KOHO vs Neo Financial: Which one is right for you?

KOHO and Neo Financial are two popular fintechs that are shaking up the Canadian banking sector. If you’re searching for competitive savings account interest rates, cards that pay cashback on your spending and user-friendly mobile apps that make it easy to manage your account, both KOHO and Neo are well worth checking out.

But which one is better? Let’s compare KOHO vs Neo Financial side-by-side to find out.

KOHO vs Neo Financial: A quick comparison

KOHO vs Neo Financial: Account options

KOHO and Neo Financial both offer chequing and savings account features, but the way they provide them varies slightly.

With a KOHO plan, chequing and savings features are combined into a single hybrid account. You can use it to carry out everyday transactions like sending e-Transfers, paying bills and paying for purchases with a prepaid Mastercard, but at the same time you also earn interest on your account balance.

But Neo Financial offers two separate accounts. The first is the Neo Everyday Account, which functions like a chequing account, supports free everyday transactions and comes with a prepaid Mastercard that offers cashback on your spending. The second is the Neo Savings Accountt, a savings account that pays interest on every dollar you deposit.

To see how KOHO’s and Neo’s accounts compare, let’s take a closer look at their key features.

Monthly fees

With both the Neo Everyday Account and Cash Account, there are no monthly fees or minimum balance requirements to worry about.

KOHO also doesn’t have a minimum balance requirement, but it offers a choice of three account plans. The entry-level Essential plan is available for free when you receive a direct deposit into your account and deposit at least $1,000 each month. The Extra and Everything plans have higher savings interest rates and cashback rates, but they come with monthly fees of $12/month billed yearly or $18 billed monthly and $14.75/month billed yearly or $22 billed monthly respectively.

Interest rates

Open a Neo Savings Account and you’ll earn Up to 3.00% interest on your balance. That’s the same rate you get with KOHO’s Essential plan.

If you want a higher rate, you can upgrade to a KOHO Extra plan for 2.5% interest or an Everything plan for 3.5%. But these plans come with monthly fees, which may offset any potential benefit you get from the higher rate.

Cashback

Depending on the KOHO plan you choose, you can get unlimited cashback at a rate of 1–2% on groceries, transportation, and food and drink purchases. Higher cashback rates are also available when you shop at partner merchants.

With Neo, your cashback rate depends on the size of your balance. You can earn 2% on gas and groceries and 0.5% on all other spending when you have $3,000 in your account.

Neo also offers ways to boost your cashback. For example, if you add the Travel perk to your account for $7.99 per month, you’ll earn 2% cashback on all foreign transactions and 1.5 times more cash back when you shop at Neo’s travel partners. However, the amount of cashback you can earn is restricted by monthly spending limits.

Who’s the winner?

KOHO but it’s a close call. We like the convenience of a single account and handy features like international transfers, but we also like the fact that Neo doesn’t charge any monthly fees.

KOHO vs Neo Financial: Credit cards

Neo Financial offers three main credit card options:

• The Neo Mastercard has no annual fee, a credit limit of up to $10,000, and pays cashback on all purchases. It pays up to $680 cashback each year.
• The Neo World Mastercard is a no-annual-fee card that pays 2% cashback on grocery, gas and recurring purchases, and 0.5% cashback on everything else. You can also access boosted cashback rates if you have a Neo Everyday Account.
• The Neo World Elite Mastercard is a cashback card that pays 5% on groceries, 4% on recurring purchases, 3% on gas and 1% on everything else. It comes with a $125 annual fee.

You can also apply for a secured Neo credit card to help you build your credit score.

Meanwhile, KOHO doesn’t offer any credit cards.

Who’s the winner?

Neo Financial is the clear winner if you’re looking for a credit card.

KOHO vs Neo Financial: Investments

Neo Financial offers the Neo Invest service, which is provided by wealth management partner OneVest. This allows you to set your investment goals, time frame and risk tolerance, and then have a customized ETF portfolio created on your behalf. You also have the option to choose from a TFSA, RRSP or a personal account.

KOHO, on the other hand, does not provide access to any online investing services.

Who’s the winner?

Neo Financial wins this category.

KOHO vs Neo Financial: Borrowing

KOHO provides a range of options for borrowers. These start with KOHO Cover, which provides an interest-free cash advance of up to $250. You can apply without a credit check, and then repay what you borrow at any time.

Next is the KOHO Line of Credit, provided by Fora, which allows you to access amounts ranging from $1,000 to $15,000. Interest rates start at 19.9%, and you only pay interest on the funds you use.

Finally, KOHO also offers a Buy Now, Pay Later option, allowing you to pay off purchases of up to $1,000 in installments over 3, 6 or 9 months.

Neo Financial doesn’t offer the same range of borrowing choices, but it does provide the Neo Mortgage service. This allows homebuyers to apply for a mortgage online and get help from a mortgage advisor, and Neo claims to offer better rates than the Big Five banks.

Who’s the winner?

KOHO is the top pick here.

KOHO vs Neo Financial: Credit building

KOHO and Neo both offer a range of products designed to help you build credit history and improve your credit score.

Open a KOHO account and you can check your credit score at no cost. And if you sign up for an Everything plan ($14.75/month billed yearly or $22 billed monthly), you get a free copy of your Equifax credit report.

KOHO also offers Credit Building, which provides you with access to a no-interest credit line for a monthly subscription fee of $5-$10. By utilizing less than 10% of that credit and making on-time repayments which KOHO then reports to the credit bureau, you’ll hopefully improve your credit score. You’ll get access to KOHO’s in-house financial coach for tips on managing your money too.

