Neo Financial Review: The Best Online Bank In Canada

August 12, 2021
Banks

To determine the best online banks in the Canada, we scored and reviewed 8 highly popular banks. In this case, we’ll be focusing on Neo Financial

Neo’s the best bank we reviewed, period. It all starts thanks to its credit card, which is paired up with an interest rate of 1.55% and extensive cashback rewards. All of this bodes well for Neo to be crowned as the best online bank to be used as both a main spending and savings account.

This online bank was released in December of 2020 and features a credit card as its main spending medium. It pairs its card with a hybrid savings/chequing account that offers extensive cashback rewards and interest earned on the account balance.

It’s the biggest, broadest and most complete online bank in Canada.

 Neo
Domestic Fees7
International Fees6
Everyday Usage8
Interface and Usability6
Mobile App Functionality10
International Usability5
Customer Support10
Security & Regulation10
Savings/Premium Benefits10
Extra Features5
Total77

Now that you’ve seen the bank’s overall scores, here’s a more detailed look at how it performs in each category.

 Neo
Total Score77
1 Domestic Fees
ATM feesX
Monthly feesNo monthly fees for accounts, but, monthly fees for cashback memberships:
Essential Plan: $0
Plus Plan: $4.99
Max Plan: $9.99
Card FeeFree
Additional Cards Fee$29
Card Delivery FeeFree
Kids AccountX
Minimum balance required$0
Inactivity FeeFree
Free Interac e-Transfers?✔️
2 International Fees
Foreign ATM feesX
Foreign spending fee2.5% fee at Mastercard exchange rate
Foreign exchange fees2.5% at Mastercard exchange rate
Cross Border Transfer FeeX
3 Everyday Usage
Apple Pay✔️
Google Pay✔️
Does it accept cash deposits?X
Spending/Transaction CategoriesX
Real Time Notifications?✔️
Built-In DonationsX
4 Interface and Usablity
Spending limits in the appX
Withdrawal limits in the appX
Sub-savings accountsX
Bill splitting / Shared ExpensesX
Subscription trackingX
5 Mobile App Functionality
Toggling payments in the app✔️
Toggle Foreign Payments✔️
Signup Speed<10 minutes
Mobile App Ease of UseSomewhat intuitive
Apple Appstore Score /54.2⭐
Google Playstore Score /53.7⭐
6 International Usability
Hold Multiple CurrenciesX
International Money TransfersX
Can The Card Be Used Abroad?✔️
Is The ATM Network International?No ATM network
7 Customer Support
In-app support chat✔️
Telephone support1 (855) 636-2265
Priority Customer SupportX
Email supportsupport@neofinancial.com
Email Response Time4 Hours
8 Security & Regulation
RegulatorPartnered with Concentra Bank, a CDIC member
Freeze/Unfreeze Card In The App✔️
PIN resets in the app✔️
Biometric login and authentication?✔️
Does it do a credit check?Soft
9 Savings/Premium Benefits
Metal CardX
CashbackEssential Plan: 4% Cashback average at Partners
Plus Plan: 5% average cashback at partners, 0.5% cashback at non-partners
Max Plan: 6% average cashback at partners, 1% average cashback at non-partners.
Partner Discounts?Depending on your state, you can get up to 15% discounts at some local businesses
Gain interest rate?1.55%, calculated daily, paid monthly
10 Extra Features
Get Paid early?✔️, through Direct deposits
Network ATM FinderX
Overdraft Availability✔️
Overdraft ProtectionX (19.99% - 24.99% interest generated on debt)
Stock TradingX
Commodities TradingX
Cryptocurrency Trading?X
Referral program?Referral and Referrers will earn $5 each

Now let’s jump into the full written review explaining what you just read in our previous tables.

Neo Financial Review

#1 Domestic Fees

Neo starts rather strongly in this category, mainly due to the fact that its regular accounts don’t charge any monthly fees, a certain minimum balance nor do they incur any inactivity fees at all. Neo’s first card is also free, including the delivery of it and all other replacements.

