Tangerine vs Neo

April 26, 2021

Neo isn't as known as other online banks, but this doesn't mean it's slacking. This online bank 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 cash back rewards and interest earned on account balance.

Tangerine is a well-established online bank that has been leading the charge since a couple of years ago when it was released by Scotiabank. Tangerine is probably the one that strayed less from how a traditional brick & mortar bank works.

However, for as good as that bank is, we truly believe that it isn’t the best, a spot that’s reserved for Neo Financial. It’s got great domestic feesthe best everyday usage, possibly the best customer support, the most banking products and the most extra features.

Out of all the online banks we reviewed, without a doubt, Neo Financial offers the best-rounded experience an online bank in Canada can give. From savings to investing to tracking your expenses, it’s all here and it’s why Neo Financial is our top pick for the best Canadian online bank.

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Now that you've seen their overall scores, here's a more detailed look at how each bank scores on those ten categories.

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Tangerine Review: Breakdown

#1 Domestic Fees

Tangerine behaves like most online banks or even more traditional banks, with some new features here and there. The first and most important ones to mention are that Tangerine doesn’t charge monthly maintenance fees nor requires a minimum balance to keep the account open.

This online bank also waives ATM fees as long as users are withdrawing from Tangerine/Scotiabank’s 3,500 ABMs in Canada. If users find themselves using any other ATM, they will incur a $1.5 fee.

In terms of cards, users will first get a debit card with their account, which doesn’t have any initial delivery/order fees attached to it. However, each replacement of this debit card will run users a total of $15, which is rather expensive, even if Tangerine offers 1 free replacement per year.

Where Tangerine edges closer to traditional banks is in terms of inactivity fees, which follow the following cost model:

  • $10 after 1 year of inactivity
  • $20 yearly from the 2nd to 9th years of inactivity
  • $40 after 10 years of inactivity

Tangerine performs rather well, as we had mentioned, but the fact that it charges some of those fees does hinder its score a bit. It does get some extra points for being able to both send and receive Interac e-Transfers for free.

It’s worth noting as well that Tangerine is currently the only Canadian online bank that offers accounts for kids.

Tangerine Domestic Fees Score: 7/10

#2 International Fees

Here’s where sticking to the way traditional banks work hurts Tangerine’s score more. This is due to Tangerine charging a base percentage fee for all foreign transactions and a hefty one at that. The online bank charges a 2.5% fee on foreign ATM, spending and exchange transactions, but ATM withdrawals will also incur a $3 fee if they’re not made on a Visa Plus or Global ATM Alliance network.

Tangerine also isn’t able to send money internationally, which is quite an important feature, but most online banks except EQ Bank and Simplii Financial can’t send money internationally either.

Tangerine International Fees Score: 2/10

#3 Everyday Usage

This is perhaps one of the categories where Tangerine excels the most as an online bank. Being able to pair Tangerine’s card with either Apple Pay or Google Pay are nice enough features. On top of that, the online bank also sends real-time spending notifications and automatically categorizes transactions into certain spending categories so users have a clear depiction of how and what their money is being used on.

Since Tangerine is part of Scotiabank, it can also use its ATMs to deposit cash, a feature not many online banks can boast about.

Tangerine is also the only bank we’ve found to open donation channels right from the app during times of emergency, which is certainly something great to have.

Tangerine Everyday Usage Score: 10/10

#4 Interface And Usability

In this category, Tangerine runs into some rocky soil. We’ve found that Tangerine is rather strict when it comes to letting users customize their own spending since it doesn’t let users set their own spending/withdrawal limits from the app.

It also doesn’t have a feature to easily split bills/share expenses with friends, or track online subscriptions. However, Tangerine does let users open sub-savings accounts, called goals, in order to facilitate saving for a particular goal either of either short or medium length, which is neat.

Tangerine Interface And Usability Score: 4/10

#5 Mobile App Functionality

Tangerine has one of the better-developed apps, which shows through the functionality it offers. This online bank is one of the few that lets users toggle both local and foreign recurring payments.

On top of that, new Tangerine users can sign up in less than 10 minutes, which is super quick when compared to traditional account opening times. Although, when it comes to the meat of Tangerine’s app, people still seem to want more out of what it already offers, which is denoted by the app’s score on popular app stores. Tangerine manages a score of 4.3/5 in the Apple App Store and 3.6/5 starts in the Google Play Store, which means that it still has some issues that need fixing.

Overall, Tangerine’s mobile app scores as the 4th highest-rated online bank app, just behind STACK, EQ Bank and KOHO.

Tangerine Mobile App Functionality Score: 8/10

#6 International Usability

Tangerine manages to find its ground yet again here due to some exclusive features to it. First of all, Tangerine is the only online bank we reviewed that offers to open an account in another currency besides, specifically USD.

On top of that, Tangerine’s card can be used anywhere where VISA is accepted while at the same time having access to VISA’s ATMs abroad.

