Neo Financial Review

neo financial card

You’ve probably seen a lot of digital banks using prepaid cards instead of credit cards these days. That’s where Neo Financial differs from other digital banks: you can use a Neo credit card to transfer funds or spend money.

Neo Financial also offers a cash-back rewards program that comes in three levels, all of which start at $0 in fees per month. You can use a Neo credit card for a small monthly fee to make purchases and increase your cash-back rewards with Neo Cash Back Rewards.

In this review, we’ll take a closer look at Neo Financial’s cash-back rewards program and other perks that differentiate it from other digital banks in Canada.

Pros and Cons

Pros

  • You can earn 4% cash-back on average every year
  • Savings accounts (called Neo Savings) earn high interest
  • The Neo Financial App lets you pay bills, check savings, and freeze your card
  • Compatible with your Google Pay or Apple Pay digital wallet
  • Fast approval process (3 minutes)

Cons

  • Your current location might not allow you to earn cash-back while shopping
  • No high-quality travel insurance package
  • Not available to customers in Quebec

Fees

Neo Financial prides itself on not charging crazy annual or inactive fees to its customers. That said, you do have to pay a small monthly fee if you want to use their Plus or Ultra Cashback plans. Their most expensive cash-back plan, the Ultra, only costs $8.99 a month. 

About Neo Financial

Neo Financial bank is a financial technology company that Andrew Chau, Jeff Adamson, and Kris Read founded in early 2020, with offices in Calgary and Winnipeg. They currently partner with Concentra Bank, MasterCard, and ATB Financial to offer a cash-back credit card and a high-interest savings account.

The goal of Neo Financial was to be a challenger bank against Canada’s “big five” banks, creating a banking experience that rewards customers. The founders also wanted to take a tech-first approach to banking, which they felt was slow to happen in the big five-dominated Canadian banking industry.

The company plans to expand into partnerships with larger businesses but still wants to prioritize small and medium-sized businesses. One of Neo Financial’s larger goals is to become on scale with Shopify or PayPal in Canada: a trusted, nationwide company that people can safely add to their digital wallets.

Why is Neo Financial So Special?

As I mentioned, Neo Financial tries to find every avenue to earn you cash-back. They market themselves as the “credit card that rewards your lifestyle,” since you can earn cash-back simply by making purchases at retail locations. For someone who likes to shop and wants more than the usual retail store offers, that sounds like a dream.  

Plus, they don’t just use prepaid credit cards like other online banks. Instead, you can use an actual credit card with a limit and an option of making a minimum monthly payment or the total balance. No need to keep refilling the card: it works just like all the rest. 

Neo Financial also maximizes your shopping experience through its mobile app. Available for iOS and Android devices, the app shows you all nearby locations to earn cash back. Neo Financial has partnered up with dozens of these, like local gas and grocery shops and retailers.

The reason for these partnerships is pretty awesome. The founders of Neo Financial wanted to not only revolutionize mobile banking but also find ways to support local and national businesses. So, when you purchase items at these businesses, you can earn cash back and keep these businesses running. 

In particular, Neo Financial’s partnership with Concentra Bank allows the company to ensure customers have the best personalization options for cash-back. In a way, it works like a classic “Buy 2 Get 1 free” sale. Making purchases with your Neo card at partnered businesses feeds your rewards because you continually buy what you like and get cash back as a result.

Neo Accounts

  1. Concentra Bank Savings Account
  • 1.5% interest rate
  • Available to everyone, regardless of income or credit
  • No promotional period
  • No minimum balance requirement

Besides a savings account, you can choose from three different cash-back options. You can participate in any of these plans on a month-to-month basis, with no annual fees.

  1. Standard
  • $0 a month
  • Average 4% cash-back at partnered locations
  • Minimum 1% across all spending
  • Recommended if you spend less than $750 a month

  1. Plus
  • $2.99 a month
  • Average 4% cash-back at partnered locations
  • Minimum 1% across all spending
  • Recommended if you spend $750 or more a month

  1. Ultra
  • $8.99 a month
  • Average 6% cash-back at partnered locations
  • Minimum 1% across all spending
  • Recommended if you spend $1000 or more a month

With each of these systems, you can see your accumulated rewards immediately after you make purchases. If you compare these programs to regular rewards cards, which only offer an average of 2% cash-back or fewer, you could get more bang for your buck using Neo Financial’s card. 

How Do You Use a Neo Credit Card?