On top of all those benefits, Neo also supports free receiving and sending of Interac e-Transfers from and to all other Canadian banks, which is always great.

However, Neo has a pretty big flaw in this category, in the sense that since it offers a credit card, it doesn’t offer ATM withdrawals. So, the only way to get cash out of a Neo account is to transfer it to another bank account and withdraw from an ATM or ask for a cash advance in the way of cash back when making a purchase.

However, it’s worth noting that cash advances immediately start costing interest around 23-27% of the total amount withdrawn.

Another big detail to have in mind is that Neo’s replacements for its credit cards don’t go for free, each costing $29, whereas other banks offer them for free.

Neo Domestic Fees Score: 7/10

#2 International Fees

Using Neo for foreign spending and foreign exchange incurs a 2.5% fee. This might seem high – but keep in mind that this is more of an industry problem rather than a Neo flaw. Other big banks like Motusbank and Tangerine charge up to 3.0% in fees.

The Neo card can’t perform foreign ATM withdrawals, like most online banks. It makes it up by being accepted internationally anywhere that takes Mastercard and allowing for holders to continue earning cashback on any purchase, instantly, even when abroad. If you’re looking for a card exclusively for foreign spending you might want to look elsewhere, but right now Neo is the most complete option.

Neo International Fees Score: 6/10

#3 Everyday Usage

Neo’s credit card can be paired with Apple Pay and Google Pay, which means more ease of use. Plus, it also features real-time spending notifications to keep budgets in control more easily. This means that users are able to completely see where their money is going and receive notifications in real-time.

Neo Everyday Usage Score: 8/10

#4 Interface And Usability

Currently, Neo doesn’t let users set their own spending/withdrawal limits, or track online subscriptions. However, it tracks your cashback earnings and your purchases in real-time and has the option to notify you after every transaction. You can also freeze your card if you see anything suspicious, all in a matter of seconds.

The Neo team is working on adding additional withdrawal limits and tracking tools, but for now, we can’t give it more than a 6/10 for its solid cashback and purchase tracker.

Neo Interface And Usability Score: 6/10

#5 Mobile App Functionality

Neo gets somewhat up to speed here with a solid score thanks to features like being able to toggle on/off both recurring local and foreign payments right from the app, which only Tangerine offers aside from Neo.

On top of that, Neo’s mobile app ranks as the 4th highest-ranking mobile app out of the Canadian online banks we reviewed. This is due to the fact that its signup process takes less than 10 minutes to complete and is even more evidenced by its score on both major app stores, garnering a total score of 4.2/5 in the Apple App Store and 3.7/5 stars in the Google Playstore.

Solid performance, but still missing the mark on the scores in popular play stores.

Neo Mobile App Functionality Score: 10/10

#6 International Usability

As we had described earlier, we do not recommend using Neo for foreign spending due to its high fees. The thing is, in terms of overall usability, it also performs poorly.

Since Neo offers its users a credit card that cannot perform local ATM withdrawals in Canada, it also cannot perform foreign ATM withdrawals. This means that for any Neo user that’s abroad, getting cash is almost near to impossible unless they find a store that lets them get local currency as cashback after a purchase.

Still, Neo’s card can be used without any problems abroad, which does let it accumulate some points in this category.

Neo International Usability Score: 5/10

#7 Customer Support

Neo is one of the few that gets a perfect score in terms of customer support simply thanks to the fact that they offer all support channels and they’re very responsive.

Neo’s support chat is always available and ready to answer. When we contacted them, their responses were quick, informed and thoughtful. Phone lines took a bit longer to pick up but they were rather quick as well.

Email support surprised us a bit because it’s usually the one that takes the longest to hear back from, but just after 4 hours, we got our questions answered thoroughly.

If you need to get in contact with Neo to ask them some of your own queries, you can do so through the following channels:

Definitely one of the banks with the quickest and most helpful support we reviewed.

