Neo Financial vs. Tangerine Bank 2022: How Do They Compare?

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by Enoch Omololu

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Neo Financial and Tangerine Bank offer financial products and services to Canadians through their online platforms.

While Tangerine is a full-fledged online bank, Neo Financial is a financial technology company that is affiliated with banks like Concentra.

This Neo vs. Tangerine comparison covers their product offerings, fees, pros, cons, and everything else you need to make an informed choice.

Neo vs. Tangerine

Below, I discuss each financial institution and how their financial services and products differ.

This includes a comparison of their chequing, savings, credit cards, investments, and borrowing products.

This guide also looks at their fees, promotions, security, and more.

What is Neo Financial?

Neo Financial is a fintech founded in 2019 by two SkipTheDishes co-founders, Andrew Chau and Jeff Adamson, and Kris Read.

It provides a variety of savings, spending, and rewards products, and is currently looking to add mortgages and investments to the mix.

Learn more about the company in this Neo Financial review.

What is Tangerine Bank?

Tangerine Bank is the online banking arm of Scotiabank. It was formerly known as ING Direct when it was launched by The ING Group in 1997.

Tangerine Bank offers a vast array of financial products including chequing, savings accounts, credit cards, Guaranteed Investment Certificates (GICs), investment funds, mortgages, and more.

Learn more about the company in this Tangerine review.

Neo Financial vs. Tangerine: Chequing Account

Neo Financial does not have a traditional chequing account. Its Neo Money account functions as a hybrid account with saving and spending features. I discuss this account in more detail under “savings”.

The Tangerine Chequing Account has no monthly account fees and offers:

  • Unlimited debit transactions and Interac e-Transfers
  • Access to 3,500 Scotiabank ABMs across Canada
  • Mobile cheque deposits
  • Tiered interest on your balance (0.01% to 0.10%)
  • A debit card

Verdict: Tangerine Bank is a better choice if all you need is a no-fee chequing account.

Neo Financial vs. Tangerine: Savings Accounts

Both financial institutions have an account that pays you interest on your deposits.

Neo’s “savings” account is called Neo Money, while Tangerine’s savings accounts include registered and non-registered versions.

Neo Financial: Neo Money

Neo Money is a hybrid account for saving, spending, and earning interest on your money.

It pays a 1.45% interest rate on every dollar which is up to 145x what you will earn at some traditional banks.

While Neo Money is not a chequing account, it offers similar features including free and unlimited Interac e-Transfers, deposits, and bill payments.

It also has no monthly fees.

You can manage your account using the Neo Financial mobile app and also link your bank accounts to other financial institutions.

Tangerine Bank: Savings Accounts

Tangerine Bank has several savings accounts including general savings and:

  • Tax-free savings account
  • RSP savings account
  • RIF savings account
  • US Dollar savings account

The standard interest rate on its savings accounts is 0.10%, although, new clients often get a higher promotional rate for a few months.

Verdict: The Neo Money Account is better for higher savings interest rate. That said, if you need a TFSA or RSP savings account that pays a competitive rate, you can check out EQ Bank.

Neo Financial vs. Tangerine: Credit Cards

Both Neo Financial and Tangerine offer rewards credit cards.

Read on to see how they compare.

Neo Financial: Credit Cards

Neo Financial offers two credit cards:

The standard Neo Mastercard has no annual fees and pays a 5% average cash back rate when you spend at participating retailers (Neo partners) and a minimum 1% cash back across all spending (subject to a limit of $5,000 spending per month).

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

The Neo Secured Card is the best secured credit card in Canada with no annual or monthly maintenance fees and above-average rewards.

This card does not require a hard credit check to qualify and you can provide security funds as low as $50.

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.

Tangerine Bank: Credit Cards

Tangerine also offers two credit cards:

The Tangerine Money-Back Credit Card is an entry-level no-annual-fee card requiring a minimum of $12,000 in annual income and a 600+ credit score.

Cardholders earn 2% cash back in two categories of spending plus one additional 2% cash back category if you deposit your rewards in a Tangerine savings account.

All other purchases with the card earn at a 0.50% rate.

Tangerine Money-Back Credit Card

Rewards: Earn up to 2% unlimited cash back in up to 3 spending categories and 0.50% on all other purchases.

Welcome offer: Get an extra 10% cash back on up to $1,000 in spending in the first 2 months ($100 value).

Interest rates: 19.95% for purchases, balance transfers, and cash advances.

Annual fee: $0

The Tangerine World Mastercard also has no annual fees.

