In today’s economic climate, finding a high-interest savings account is more important than ever. Traditional banks often offer minimal interest rates, making it difficult to grow your savings. Neo Financial, a Canadian fintech company, aims to change that with its suite of financial products, including the Neo High-Interest Savings Account (HISA) and the Neo Money Account.
This Neo Financial High-Interest Savings Account Review will delve into the features, benefits, and drawbacks of this account, along with how it compares to other high-interest savings accounts in Canada.
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Neo Financial: Building a Financial Ecosystem
Founded in 2019, Neo Financial is a growing fintech company offering a variety of financial products designed to meet the needs of modern Canadians. Their product portfolio includes:
- Neo Card: A cash-back credit card with rewards programs.
- Neo Money Account (formerly Neo Savings Account): A hybrid chequing and savings account with a competitive interest rate and a prepaid Mastercard.
- Neo High-Interest Savings Account (HISA): A dedicated savings account offering a high interest rate on your deposits.
Neo High-Interest Savings Account: Competitive Rates and Easy Access
The Neo High-Interest Savings Account stands out for its attractive interest rate. As of April 24, 2024, Neo offers a 4.00% non-promotional interest rate, significantly higher than the rates offered by most traditional banks. Interest is calculated daily on your closing balance and paid out monthly.
Here are some of the key features of the Neo High-Interest Savings Account:
- High-Interest Rate: Earn 4.00% interest on your entire balance, significantly higher than most traditional savings accounts.
- No Monthly Fees: There are no monthly account fees associated with the Neo HISA, making it a cost-effective way to save money.
- Unlimited Free Transactions: You can easily transfer funds in and out of your account without incurring any transaction fees.
- Minimum Balance: There is no minimum balance required to open or maintain a Neo HISA, making it accessible to everyone.
- CDIC Insured: Your funds in the Neo HISA are held by Concentra Bank, a CDIC member institution, and are insured up to $100,000 per depositor.
Neo Money Account: A Hybrid Option with Cash Back
While the Neo HISA focuses solely on maximizing interest earned on your savings, the Neo Money Account offers a unique blend of features:
- Competitive Interest Rate: Although lower than the HISA, the Neo Money Account offers a still-competitive 2.25% interest rate on your balance.
- Free Transactions: Similar to a chequing account, you can enjoy free bill payments, Interac e-transfers, and fund transfers.
- No Minimum Balance: There’s no minimum balance requirement to benefit from the interest rate or avoid fees.
- Free Prepaid Mastercard: The Neo Money Account comes with a free prepaid Mastercard for online and in-store purchases.
- Cash Back Rewards: Earn cash back on purchases at thousands of partner stores with the Neo Money Card.
- $20 Welcome Bonus: Get a $20 cash bonus when you deposit $50 or more and complete your first purchase.
However, the Neo Money Account also comes with some limitations:
- Not a Full Bank Replacement: It doesn’t offer features like paper cheques or mobile cheque deposits.
- No Free ATM Withdrawals: While you can use the Neo Money Card for purchases, ATM withdrawals incur fees.
Neo Financial vs. The Competition: How Does it Stack Up?
With several fintech companies offering high-interest savings accounts, it’s important to compare options before making a decision. Here’s how Neo Financial compares to two of its leading competitors in Canada:
Neo Financial High-Interest Savings Account vs. EQ Bank Savings Plus Account
Both Neo HISA and EQ Bank Savings Plus Account offer a 4.00% interest rate, making them the top contenders in the high-interest savings account market. Here’s a breakdown of their key features:
| Feature | Neo Financial HISA | EQ Bank Savings Plus Account |
|---|---|---|
| Interest Rate | 4.00% | Up to 4.00% |
| Monthly Fee | $0 | $0 |
| Free Transactions | Unlimited | Unlimited |
| Minimum Balance | $0 | $0 |
| Debit Card | No | Yes (EQ Bank Card) |
| CDIC Insured | Yes | Yes |
Both accounts offer similar interest rates and no monthly fees.