The 6 Best Neobanks in Canada

Are you looking for a better way to bank? Neobanks are just what your dollar ordered. But what exactly is a neobank? Neobanks are digital-only banks and financial technology (fintech) companies that offer financial solutions directly to consumers. Without the expensive operating cost of brick-and-mortar locations, neobanks pass the savings on to us with reduced fees or no fees at all, better rates, and attractive perks. Let’s take a look at some of the best neobanks in Canada and what they have to offer.

Neo Financial – Best Overall

Neo Financial is a new online-only neobank in Canada that offers a host of financial services including a money account, various credit cards, investment tools, and a killer cash back program. If you’re from Western Canada, you’ve probably heard of the popular food delivery app SkipTheDishes. The bright minds that revolutionized take-out are the same ones behind Neo Financial. Here’s a look at what Neo Financial has to offer:

Neo Money Account and HISA

At its core, Neo Financial is all about making your money work for you. It kicks off with the hybrid chequing-savings account, Neo Money. It’s free to use, packed with unlimited transactions, and absent of any monthly fees. It comes with a versatile cash back prepaid Mastercard, giving you instant access to your own money everywhere that Mastercard is accepted.

Neo also offers a high interest savings account: Neo HISA. Using the account is free. Every dollar in your account earns an ambitious 4% interest rate, making it one of the best high interest savings accounts in Canada. You can open 10 accounts and transfer money instantly between them. Interest is calculated daily and paid monthly, and you can track the amount of interest you’ve earned through the Neo mobile app.

Neo Credit Cards

The cash back rewards take center stage with the Neo Mastercard. Think 5% average cash back at Neo partner retailers, up to 15% welcome cash back bonus on your first purchase at every Neo partner, and a minimum of 0.5% cash back on everything else. If your average cash back dips below 0.5%, Neo’s got your back with a guaranteed top-up.

For those who might have a harder time getting a traditional credit card, Neo offers the Secured Mastercard. With guaranteed approval, no hard credit check, and a tiny $50 security deposit (one of the lowest out there), it’s a breeze to get started. Plus, your payment history goes straight to TransUnion, helping you build your credit while racking up those cash back rewards.

KOHO – Best App for Spending and Saving

KOHO is a Canadian financial technology company that provides essential banking services. With KOHO you’ll get incredible rewards, and creative financial solutions exclusively online. All your banking is done online through the KOHO mobile app. The KOHO prepaid card is one of the best prepaid cards on the market. The mobile app is user-friendly and it helps you budget and save better. It lets you see where your money went, set goals and apply Round Ups (each purchase is rounded up to the nearest dollar and added to your savings), for instance. Other perks include a program to build your credit score.

KOHO accounts

Imagine having a chequing and savings account bundled together, free of charge, with unlimited transactions. It gets better, you can customize your banking experience with monthly subscription plans that unlock advanced features and benefits. Depending on the plan you choose, you’ll earn interest between 3% and 5% on every dollar you deposit.

Your complimentary KOHO prepaid card opens the door to a world of cash back and savings. It’s accepted pretty much anywhere you’d use a credit card. Sounds like a sweet deal, right? Depending on your KOHO account plan, you’ll earn up to 2% cash back on essentials like groceries, dining, and transportation. Fancy up to 5% bonus cash back at KOHO partner retailers? Done! Plus, you can speed up your savings journey by rounding up your purchases.

Credit Building

Building credit can feel like climbing a mountain, but KOHO’s got your back. Their Credit Building program helps you either establish a credit history or repair an existing one, all for just $10 a month. No hard credit checks, guaranteed approval, and every monthly payment reports to the credit bureaus. It’s a 6-month program that can be renewed whenever you want to keep bolstering your credit score.

EQ Bank – International Transfers Made Easy

EQ Bank is the neobank often referred to as Canada’s “original challenger bank.” It is a digital-only online bank wholly owned by Equitable Bank, which is Canada’s 8th largest independent bank that is federally regulated under the Bank Act. With this neobank, you get access to personal bank accounts, investment accounts, global money transfers to 160 countries through Wise, and mortgages. When you transfer money, you get the real exchange rate and benefit from EQ’s full transparency on fees. An account also comes with a prepaid Mastercard that earns cash back.

The EQ Bank Card is like your trusty debit card, with a twist. It’s a prepaid Mastercard that lets you access your cash, shop online, and in-store. The best part is that they’ll reimburse any ATM fees you encounter in Canada, and every purchase will earn you 0.5% cash back! Plus, you ditch foreign transaction fees too, making it a great card to use while travelling or shopping with international retailers.

EQ Accounts

Their Personal Account is a two-in-one deal, a hybrid chequing-savings account. And guess what? It’s rocking a competitive up to 3% interest rate on every single dollar you stash away, with no account minimums or fees. It’s all about unlimited and fee-free transactions here, whether you’re paying bills, transferring funds, or sending eTransfers. And if you fancy sharing the love (and the account benefits, with a maximum of 3 people), they even offer a Joint Account.

To avoid paying taxes on the interest earned, choose one of their guaranteed investment certificate (GIC) options to grow your money in a tax-free savings account (TFSA). They start at a term of 6 months. You will earn interest without paying taxes on it.

The EQ Bank US dollar account allows you to earn 3% on every dollar deposited into your US account. Not yet available to Quebec residents, it’s free with no monthly fees, and you can easily buy US cash with one of the lowest exchange rates on the market. You can send US dollars to other US account holders in the US and abroad, with free USD to USD transfers in Canada.