It offers the same cash back rates as its entry-level counterpart, plus

  • Rental car insurance
  • Mobile device insurance
  • Complimentary membership in Mastercard Airport Experiences Provided by Loungekey, etc.

Tangerine World Mastercard

Rewards: Earn up to 2% unlimited cash back in up to 3 spending categories and 0.50% on all other purchases; VIP perks.

Welcome offer: Get an extra 10% cash back on up to $1,000 in spending in the first 2 months ($100 value).

Interest rates: 19.95% for purchases, balance transfers, and cash advances.

Annual fee: $0

Verdict: The Neo Secured Card is a great option if you have bad credit and are trying to improve your credit score.

If you have an annual income of $60,000 or higher, you will get more benefits from the Tangerine World Mastercard.

Neo Financial vs. Tangerine: Investments

Neo Financial recently introduced Neo Invest, a robo-advisory service offered in partnership with OneVest.

You can invest as little as $1 and have a professionally-managed portfolio built using Exchange-Traded Funds (ETFs).

Your investment assets are held with CI Investment Services.

Tangerine Bank offers a variety of ways to invest including mutual funds, ETF portfolios, and GICs. You can hold these assets inside non-registered and registered investment accounts.

Verdict: You get more options with Tangerine Bank.

Neo Financial vs. Tangerine: Borrowing

Neo Financial does not offer lending products such as personal loans, lines of credit, or home equity loans (HELOC).

Tangerine Bank clients can access the following:

As per Neo Financial’s website, it has plans to offer mortgages in the near future.

Verdicts: Tangerine is better for borrowing.

Other Factors To Consider

Convenience

Neo Financial and Tangerine are online financial institutions. There is no branch location you can walk into.

For customer service, you can reach an agent via phone or email.

Tangerine clients can use Scotiabank ABMs for free, so this can be more convenient if you routinely conduct transactions at an ABM.

Verdict: Tangerine = Neo Financial.

Fees

Some service fees apply with both Neo and Tangerine For Tangerine:

  • Canadian drafts: $10
  • Inactivity fee (after 1 year): $10
  • Overdraft protection: $5
  • NSF fee: $45
  • Paper statement: $2
  • ABM withdrawal in Canada (non-Scotiabank): $1.50
  • ATM withdrawal abroad (not part of Global ATM Alliance): $3

For Neo Financial:

If you subscribe to Neo Financial’s Plus or Ultra rewards tiers, you pay $2.99 or $8.99 per month respectively.

  • Foreign currency conversion fee: 2.50%
  • Supplementary paper statement: $2.50
  • Secondary authorized user: $10
  • Rush replacement card: $29

Promotions

When you apply for a Neo Card here (Neo Secured Credit Card or Neo Mastercard), you receive a $25 cash bonus after your application is approved.

For the Tangerine credit cards, you get a bonus of 10% cash back on up to $1,000 spent in the first 2 months ($100 value).

Security

Both Neo Financial and Tangerine are legitimate financial institutions.

Your deposits at Neo and Tangerine are eligible for CDIC deposit protection for up to $100,000 per category per depositor.

You should note that your deposits in the Neo Money account and Concentra Bank are combined when considering the CDIC deposit insurance.

Pros and Cons of Neo Financial

Pros:

  • High interest rates on savings
  • Competitive cash back rewards for credit cards
  • Innovative secured credit card
  • Multiple financial products

Cons:

  • Neo Money is not available in Quebec
  • No in-person branch support

Pros and Cons of Tangerine

Pros:

  • No-fee chequing account
  • Free access to thousands of ABMs
  • Competitive cash back rewards on credit cards
  • Multiple financial products

Cons:

  • No in-person branch support
  • Low standard interest rate on savings

Neo vs. Tangerine: Summary

Tangerine and Neo Financial are good choices if you are looking to save on banking fees, earn more on your savings, and get a no-annual-fee credit card.

Neo Money pays a higher interest rate and is better for savings. You could also opt for the EQ Bank Savings Plus Account and earn higher rates on general, RSP, and TFSA savings.

For a free and versatile online chequing account, the Tangerine Chequing account is one of the best.

The Tangerine credit cards are also top-rated in the cash back division.

Related:

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Earn 2% unlimited cash back in three spending categories.

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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.

1 thought on “Neo Financial vs. Tangerine Bank 2022: How Do They Compare?”

  1. Hi Enoch,
    Hope all is well with you and your family?
    I love reading your emails and product reviews.
    The most recent one talks about Tangerine World Mastercard which I have.
    Is Airport lounge access free with this card and if so how to gain access to an airport lounge?
    Thanks,
    Manish

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