Neo Financial Review: 2024 Edition

Neo Financial is a Canadian company that provides online financial services. It offers a variety of products, including a high-interest savings account, cashback credit cards, mortgages and more.

In this review, we will look at the company’s products and shed light on some of its benefits and drawbacks.

Neo Financial Overview

This card is one of the best cashback cards available in Canada today. With your Neo account, the zero-fee card comes with an average of 5% cash back for purchases at Neo partners.

You’ll get a welcome offer of up to 15% cash back on your first-time purchases, alongside a $25 welcome bonus.. The interest rates go from 19.99% to 29.99% on purchases. As for cash advances, the interest rates go from 22.99% to 31.99%.

It is advised that you use the Neo Financial app with it, because you’ll be able to keep track of your rewards and spending habits, and will be able to immediately freeze your card in case it gets stolen or you lose it and unfreeze it in case you find it after all.

The application process is straightforward. It is done online, and there are not many requirements to get the Neo Credit card. You need to live in Canada, have a Canadian photo ID, and be the age of majority in your province.

Depending on your habits, you can go with this card, or look into alternative options, either with cashback or travel rewards, to see if they’re a good fit.

Neo Secured Credit represents a new approach to secured credit cards, as it not only helps users safely build credit, but also offers cashback rewards from thousands of partners - all without monthly or annual fees. The card stands out for its extremely low security deposit requirement of $50, which is many times lower than the industry average and much more favorable to those looking to build their credit score.

To add to this, Neo Secured Credit card doesn't require a hard credit check, and offers guaranteed instant approval even for low-credit customers. You can use your Neo Secured Credit card anywhere Mastercard® is accepted, just like you'd use any traditional credit card.

Previously known as the Neo Savings account, Neo Everyday Account + card is an excellent option for investing in your future. There’s no initial deposit, and you’ll benefit from a high-interest rate of 1%. There are no monthly fees, and your deposits will have CDIC protection.

With it, you’ll be getting unlimited free Interac® e-Transfers, free payments of bills, and it also accepts direct deposits.

Neo Everyday Account is based on a partnership with Peoples Bank of Canada and is easily accessible via the mobile app.

Neo Mortgage is another industry-shaking product offered by Neo Financial, providing secure mortgage loans with rates better than traditional banks right from your phone. You can get approved for a mortgage with as little as 5% in down payment, with a rate-lock period of 120 days and 20% in annual lump sum payments.

Neo scans the entire market to find the best mortgage rates available to you, making it extremely easy and fast to get approved for a loan, all while charging no fees and providing mortgage renewal and refinance options.

At the end of 2023 Neo introduced its high-interest savings account, which was built as another financial tool that can be used by Canadian teens, after the recent launch of the JA Money card, which is also powered by Neo.

The Neo HISA has an age requirement of 13 and comes with a a stable 4% rate, meaning that you can earn double than what the Big 5 banks offer at the moment, all with no monthly fees, minimum deposits or temporary rates. You can have multiple high-interest savings accounts at the same time, and by transfering the funds to your Neo Everyday Account you also unlock higher cashback rewards, going up to 15% at more than 12,000 Neo partners.

All Neo high-interest savings accounts are provided by the Peoples Bank of Canada, and are eligible for CDIC protection on deposits up to $100,000.

What Is Neo Financial?

Founded in 2019, Neo Financial is a digital fintech company that offers an array of products such as rewards credit cards and high-interest savings accounts. It was founded by the founders of Skip the Dishes, Andrew Chau, Jeff Adamson, Kris Read, and Chris Simair, and today it has offices in Calgary and Winnipeg.

Since its foundation, the company has been thriving and managed to attract multiple investors such as Golden Ventures, Peter Thiel, Maple VC, Tobi Lutke, ATB Financial, and others.

Is Neo Financial Safe?

If you deposit money with Neo Financial, your deposits up to $100,000 are eligible for protection by the Canada Deposit Insurance Corporation (CDIC), since they will be kept safe with Peoples Bank of Canada.

When it comes to investments, your assets are guarded by the CI Investment Services (CIIS), since OneVest Management Inc. is a registered Portfolio Manager all over Canada. As a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection fund, the CIIS is a strong guarantee for your funds. Your money is protected against Neo’s insolvency for up to $1 million.

