When comparing KOHO vs Neo, these Canadian fintech startups offer prepaid cards, high interest savings accounts, and budgeting tools as alternatives to traditional banking, with KOHO focusing on hybrid spending and savings features while Neo Financial emphasizes credit cards with partner cashback rewards.
Key Takeaways
- KOHO offers a prepaid Mastercard with up to 3.5% interest on your entire balance, 1-2% cash back on groceries and everyday spending, optional credit building for $5-$10/month, and no FX fees on premium plans
- Neo Financial provides credit cards and secured card options with average 5% cash back at 10,000+ Neo partners, high interest savings accounts up to 2.5%, and reports to both credit bureaus (TransUnion and Equifax) starting May 2024
- Best for budgeting: KOHO accounts excel with built-in financial tools like Goals, RoundUps, and Vault features that help you save money automatically
- Best for earning rewards: Neo credit card wins with significantly higher cash back rates at select merchants (up to 15% on first purchases)
- Foreign spending: KOHO Extra and Everything plans waive FX fees entirely; Neo charges 2.5% transaction fees on international purchases
- Credit building: KOHO offers guaranteed approval credit building from $5/month reporting to Equifax; Neo's regular and secured card report to both credit bureaus but require actual credit usage
- For cash advances: While KOHO offers Cover (up to $250) and Neo has punishing cash advance rates (22.99-31.99%), platforms like Bree offer interest-free advances up to $500 with no credit check—often a better option for managing cash flow
KOHO vs Neo Quick Comparison Guide
What Is KOHO and How Does It Work?
KOHO is a Toronto-based financial technology company founded in 2014 that provides Canadians with a KOHO prepaid Mastercard paired with a high interest savings account, offering account features like instant cashback, automated budgeting, and financial tools without requiring a credit check—making it an attractive option for anyone who wants guaranteed approval.
Unlike traditional banking with big banks, KOHO partners with Peoples Trust Company, a Canadian financial institution, to hold customer funds securely with CDIC protection up to $100,000 (Peoples Trust Company). The platform operates entirely through its mobile app (4.8/5 on Apple App Store) and website, with no physical branches.
How KOHO Account Works:
- Loading Money: Add funds via recurring direct deposit, Interac e-Transfer, or linked bank account
- Spending: Use your prepaid card anywhere Mastercard is accepted with instant cashback
- Earning Interest: Earn 2.5-3.5% high interest annually on your entire balance depending on plan, with automated savings tools
Four KOHO Account Tiers:
- KOHO Free ($0 monthly fee): 0.5% cash back, basic account features
- KOHO Essential ($4 monthly fee, waived with $1,000+ recurring direct deposit): 1% cash back on groceries, dining, transportation; 2.5% interest rate; essential account features
- KOHO Extra ($12 monthly fee): 1.5% cash back; 3% interest; no FX fees
- KOHO Everything ($19 monthly fee): 2% cash back plus 0.5% on everything; 3.5% interest rate; no FX fees; one free international ATM withdrawal
KOHO accounts also include optional credit building ($5-$10/month depending on plan) and Cover (up to $250 cash advance for $2+/month). However, if you need emergency cash without monthly fees, Bree provides interest-free advances up to $500 with no subscription—you only tip what you feel is fair, helping you save money on interest charges.
What Is Neo Financial and What Does It Offer?
Neo Financial is a Calgary-based fintech company launched in 2019 that offers credit cards, prepaid cards, high interest savings accounts, and mortgages as alternatives to traditional credit cards and traditional banking, with a focus on delivering cash back through an extensive network of 10,000+ Neo partners across Canada.
Neo Financial Offers:
1. Neo Credit Card (Mastercard): A no annual fee credit card earning average 5% cash back at partner locations, with interest rates of 19.99-29.99% on purchases and 22.99-31.99% cash advance rate (Neo Financial). This is a true credit card, not a prepaid card, meaning it reports to credit bureaus and requires responsible management.