All of this makes it a very solid contender for foreign spending if it weren’t for those hefty foreign transaction fees…

Tangerine International Usability Score: 7/10

#7 Customer Support

This is the category where we found that Tangerine beats all other banks. Not only offers all three main support channels, in-app chat, phone lines and email, but its support agents are the most responsive we dealt with.

Phone lines don’t take longer than 5 minutes to be answered and surprisingly, Tangerine responded to our emails only after 1 hour, which is the fastest time we recorded.

If good customer support is something you’re looking for in a bank, then Tangerine is probably the best in-store.

If you want to experience good support personally, you can reach Tangerine through the following channels:

  • Phone: 1-888-826-4374 (Within Canada)/ 416-758-3139 (Outside of Canada)
  • Email: [email protected]
  • Support chat: In-app/Website.

Tangerine Customer Support Score: 10/10

#8 Security & Regulation

Due to being part of Scotiabank, Tangerine counts with the same regulation and insurance provided by CDIC. This means that Tangerine is directly regulated by the CDIC, and all eligible deposits in it are insured for up to $100,000.

Regarding security features, Tangerine lets users reset their card PINs right from the app, and the signing-in process can be configured with biometric authentication. However, users can’t freeze/unfreeze their cards through the app if it gets lost, which can be a hassle to do with other methods.

In terms of credit score, Tangerine does perform a soft credit check for both savings and chequing accounts. But, it will perform a hard credit check if the user applies for any overdraft/credit features.

Tangerine Security & Regulation Score: 9/10

#9 Savings/Premium Benefits

Here’s where we got into some polemic features of Tangerine, specifically interest. The first thing to note here is that yes, Tangerine users earn interest on their account balances.

However, Tangerine’s approach to interest is somewhat akin to restaurants luring customers with big neon signs while serving them what could be considered… not the best food. It works like this:

New users will earn 2.1% interest calculated daily and paid monthly both on savings and chequing accounts. Great, right? However, this superb interest rate is only promotional and will only apply for the first 5 months. After that, the interest rate will decrease down to 0.10% for chequing accounts and 0.15% for savings accounts, the lowest out of all Canadian online banks we reviewed.

Tangerine does earn some extra points here because it offers cash back, but only if you apply and are approved for the Money-Back Mastercard credit card.

Tangerine Savings/Premium Benefits Score: 5/10

#10 Extra Features

Here’s another category where, again, Tangerine outclasses all other online banks we reviewed. Here’s a full list of the extra features that make Tangerine outshine most other online banks:

  • Getting paid early through Direct Deposits
  • In-app network ATM finder
  • Being able to overdraft the chequing account (Once users have applied and have been approved)
  • Overdraft protection that can waive fees (if paid on the same day the account was overdraft)
  • Being able to trade ETFs
  • Having the second highest-earning referral program out of the banks we’ve reviewed.

All of those are nice features to have that most other banks don’t, especially trading and over-drafting an account. However, the really important one to mention is Tangerine’s referral program which works in the following way:

  1. Both the referrer and the referral will earn $50 each
  2. Referrals will need to fund their account with at least $250 within 60 days of opening an account
  3. Users can only refer 3 friends per calendar year (Maximum earnings of $150 per year).

This makes Tangerine’s referral program the second-highest earning program out of all the banks we reviewed, just behind Simplii Financial’s program.

Tangerine Extra Features: 10/10

Now let’s talk about our next bank in question:

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 or 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 supports free outgoing and incoming 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 remember 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. Big banks like Motusbank and Tangerine charge up to 3.0% 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 holders to continue earning cash back 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 bet-rounded 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 cash back 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 cash back 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 Play Store.

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 described earlier, we don't recommend using Neo for foreign spending due to its high fees. But, apart from that, 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 abroad, getting cash is next to impossible unless they find a store that lets them get local currency as cash back 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, making using Neo quicker and safer.

Onto another topic in the same vein, it’s also important to note the impact of these online banks on a user’s credit score. Luckily, Neo only performs a soft credit check, meaning opening an account doesn't affect your credit score.

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, cash back, partner discounts and interest rates.

Neo’s cash back 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% cash back at partner retailers.

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

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

In terms of partner discounts, this is a bit more dependent on where a Neo user lives. Neo is making partnerships 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 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 of 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

Tangerine Or Neo?

When recommending a certain product, here at Yore Oyster we always strive to really give you the best advice. This is why we always give a final recommendation comparing the products we talked about. So, here's our final take on both banks:

Neo's biggest flaw comes from its most attractive point, its credit card. This card cannot be used at any ATMs, either locally or internationally. It can also be overdrawn, but there's no overdraft protection, which means that users will instantly start generating interest on their negative balance.

Overall, Neo is the most solid online banking option for Canadians as of today. It manages to merge most of the benefits of traditional banking with the conveniences of online banking while keeping great fees, a lot of versatility and solid service both in and outside Canada.

It's definitely the biggest, broadest and more complete online bank in all of Canada.

If you're deciding between Neo and Tangerine, we definitely recommend Tangerine. Credit cards are optional and so are overdrafts, plus there are a lot more options when it comes to rewards, investing and more.

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