Neo Invest

Neo Invest is a robo-advisor service that’s the latest member of the Neo Financial family. With it, you can create professionally managed portfolios and have your funds invested by robo-advisors, so you can passively earn money. With Neo Financial Canada, you can plan your future and manage your wealth more wisely.

All you need to do is set pre-authorized contributions, and robo-advisors will divide your funds into ETFs. Investing can be done inside RRSPs, FSA, or non-registered personal accounts.

Neo Financial Wealth Manager 

Neo Financial has gone the extra mile by offering a wealth management service, with which you can have your portfolios customized and managed for as little as $1. You can choose a set of values such as your goals, risk tolerance, time horizons, and financial situation, and based on that, the portfolios are built.

With the wealth manager, you can create investment solutions and grow your retirement funds with ease.

Neo Partners

Neo Financial has a broad range of partners from different brands, retailers, and stores across Canada. We will not offer the complete Neo Financial Partners list, but some of them are Boston Pizza, Five Guys, Frank and Oak, Clearly, and many others. You can find partners all across Canada.

Neo Rewards

It’s always good to do your homework on maximizing your credit card rewards, especially when the offer is as abundant and varied as that of the Neo Secured Credit.

So, let’s dive into the details. Neo’s rewards are organized into four subscription-based bundles: Travel, Mind & Body, Food & Drink, and Mobile & Personal Protection. 

The bundles are designed to fit into your lifestyle and help you maximize your rewards by offering cash backs for services and products you often use. For example, if you like to dine out, subscribing to the Food & Drink bundle will bring you 1.25x more cashback at partner restaurants, cafes, and bars on average as well as 1.25x more cashback when ordering food delivery. The Travel bundle gives you 2% cash back on foreign transactions, access to Priority Pass lounges at airports, and so forth.

You can subscribe to as many bundles as you wish, although there is one exception - the aforementioned Food & Drink bundle is only available in Manitoba, Alberta, and British Columbia.

Additionally, Neo offers up to 4% cashback on all purchases made at Shell gas stations and stores if made with any of their three cards. Keep in mind that this offer is only available in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.

Neo Financial Mobile App

Neo Financial offers a mobile app for Android and iOS users. You’ll be able to access all the features and information you need without relying on your computer.

The app is user-friendly even for those who are not that tech-savvy and do not spend a lot of time online. It can be downloaded for free from the App Store and Google Play, and the installation takes only a few minutes. You can use it for paying your bills, checking offers, and quick POS transactions.

Neo Financial Customer Support

Neo Financial’s customer support can be reached by chatting with the virtual assistant 24/7 or with a representative between 7 a.m. to 8 p.m. MST, seven days a week. You can also email Neo Financial at any given time. If you’re looking to educate yourself, the articles available on the website cover plenty of relevant financial topics, and the Help Center has the answer to many common user questions.

Neo Financial Fees

With Neo Everyday account + card, you won’t have to think about any monthly or annual fees; however, interest applies for purchases (19.99%-29.99%), and cash advances (22.99%-31.99%) with the Neo Secured and Neo Credit cards.

Finally, for Neo Invest, you’d be paying a 0.75% managing fee per year, which is relatively cheap. The ETFs in your portfolio also charge the Management Expense Ratio (MER), which ranges from 0.4% to 0.5%.

Room for Improvement

While Neo Financial credit cards and its savings account offer great benefits and make it one of the top competitors in its niche, there are still parts that could use improvement. 

Specifically, the Neo Secured Credit does not offer insurance coverage, and the APR on purchases gets as high as 29.99% if you’re one of the users with a poor credit score. When it comes to Neo Money, it still hasn't caught up with the competition to support mobile cheque deposits.

Bottom Line

All in all, Neo Financial is a great company that offers a variety of financial products and services. They have excellent customer service and a good reputation. Unlike many banks, Neo Financial is an institution that caters even to those with poor to bad credit, so people who usually wouldn’t stand a chance at saving and investing can try to optimally manage their wealth.

In case Neo Financial is not your cup of tea, you can always explore the many card types on offer, and, hopefully, find the best possible solution for yourself.