2. Neo Secured Card (Secured Mastercard): Requires minimum $50 security deposit, offers guaranteed approval, charges $5 monthly fee, delivers same cash back as regular card, and reports to both credit bureaus for credit building (Million Dollar Journey).
3. Neo Money Card & Account: A prepaid card option with 0.1% interest rate, up to 2.5% cash back at Neo partners, no monthly fees, and functions more like a debit card.
4. Neo High Interest Savings Account: Up to 2.5% interest rate annually (reduced from 4% in May 2025), calculated daily and paid monthly, separate from spending account (Neo Financial). This high interest savings account remains competitive compared to traditional banks but has been adjusted in response to Bank of Canada rate changes.
As of May 2024, all Neo Financial products report to both Equifax and TransUnion credit bureaus, addressing earlier limitations and making it easier for Canadian residents to build comprehensive credit scores (Finextra).
How Do KOHO and Neo Compare by Feature?
Cash Back and Earning Rewards
KOHO accounts offer consistent category-based cash back: 0.5-2% on everyday spending depending on plan, with up to 50% extra cash back at approximately 100 select merchants including major retailers (KOHO Financial).
Neo credit card provides partner-focused earning rewards: average 5% cash back at 10,000+ Neo partners, up to 15% on first eligible purchases, but only 0.5% at non-partner merchants (Finley Wealth). The main advantage is the extensive partner network across Canada.
Winner: Neo Financial for earning rewards if you shop regularly at partners; KOHO for predictable cash back everywhere.
High Interest Savings Accounts
KOHO: Pays 2.5-3.5% high interest on your entire balance automatically, making it one of the best high interest savings accounts in Canada without requiring transfers between savings accounts (KOHO Financial). The Everything plan at 3.5% offers strong returns for a prepaid account.
Neo: Offers 0.1% interest rate on Money account, up to 2.5% in separate high interest savings account (Neo Financial). The rate was reduced from 4% to 2.5% in May 2025 following Bank of Canada policy rate adjustments. You must actively move money to the savings account to earn the higher interest rates.
Winner: KOHO accounts at 3.5% edge Neo's 2.5% high interest, plus simpler account features—you don't need to manually manage multiple savings accounts.
Financial Tools and Budgeting
KOHO accounts excel with comprehensive financial tools: RoundUps (automatic savings), Goals (savings goals tracking), Vault (separate savings bucket), real-time notifications, spending categorization, and access to certified financial coaching on premium plans.
Neo Financial offers basic spending tracking and savings goals but focuses primarily on earning rewards at Neo partners rather than money management.
Winner: KOHO by a significant margin for those who want to save money through automated budgeting and financial tools.
Transaction Fees and FX Fees
KOHO: Charges 1.5% FX fees on Free and Essential accounts; waives all FX fees on Extra and Everything plans for international spending (KOHO Help Center).
Neo: Charges 2.5% transaction fees on all international purchases regardless of account type (Neo Financial).
Winner: KOHO's premium plans eliminate FX fees entirely—valuable for Canadian residents who travel or shop internationally.
Monthly Fees and Account Costs
KOHO: $0-$19 monthly fees depending on account tier (KOHO Essential's $4 monthly fee waived with recurring direct deposit or $1,000 monthly deposit).
Neo: $0 annual fees for credit cards and Neo Money Card; $5 monthly fee for secured card option.
Winner: Tie—both offer free baseline options, making them attractive alternatives to traditional banking.
How Easy Is It to Open an Account?
Opening new accounts with both KOHO and Neo is straightforward and can be completed entirely online within minutes, though Neo requires a hard credit check for credit cards while KOHO only performs a soft inquiry that doesn't impact credit scores.
KOHO Sign-Up:
- Download app or visit koho.ca
- Provide personal information and verify identity with photo ID
- Select account tier (Free, Essential, Extra, or Everything)
- No hard credit check—offers guaranteed approval for all Canadian residents at age of majority
Time: ~5 minutes | Credit check: Soft inquiry only | Card delivery: Virtual card immediate, physical in ~10 days
Neo Sign-Up:
- Download app or visit neofinancial.com
- Choose product (Neo credit card, secured card, or Neo Money Card)
- Provide personal details including income for credit cards
- Upload ID and take verification selfie
- Wait for approval (usually hours)
Time: ~5-10 minutes | Credit check: Hard check for credit cards | Card delivery: Virtual card immediate, physical in 15 days (Finder Canada)
Winner: KOHO for accessibility—guaranteed approval with no impact on credit scores makes it ideal for students, newcomers to Canada, or anyone rebuilding finances.