Over at Neo Financial, the Premium Plan ($9.99 per month) provides access to TransUnion credit score monitoring through the Neo app. You can also access a Secured Neo Mastercard for $7.99 a month. This allows you to provide a security deposit to set your credit limit, and Neo then reports your on-time payments to Equifax and TransUnion.

Who’s the winner?

It’s tough to split KOHO and Neo here, but KOHO takes a narrow win.

How do the mobile apps for KOHO vs Neo Financial compare?

Like all modern fintechs and financial institutions, KOHO and Neo Financial both offer iOS and Android apps.

Use them side-by-side and you’ll note that both offer sleek, stylish and user-friendly interfaces. They also make it easy to do things like transfer funds, pay bills, check balances and access spending insights. But while Neo Financial supports mobile cheque deposits, the KOHO app doesn’t.

Both apps are highly rated by users, but KOHO has a slightly higher rating on Google Play and more customer reviews.

Who’s the winner?

KOHO. The slightly higher Google Play rating and larger number of user reviews for the KOHO app see it take the win here. But if you want the ability to deposit cheques from your mobile, you’ll prefer the Neo app instead.

KOHO vs Neo Financial: Other features and perks

Neo and KOHO both offer a range of other benefits to customers.

For example, Neo Financial has subscription-based Perks plans that offer extra rewards:

• Travel. For $7.99 a month, you get cashback on foreign transactions, increased cashback when you shop at partner travel retailers, travel insurance and worldwide lounge access.
• Food & Drink. For $1.99 a month, this plan gives you 1.25 times more cashback at partner restaurants, cafes, bars and food delivery providers.

There’s also a Premium plan available for $9.99 per month. This offers an extra 2% cashback on gas and grocery purchases, boosted cashback at partner merchants, priority support and benefits like enhanced purchase protection.

Both Neo and KOHO offer budgeting tools and spending insights designed to help you get smarter about managing your money. Both also offer the security of CDIC insurance, although with KOHO, you’ll need to opt into an interest-earning account to qualify for cover.

But while you can send international money transfers from your KOHO account to over 190 countries around the world, you can’t send international transfers from a Neo account. KOHO also offers features like rent reporting, tenant insurance, and a prepaid travel card with no foreign transaction fees.

Who’s the winner?

KOHO offers a wider range of features, so it gets the nod in this category.

What does Reddit think of the KOHO vs Neo Financial debate?

Spend some time scrolling through the PersonalFinanceCanada Subreddit and you’ll find plenty of negative feedback for both KOHO and Neo Financial. The main complaint for both providers centres on poor customer support, particularly when customers are trying to resolve fraudulent transactions on their accounts.

Both KOHO and Neo also receive some positive feedback from Reddit users, commonly thanks to their competitive cashback and savings interest rates. But as for choosing a winner in the Koho vs Neo Financial debate, Reddit doesn’t sway the argument either way.

Final verdict:

While there’s plenty to like about Neo Financial’s suite of products, KOHO is the better choice for more people. With a competitive interest rate, unlimited cashback, the option of no monthly fee and a wide range of other perks, KOHO comes out on top.

But if you want the option for fee-free banking without having to set up direct deposits into the account, Neo Financial may be the better choice. Plus, you’ll still be able to earn cashback on some purchases and a decent savings interest rate.

Ultimately, make sure you compare a range of online-only banks and fintechs before deciding on the right digital banking solution for you.

Alternatives to KOHO and Neo Financial

Not sure if KOHO or Neo is right for you? Check out these other digital banking alternatives.

• EQ Bank. EQ Bank is an online-only bank best known for its hybrid Personal Account. But it also offers competitive rates on its Notice Savings Account, plus GICs, mortgages, and free ATM withdrawals across Canada with the EQ Bank Card.
• Wealthsimple. The Wealthsimple Chequing Account combines free everyday banking with competitive interest on your savings. The platform also offers stock and crypto trading, a cashback credit card and a USD savings account.
• Simplii Financial. CIBC’s digital banking arm offers a No Fee Chequing Account and a High Interest Savings Account that regularly features attractive promo interest rates. Other products on offer include a Cash Back Visa, personal loans, lines of credit, GICs and mortgages.
• Tangerine. A subsidiary of Scotiabank, Tangerine is a digital bank that offers a Savings Account, a No-Fee Daily Chequing Account and a choice of 2 cashback credit cards. It also offers GICs, investment accounts, mortgages and lines of credit.

Frequently asked questions

• Is KOHO a bank?

  No, KOHO is not a bank but a fintech company that offers a range of financial services. It is registered as a Money Services Business by FINTRAC. However, the Toronto-based company is in the process of working to obtain a Schedule 1 banking licence.

• Is Neo Financial a bank?

  No, Neo Financial is a fintech, not a bank. It offers a range of financial products and services to Canadians, including a savings account, an account for everyday transactions, and a range of credit cards.

• Is my money CDIC insured with KOHO and Neo Financial?

  Yes. Neither KOHO nor Neo Financial is a CDIC member institution. However, if you opt in to KOHO Earn Interest or if you have a Neo Savings Account or Everyday Account, your funds are held in trust with CDIC member institutions.

• Do KOHO and Neo have any branches?

  No, KOHO and Neo Financial are online only and do not operate any physical branches. If you want to do your banking with a provider that offers in-person customer service, you’ll need to consider other options.

Written by

Tim Falk

Writer

Tim Falk is a freelance writer for Finder. Over the course of his 15-year writing career, he has reported on a wide range of personal finance topics. Whether you're investing in stocks and ETFs, comparing savings accounts or choosing a credit card, Tim wants to make it easier for you to understand. When he’s not staring at his computer, you can usually find him exploring the great outdoors. See full bio

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