Neo Customer Support Score: 10/10

#8 Security & Regulation

The first thing that’s worth mentioning in this category is that in terms of security and regulation, Neo is the best-performing online bank. Neo is partnered with Concentra Bank, an institution that’s regulated by the CDIC, which means that all of Neo’s eligible deposits are insured in the same way for up to $100,000.

Aside from that, Neo also offers the distinct features of letting users freeze/unfreeze their cards at any moment they wish and resetting their PINs from the app. Users can also set up biometric authentication for signing in, which makes using Neo both quicker and safer.

Onto another topic in the same vein, it’s also important to note the impact of these online banks on a users’ credit score. Luckily, Neo only performs a soft credit check, which means that it doesn’t affect any user’s credit score by just opening an account in it.

Neo Security & Regulation Score: 10/10

#9 Savings/Premium Benefits

Here’s where we can get to speak about some of Neo’s most important and unique features. The most noteworthy feature to mention here is that Neo, along with KOHO, gets a perfect score in this category. This is thanks to Neo offering all 3 rewards users are always looking for, cashback, partner discounts and interest rates.

Neo’s cashback comes from its monthly memberships. All users are part of the Essential Plan, which doesn’t cost anything monthly and offers an average of 4% cashback at partner retailers.

Following that is the Plus plan, which costs $4.99/month and offers an average 5% cashback at partner retailers and 0.5% cashback at non partner retailers.

Finally, we have the Max plan, which goes for $9.99/month and an average of 6% cashback at partner retailers and 1% cashback at non-partners.

In terms of partner discounts, this is a bit more dependent on where a Neo’s user lives. Neo is making partnerships up in a state-by-state scenario, which means that some states might have some offers that others might not. Discounts can go up as high as 15% on average on most offers through the Neo app.

In terms of interest, Neo automatically offers all of its users a base 1.55% interest rate, calculated daily and paid monthly. This particular percentage makes Neo offer, according to our scoring metrics, the highest non-promotional interest rate out of all Canadian online banks we reviewed.

Neo’s interest rate is only followed by EQ Bank’s Savings Plus account at 1.5%. However, it’s also worth noting that EQ also offers TFSAs with 2.3%, with Tangerine quickly following behind with a 2.1% on both savings and chequing for the first 5 months of use.

Neo Savings/Premium Benefits Score: 10/10

#10 Extra Features

Here’s where Neo’s score dips back down since it offers what basically should come with a chequing account nowadays and nothing more. It comes with Direct Deposits, the chance to overdraft (of course, it’s a credit card!) and it comes with a barebones referral program.

The thing about Neo’s overdraft is that it doesn’t come with overdraft protection, which means that the moment a user overdrafts his/her account that debt is going to start to rack up at an interest around 20% to 25%.

Neo’s referral program is also nothing to write home about, giving $5 each to the referral and the referrer. It is unlimited, though, so if a user wants to refer 1,000 friends, well, that’s $5,000 accredited to that user.

However, aside from that, there’s not much else about Neo. It’s missing features like being able to trade or invest right from the account, but only a few banks offer that feature. And in terms of an in-app network ATM finder, it doesn’t need one because it doesn’t have an ATM network.

Neo Extra Features Score: 5/10

Why Neo Financial?

Neo’s one of the best banks we reviewed, period. It all starts thanks to its credit card, which is paired up with an interest rate of 1.55% and extensive cashback rewards. Neo scores a whopping 77/100 and is currently without a doubt the best online bank in Canada.

All of this bodes well for Neo to be crowned as the best online bank to be used as both a main spending and savings account. It’s the biggest, broadest and most complete online bank in Canada.

It still has some room to grow in certain areas, but it’s certainly the most solid option for those looking to make their first-time jump from brick & mortar to online banking and have all the benefits at the tip of your hands. For those reasons and Neo Financial’s overall performance, we consider it the best Canadian online bank.

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