Which Offers Better Rewards and Cash Back?
Neo Financial delivers significantly higher cash back potential with 5% average at 10,000+ Neo partners compared to KOHO's 1-2% cash back on groceries and everyday categories, but KOHO accounts provide more predictable earning rewards regardless of shopping location.
KOHO Cash Back Structure:
- Free plan: 0.5% on all purchases
- Essential account: 1% cash back on groceries, dining, transportation
- Extra: 1.5% on select categories
- Everything: 2% on select categories + 0.5% everywhere else
- Up to 50% extra at approximately 100 select merchants
Neo Financial Cash Back Structure:
- Average 5% cash back at 10,000+ Neo partners
- Up to 15% on first eligible purchases at specific partners
- 1% on gas and groceries (whether partners or not)
- Minimum 0.5% guarantee on all spending
- Instant cashback to your account
Real-World Example: $1,000 monthly spending (60% at Neo partners):
- KOHO Everything: ~$14/month ($168 annually)
- Neo Credit Card: ~$32/month ($384 annually)
The main advantage of Neo partners is the breadth—10,000+ locations including major chains and local businesses. However, if you don't shop at Neo partners frequently, KOHO's consistent rates may deliver better actual returns.
Which Has Lower Fees and Better Value?
Both KOHO and Neo offer free baseline accounts with no annual fees, making them excellent alternatives to traditional banking at big banks that charge $4-$17 monthly fees for chequing accounts (Government of Canada, major financial institutions).
Hidden Costs to Consider:
KOHO Accounts:
- ATM withdrawals: $2 domestic, $4 international (1 free/month on Everything plan)
- FX fees: 1.5% or 0% depending on plan
- Credit building: $5-$10 monthly fee optional
- No annual fees on any account
Neo Financial:
- Cash advance rate: 22.99-31.99% interest—avoid these
- ATM withdrawals: $2.50-$5 per transaction
- FX fees: 2.5% on all international spending
- Premium perks: $4.99 monthly fee optional
- No annual fees on credit cards
Cash Advance Comparison: If you need emergency cash or extra cash, both platforms have limitations. KOHO's Cover offers up to $250 for $2+ monthly fee, while Neo charges punishing 22.99-31.99% cash advance rates. In contrast, Bree provides up to $500 in interest-free advances with no monthly fees—you pay only optional tips. For Canadians facing unexpected expenses or managing cash flow, Bree's 0% interest rate can save hundreds compared to traditional credit cards or payday loans.
Which Offers Higher Interest on Savings?
KOHO accounts offer higher maximum interest rates at 3.5% on the Everything plan compared to Neo's 2.5% High Interest Savings Account (reduced from 4% in May 2025), plus KOHO automatically pays interest on your entire balance without requiring transfers to separate savings accounts.
KOHO Interest Rates:
- Essential account: 2.5%
- Extra: 3%
- Everything: 3.5%
- Paid on entire balance automatically
- Among the best high interest savings accounts in Canada
Neo Interest Rates:
- Money account: 0.1%
- High interest savings account: 2.5% (reduced from 4% in May 2025 following Bank of Canada rate changes)
- Requires manual transfers to earn higher rates
Both significantly outperform traditional banking at big banks paying 0.01-0.05% interest rates (Hardbacon). For Canadians focused on earning interest and growing savings, these challenger banks provide substantially better returns than traditional financial institutions, though Neo's recent rate reduction makes KOHO's Everything plan more competitive.
Which Is Better for Building Credit?
Neo Financial offers more comprehensive credit building through actual credit card usage reporting to both Equifax and TransUnion credit bureaus, while KOHO provides optional credit building that reports only to Equifax but offers guaranteed approval regardless of credit scores.
