on your balance*.

Welcome offer: Get a $20 bonus when you load and make your first purchase (use promo code CASHBACK during sign-up).

Interest rates: 0%

Annual fee: $0

EQ Bank

The EQ Bank Savings Plus Account is one of the best high interest savings accounts in Canada.

This no-fee hybrid account includes unlimited debits and bill payments, Interac e-Transfers, and mobile cheque deposits.

It also pays a 1.50% interest rate on every dollar in your account.

In addition to its standard savings account, you can also open an EQ Bank TFSA, RSP, US Dollar Account, and GICs.

Neo Financial Canada FAQs

Is the Neo Card a real credit card?

Yes, the Neo Card is a Mastercard credit card that is acceptable worldwide.

Is Neo Financial a bank?

No, Neo Financial is not a bank. It is a financial technology company or neobank that provides banking services through partnerships with other financial institutions such as ATB Financial and Concentra Bank.

What credit score do I need for Neo Financial?

You need a minimum credit score of 600 to qualify for the Neo Mastercard. For the Neo Secured Card, you can qualify even if you have a poor or bad credit score rating.

Does Neo help build credit?

Yes, you can use Neo credit cards to build your credit score. To do this, you need to pay your balances on time and limit your credit utilization to 35% or less. Neo Financial reports your credit usage and history to TransUnion.

Is Neo a Mastercard?

Yes, both the Neo Card and Neo Secured Cards are issued under license by Mastercard.

Where is the Neo Card accepted?

The Neo credit cards are accepted whenever Mastercard is accepted which is at millions of locations worldwide.

Who are Neo partners?

Neo Financial has thousands of partners across Canada including popular brands like Earls Kitchen + Bar, Harry Rosen, Hudson’s Bay, Boston Pizza, Montana’s, and several others.

What is Neo Financial’s promo code?

When you open an account here, you receive a $25 bonus (no promo code required).

best Banking Offers this month

Get a free chequing account and a $350 cash bonus

Unlimited free debits and Interac e-Transfer transactions.

No monthly account or transaction fees.

$350 cash bonus when you deposit $100 for 3 months.

Earn a 2.20% high-interest rate on your savings.

No monthly or minimum balance is required.

Earn cash back on purchases & grow your savings ($20 bonus)

Free reloadable prepaid card and budgeting app.

Up to 2% cash back on all purchases and 10% at brand partners.

1.20% savings interest on your entire account balance.

Get 3-day early access to $100 of your paycheque for free.

$20 bonus after using the card for your first purchase (use CASHBACK referral code at signup).

Best no-fee cashback credit card with $100 bonus

Earn 2% unlimited cash back in three spending categories.

Get a $100 welcome bonus with $1,000 spending in first 2 months.

0.5% unlimited cash back on all other purchases.

1.95% low balance transfer rate and insurance coverage benefits.

Get one of the highest savings rates in Canada

1.50% interest on every dollar.

Up to 125x interest more than other banks.

Combines savings and chequing account features.

Get 3-day early access to $100 of your paycheque for free.

No monthly fees and free unlimited transactions and Interac e-Transfers.

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Author

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Enoch Omololu

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch has a passion for helping others win with their personal finances and has been writing about money matters for over a decade. He has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, Financial Post, Toronto Star, CTV News, Canadian Securities Exchange, Credit Canada, National Post, CIBC, and many other personal finance publications.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

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