KOHO vs Neo Financial: Who Wins the Battle for Your Buck?

Koho vs Neo Financial

Both KOHO and Neo are Canadian fintech startups that offer out-of-the-box digital banking services. These two platforms are becoming increasingly popular among millennials and younger Canadians because they provide an alternative to traditional banking with low or no fees, a personalized user experience, and access to financial tools that help people better manage their money. We think Neo financial has more to offer than KOHO. But you might think otherwise, depending on your needs. In this article, we compare KOHO vs Neo Financial to help you decide which one is better suited to your needs.

What is KOHO?

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KOHO is a non-bank that offers an alternative to traditional banking. KOHO works in partnership with Peoples Trust, a bank that operates under federal regulations, to securely store the funds add to your KOHO account, which are also eligible for CDIC protection. KOHO provides a mobile app and Prepaid Mastercard that allow you to quickly and easily manage your money on the go while earning bank-beating interest and cash back on purchases.

What is Neo Financial?

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Neo Financial is a fintech company that offers a robust alternative to traditional banking. Neo has partnered with ATB Financial, Equitable Bank and Concentra Bank, to keep your cash safe and eligible for CDIC protection. Neo Financial also offers both a mobile app and desktop platform, as well as a prepaid Mastercard that earns instant cash back on eligible purchases. Neo strives to make banking simple, transparent and rewarding for Canadians by providing us with a personalized experience that we can tailor to our unique financial needs.

KOHO’s prepaid card vs Neo’s cards

KOHO provides a prepaid Mastercard while Neo Financial offers both a prepaid Mastercard, called the Neo Money Card, as well as traditional credit cards like the Neo Credit and Neo Secured Credit Card. Neo has a better offer of cards, because you can get both a prepaid and a credit card.

Both KOHO and Neo Financial offer an account with almost all the same functions as a traditional chequing and savings account. However, Neo’s basic Money account is completely free of monthly charges for acount maintenance, whereas KOHO charges $4.

Fortunately, there is a workaround. KOHO Essential, the basic plan, is offered at $0 for new users who deposit $1,000 per month into their account or who choose to set up the direct deposit of their paychecks.

The KOHO prepaid Mastercard offers 1% cash back on groceries, eating & drinking, and transportation plus up to 50% extra cashback from select merchants. The Neo Money card offers 1% cashback on gas and groceries as well as an average of 5% cash back when you shop with one of Neo’s partner merchants which include major gas stations, grocery stores, restaurants, gyms, as well as small local businesses near you.

Both Neo and KOHO offer tiered plans. KOHO’s Extra ($9 per month) and Everything ($19 per month) plans will give you more cash back, just like Neo’s Premium plan at $4.99 per month.

Earning interest with KOHO vs Neo Financial

With the KOHO Essential plan, every dollar in your account earns 5% interest. Neo Financial offers 2.25% interest on your deposits in a Neo Money account. Moreover, Neo offers a high interest rate account, which offers 4%. Interest is calculated daily and deposited to your account monthly. 

Savings features

Both KOHO and Neo Financial give you a personalized banking experience through their mobile apps, which allow you to track your spending, set budgets, create savings goals, and more.

The KOHO app offers a suite of tools to help you budget, save, build credit, and more. Savings features include:

  • The Vault: the Vault serves as a savings account separate from the regular account linked to your prepaid card. You stash money away in the Vault that you don’t want to spend, where it continues to earn interest.
  • Goals: the Goals feature allows you to set savings goals but amount, date, or both. You can track your progress and adjust your timeline and contributions amount as needed. Unfortunately, you cannot set up automatic transfers to move money into the Vault for you. You’ll need to proactively do this yourself. 
  • RoundUPs: the RoundUps feature lets you save money every time you spend. You can choose to round up purchases to the nearest $1, $2, $5, or $10. KOHO will automatically deposit the extra change into the Vault for you. 