KOHO Credit Building:
- Costs $5-$10 monthly fee depending on account plan
- Opens $225 line of credit (you don't access the funds)
- Reports positive payment activity to Equifax only
- Offers guaranteed approval—no credit check required
- Set manual utilization rate (keep under 10%)
- Safe credit building with no risk of debt
KOHO's credit building system works by depositing dedicated funds and reporting monthly payments as you maintain low utilization, helping you build credit scores without actual credit card debt (KOHO Financial).
Neo Financial Credit Building:
- Regular Neo credit card: Reports to both credit bureaus with actual credit usage
- Secured card: $50 minimum security deposit, reports to both bureaus, offers guaranteed approval
- $5 monthly fee for secured card ($60 annually)
- Requires responsible management to avoid interest rates of 19.99-29.99%
Neo Financial reports your actual credit card activity—eligible purchases, payments, and utilization—to both TransUnion and Equifax starting May 2024 (Finextra). This provides comprehensive credit building across both credit bureaus but requires disciplined repayment.
Winner: Neo Financial for comprehensive credit building across both bureaus; KOHO for guaranteed approval and zero-risk credit building with no debt possible. Choose KOHO accounts if you're worried about overspending with traditional credit cards; choose Neo if you can manage credit responsibly.
Which App Delivers a Better User Experience?
Both KOHO and Neo deliver highly-rated mobile experiences with personalized user experience features, with KOHO scoring 4.8/5 on Apple App Store (78,000+ reviews) and 4.4/5 on Google Play, while Neo maintains 4.8/5 on Apple and similar ratings across Android platforms (KOHO Financial, Neo Financial).
KOHO Account Features:
- Intuitive budget tracking and spending categorization
- Visual financial tools (Goals, Vault, RoundUps)
- Real-time spending notifications
- In-app financial coaching on premium plans
- Instant card locking/unlocking
- Free credit score checks through partners
Neo Financial Account Features:
- Partner merchant locator showing cash back rates at Neo partners
- Instant cash back redemption
- Quick card freeze/unfreeze
- Mortgage and investment integration
- Fast application process
Both apps support Apple Pay and Google Pay, offer instant virtual cards upon approval, and provide 24/7 customer support through in-app chat—features rarely found in traditional banking with physical branches.
What Are the Pros and Cons of KOHO and Neo?
KOHO Pros and Cons
Pros:
- No credit check required—offers guaranteed approval to all Canadian residents
- Prepaid card model prevents debt and overspending
- Strong financial tools (RoundUps, Goals, Vault)
- High interest rates (up to 3.5%) paid on entire balance automatically
- No FX fees on Extra and Everything plans
- Guaranteed approval credit building option
- CDIC protection on deposits
- No annual fees on any account
Cons:
- Lower cash back rates (1-2%) compared to Neo partners
- Monthly fees unless you maintain $1,000 deposit or recurring direct deposit
- Credit building only reports to Equifax, not both credit bureaus
- Limited select merchants (~100 partners)
- 1.5% FX fees on lower-tier plans
- ATM withdrawal transaction fees ($2-$4)
Neo Pros and Cons
Pros:
- Exceptional cash back at 10,000+ Neo partners (average 5%)
- No annual fees on credit cards
- Secured card offers guaranteed approval with low $50 security deposit
- Reports to both Equifax and TransUnion credit bureaus
- Competitive 2.5% high interest savings account
- Free Interac e-Transfers and pay bills features
- Welcome bonus offers on new accounts
Cons:
- Only 0.5% cash back at non-partner merchants
- Requires hard credit check for credit cards (impacts credit scores temporarily)
- Higher interest rates on unpaid balances (19.99-29.99%)
- Punishing cash advance rate (22.99-31.99%)
- 2.5% FX fees on all international purchases
- Must actively manage credit to avoid debt
- Limited budgeting and financial tools compared to KOHO
FAQs
Is Neo bank worth it?