What’s nice about the Neo credit card is that anywhere that accepts MasterCard will accept it too. Plus, you earn cash-back instantly without needing to redeem it elsewhere or take extra steps to get it. 

If you don’t want to carry your Neo credit card around, you can always add it to your Google Pay or Apple Pay digital wallet. You can still earn your cash-back even without it: a perk that not many other Canadian credit cards offer.

Something I like is that when you earn the cash-back, you can either keep it as credit for your next purchase or cash it out whenever you want. 

Using the Neo Financial app lets, you see your balance or claim your cash-back without too much hassle. So if you ever find yourself in a new shopping area, it’ll tell you which businesses have partnered with Neo Financial so you can keep maxing out your cash-back rewards.

You also don’t need to jump through hoops if you ever need to upgrade or downgrade cards. Just go into the app or your online portal, click a few links, and it’s all taken care of. Second, to the many cash-back bonuses you can find at several businesses, not getting pulled into long-term or tricky contracts is the biggest plus of the Neo credit card. 

How is Neo Financial Regulated?

One of Neo Financial’s banking partners, Concentra Bank, allows Neo to offer a high-interest, CDIC-eligible savings account. Concentra also holds customers’ accounts, which is okay because they are a member of the Canada Deposit Insurance Corporation (CDIC). 

Is My Money Safe with Neo Financial?

Several legitimate financial institutions back Neo Financial, so I would say it’s safe to deposit money into an account with them. 

ATB Financial, one of their partners, has assets of over $55.1 billion, $32 billion in investments, and over 700,000 customers. Concentra Bank, another partner, is a member of the CDIC, so your deposits are eligible for up to $100,000 of insurance. 

Plus, the mobile app uses the same levels of encryption and security that most online or mobile banks use. If you’ve ever used another bank’s online or mobile banking, you should get the same level of comfort and security here.

How Do You Apply for a Neo Credit Card?

When you apply for a Neo credit card, they promise that you’ll only need to wait 3 minutes for approval. Sounds too good to be true, doesn’t it? Luckily, that claim is indeed valid. Plus, all it takes to apply is to download the Neo Financial app, make sure you have your government-issued ID, and follow the directions.

You also have to make sure that you’re of the age of majority in your province to be eligible. 

The process seems as simple as Neo Financial promises, so I hope that other banks follow the example.

How to Open a Neo Financial Savings Account

Opening a Neo Financial savings account works the same way as opening a Neo credit card. You’ll need to download the mobile app, choose the Neo Savings account option, and send a picture of your government-issued ID through the app.

Customer Service

Neo Financial gives their customers all the information needed to reach them, including an email address, phone number, and even mailing address. They say they’ll get back to the customer’s complaint within five days of receiving it.

In fact, they have an entire customer complaint policy page detailing how to go about addressing your concern and what steps Neo Financial will take to resolve the issue.

From my research about how good their customer service is, their team seems pretty timely, thorough, and friendly throughout the process. Plus, any company that is that transparent about how to reach them and how they troubleshoot deserves praise. 

Competitors

EQ Bank

eq bank

For years, EQ Bank‘s non-promotional savings rates have ranked among the best in Canadian banks. It’s also one of the most popular online banks in the country.

Their digital banking works much the same way as Neo Financial, including a $0 annual fee. The only difference is that they have mobile cheque deposits, joint accounts, registered accounts, and investments. 

Right now, the rate on their Savings Plus, TFSA, and RRSP accounts is 1.25%

Motive Financial

Motive Financial’s savings interest competes with Neo Financial at 1.25%, and they have been around longer than the competition. They do, however, charge fees for e-transfers. 

Tangerine

tangerine bank

Tangerine offers a promotional 2.10% rate for your first five months with an account, and after that, it’s only 0.10%. Similar to Neo Financial, they don’t have annual fees and offer a cash-back program where you earn $100-1000 in the first two months from making purchases.

Saven Financial

saven financial

Saven Financial, like Neo Financial, is another new online bank introduced in January 2021. Their high-interest savings account carries a 1.55% interest rate, plus their deposit insurance goes as high as $250,000.

On the other hand, they do not offer credit cards or loans, and they require a $25 membership to open an account. 

The bottom line 

Neo Financial is finding new ways to revolutionize online banking. Although they have some challenger banks in their field, they have unrivalled cash-back programs, as well as a comprehensive mobile app designed to maximize your cash-back rewards. 

If you want to simplify your banking processes and want to get a few rewards along the way, Neo Financial is not a bad place to begin. The application process is fast and straightforward, so you should be on your way to easy, safe banking in no time.