Mortgage Marketplace

EQ Bank has even ventured into the mortgage market. Their Mortgage Marketplace lets you compare over 2,000 mortgage products from various Canadian lenders, including from Equitable Bank. The whole application process can be completed online in just a few minutes. They’ll match you with the right mortgage, connect you with a broker, and even help you get pre-approved.

Wealthsimple – Best for Investments

Wealthsimple is an investing-centred fintech, and one of Canada’s favourite online trading platforms. Established in 2014, the company has now amassed over $8.4 billion in assets under management (AUM). Their revamped Cash Account levelled them up from a beloved robo-advisor to a bonfided neobank. Let’s take a look at Wealthsimple’s key features: 

Cash Account

Let’s start with their spending and saving platform, the Wealthsimple Cash Account. Think of it as a Venmo alternative with a twist. This account comes with a free prepaid Mastercard offering unlimited transactions and a rewarding 1% cash back on your purchases. The real kicker? You can receive it as cash, stocks, or crypto! The app also lets you effortlessly send and receive money to and from your contacts in an instant. And every dollar in your account earns at least 4% interest.

Wealthsimple Invest

Investing made simple—that’s what the Wealthsimple Invest platform is all about. This robo-advisor uses top-notch technology to craft a personalized investment portfolio that aligns with your goals, risk appetite, and timeline. You can choose to invest in an array of account types including RRSP, TFSA, FHSA, RESP, RIFF, LIRA, or a personal non-registered account—all for a 0.5% management fee. Once your money is deposited, sit back and relax as Wealthsimple diversifies your portfolio, rebalances it, and reinvests your dividends.

Do you prefer managing your money yourself? For the active investor, there’s Wealthsimple Trade, a platform for commission-free stock trading. You can kickstart your journey with as little as $1. You can also trade cryptocurrencies via this platform. According to Wealthsimple, you will never pay more than 2% in fees per transaction. All your crypto can be stored in custody on the platform and many can be transferred to your own private wallet. And with the new crypto staking feature, you can earn passive income on certain coins.

Tangerine – The Closest to Traditional Banks

Tangerine is one of Canada’s favourite digital-only banks, combining simplicity with generous benefits. This neobank was originally ING Direct, a Netherlands-based challenger bank that entered the Canadian market in 1997. But in 2012, Scotiabank acquired ING Direct and renamed it Tangerine.

Chequing and Savings Accounts

Their No-Fee Daily Chequing Account is all about freedom and flexibility – think zero monthly fees, a Visa-debit card that’s accepted like a credit card pretty much everywhere, and a slew of unlimited, fee-free transactions. Need to use an ATM? No problem! You have free access to all Scotiabank ATMs across the country.

Now, if you’re all about saving up for a rainy day, Tangerine’s high-interest savings accounts are quite the treat. With no monthly fees, and no minimum balance, they’re a no-brainer for those looking to grow their money. Reaching your savings goals becomes effortless with an Automatic Savings Program (ASP) and unique Money Rules features. You can choose from a range of savings accounts, including a basic savings account, TFSA, RSP, RIF, and even a US savings account.

Credit cards

For the spenders out there, Tangerine offers two fantastic cash back credit cards, the Tangerine World Mastercard and the Tangerine Money Back Mastercard. Both are free with no annual fee, and they let you earn a whopping 2% cash back in up to two spending categories of your choice – with no cash back limit!

The World Mastercard takes it up a notch with additional perks like Mastercard Travel Rewards, Boingo WiFi access, subscription services, rental car insurance, mobile device insurance, and airport lounge access.

Tangerine doesn’t stop there. They also offer guaranteed investment certificates (GICs), investment funds, mortgages, lines of credit, and business accounts.

Simplii Financial – Best for its Cash Back Credit Card

Simplii Financial is a digital-only online bank owned by CIBC. They offer no-fee accounts but they do not pay as much interest as most other neobanks. However, their credit card is quite interesting. You can get a decent amount of cash back if you spend a lot in categories such as dining, groceries and pre-authorized payments.

Chequing and Savings Accounts

The Simplii Financial No-Fee Chequing Account is a gem, offering you unlimited debit card purchases, bill payments, withdrawals, and Interac eTransfers at no cost. Plus, you get free access to all CIBC ATMs across Canada, making cash withdrawals a breeze.

Let’s head on over to their High Interest Savings Account. Free of monthly fees, this account gives you up to 6% interest on every dollar (during the promotional period, after which it falls to 0.40%), with no minimum balance to worry about. Now, it’s not directly accessible through your debit card or an ATM, but moving money to your Simplii chequing account for use is as easy as a few taps on your phone.

Credit card

For those of us who enjoy a bit of spending, the Simplii Financial Cash Back Visa Card is a no-brainer. This no-fee credit card offers a stellar 4% cash back on your dining and coffee shop outings, 1.5% back on gas, groceries, drugstore purchases, and pre-authorized payments, and a solid 0.5% back on all other purchases. And guess what? There’s no limit on how much cash back you can earn. Your rewards are paid out annually in December, making it a nice little year-end bonus!

But wait, there’s more! Simplii Financial has a roster of additional products, including global money transfers, digital gift cards, foreign cash, and a variety of investment products as well as a student banking package.

Neobank Pros and Cons

Neobanks have emerged as disruptive players in the financial sector, offering notable advantages but also presenting distinct challenges. Their simplified accessibility and competitive prices make them attractive alternatives, while highlighting technological innovation. However, their limitation in terms of comprehensive banking services highlights the need for a balanced assessment of their advantages and disadvantages.