Yes, Neo Financial is worth it if you regularly shop at Neo partners where you'll earn average 5% cash back—significantly higher than traditional credit cards from big banks. However, if you rarely shop at Neo partners, you'll only earn 0.5% baseline cash back, making other financial products potentially better. Neo works best for Canadian residents who can check the partner locator before shopping and strategically use the card for earning rewards at select merchants.
What bank is behind KOHO?
Peoples Trust Company is the banking partner behind KOHO accounts, holding customer deposits and providing CDIC protection up to $100,000 per depositor. Peoples Trust is a federally regulated financial institution in Canada, ensuring your funds are protected with the same insurance coverage as big banks. KOHO itself is a financial technology company, not a traditional bank, but partners with Peoples Trust to provide secure banking services without physical branches.
Is KOHO good for beginners?
Yes, KOHO prepaid Mastercard is excellent for beginners because it offers guaranteed approval with no credit check, uses a prepaid card model that prevents overspending and debt, and includes built-in financial tools that teach healthy money habits. The RoundUps, Goals, and Vault account features help beginners save money automatically without thinking about it. Students, newcomers to Canada, and anyone rebuilding their finances will find KOHO's guaranteed approval and educational approach particularly helpful compared to traditional credit cards.
Is Neo bank safe?
Yes, Neo Financial is safe and legitimate. Customer deposits are held by Concentra Bank and Peoples Bank of Canada, both CDIC member financial institutions, providing up to $100,000 CDIC protection per depositor (Neo Financial). Neo is regulated as a Money Services Business by FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) and partners with established banking services providers like ATB Financial and Mastercard. The company uses encryption and modern security measures to protect customer data and accounts.
Which Is Right For You?
Choose KOHO if you:
- Want to avoid credit checks and debt with a prepaid Mastercard
- Need strong financial tools and automated savings goals
- Travel internationally frequently (Extra or Everything plans waive fees and eliminate FX fees)
- Prefer guaranteed approval credit building reporting to Equifax
- Want high interest (up to 3.5%) paid on your entire balance automatically
- Like consistent, predictable cash back rates on groceries and everyday spending
Choose Neo Financial if you:
- Shop regularly at Neo partners (10,000+ locations)
- Want to maximize cash back earning rewards (average 5% at select merchants)
- Can manage traditional credit cards responsibly without carrying balances
- Need credit building reporting to both credit bureaus (Equifax and TransUnion)
- Want a true credit card experience with better cash back than big banks
- Don't mind checking Neo partners before shopping to optimize rewards
Choose Bree if you:
- Need emergency cash or extra cash without interest charges
- Want cash advances up to $500 at 0% interest rate
- Prefer no monthly fees or annual fees (pay optional tips only)
- Don't want credit checks affecting credit scores
- Need flexible repayment to manage cash flow without penalties
Many Canadian residents successfully use multiple financial products: Neo credit card for earning rewards at Neo partners, KOHO accounts for travel and high interest savings, and Bree for interest-free emergency cash. The best choice depends on your spending patterns, savings goals, and whether you can manage traditional credit cards responsibly.
For most Canadians, starting with KOHO Essential account (free with recurring direct deposit) provides strong budgeting foundations and helps you save money, while adding Neo's no annual fee credit card maximizes cash back at specific select merchants. And when unexpected expenses arise—like car repairs or vet bills—Bree's interest-free advances offer a smarter alternative to expensive overdraft protection or credit card cash advances with punishing interest rates.
Citations
[1] https://www.koho.ca/
[2] https://www.neofinancial.com/
[3] https://milesopedia.com/en/credit-cards/prepaid-mastercard-koho-essential/
[4] https://www.savvynewcanadians.com/neo-financial-vs-koho/
[5] https://hardbacon.ca/en/banking/koho-vs-neo-financial/
[6] https://milliondollarjourney.com/neo-financial-review.htm
[7] https://www.nerdwallet.com/ca/p/best/credit-cards/best-neo-financial-credit-cards
[8] https://www.finder.com/ca/credit-cards/neo-financial-credit-card-review
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