Neo Financial does not offer comparable features to level up your savings rate. There’s no comparable RoundUp feature that lets you turn purchases into accelerated savings, for instance. However, you can open up to 10 Neo savings accounts to save money for different projects.

Budgeting features

Both KOHO and Neo Financial allow you to set up automatic bill payments from your account using either your prepaid card information or your account, route, and transit numbers. This way, you never run the risk of forgetting to pay a bill that could hurt your credit score or cause your service to be terminated. 

To help you stay on budget, both the KOHO and Neo Financial mobile apps give you real-time spending insights with a transaction history, balance updates, spending trends over time, and spending behaviour by category. 

Mon budget avec KOHO graphique
Neo Financial The app also provides a variety of graphs that show your spending over time, making it easier to curb poor financial habits.

KOHO takes budgeting a step further by allowing you to create and customize your budget by inputting your net monthly income, fixed expenses, variable expenses, and target spending amounts for different categories. The app will track your activity and give visual cues, like a coloured-coded progress wheel, to help keep you accountable to achieve your goals. 

Neo Financial does not offer this kind of budgeting tool. Rather, you can use the Neo Money Account to support your budgeting goals by depositing only the amount of money you want to spend. Then, use the app insights to track and modify your spending behaviour. 

Credit building features

KOHO offers a unique subscription plan called Credit Building that allows you to (re)build your credit score without a credit card or borrowing money. For $10 a month, KOHO Essential will open a tradeline on your credit file and report your monthly subscription payments to the credit bureaus. You can cut down this fee by 50 % if you subscribe to the Everything plan.

The plan runs for 6 months and you can choose to re-subscribe to continue building your credit. You also have the choice between a recurring monthly payment out of your KOHO account or pay the full 6 months upfront. 

Neo Financial does not offer a comparable credit-building feature. However, Neo does offer traditional credit cards that can help build your credit when used properly. 

The Neo Cash Back Rewards Mastercard requires you to apply and submit to a credit check. You can use the card to improve your credit score by paying the balance off in full every month before the due date.   If you have bad or no credit, the Neo Secured Mastercard offers guaranteed approval with no credit check, and a low minimum security deposit of just $50. The card limit is the same amount as your security deposit. You can increase your limit at any time by depositing additional security funds. 

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Both Neo Financial Mastercards come with:

  • No annual fee
  • 5% cash back on average at Neo partners
  • Up to 15% cash back for each first purchase at a Neo partner
  • Subscription bundles to customize your rewards & perks
  • Real-time spending insights from the mobile app

Additional perks

KOHO offers additional perks such as overdraft protection and expert financial advice personalized just for you. These unique benefits set KOHO apart from Neo Financial and provide you with more opportunities to manage cash flow and crush goals on your terms. On the other hand, Neo Financial offers unique services like an investing platform (services provided by OneVest) and a mortgage marketplace. These perks are not currently available with KOHO, making Neo Financial an attractive option if you’re looking to consolidate your finances in one spot. 

What’s the verdict?

Both KOHO and Neo Financial have their own unique advantages and disadvantages. KOHO offers more choices with savings features and in-app budgeting tools. But Neo also has tiered plans for the Neo Money account on top of a broader offering including credit cards and investments. In our opinion, Neo wins the battle for your buck.

Heidi Unrau is a senior finance journalist at Hardbacon. She studied Economics at the University of Winnipeg, where she fell in love with all-things-finance. At 25, she kicked-off her financial career in retail banking as a teller. She quickly progressed to become a Credit Analyst and then Private Lender. This hands-on industry experience uniquely positions her to provide expert insight on loans, credit scores, credit cards, debt, and banking services. She has been featured in publications such as WealthRocket, Scary Mommy, Credello, and Plooto. When she's not chasing after her two little boys, you'll find her hiding in the car listening to the Freakonomics podcast, or binge-watching financial crime documentaries with a bowl of ice cream. Fun Fact: Heidi has lived in five different provinces across Canada and her blood type is coffee.