Neo Financial and KOHO are the two most widely used Canadian fintech alternatives to traditional bank accounts. Both offer cashback on everyday spending, high-interest savings, and credit building tools — but they are built around fundamentally different products and suit different types of users.
This comparison covers everything you need to make an informed choice in 2026: cashback rates, savings interest, fees, credit building, foreign transaction fees, and who each platform genuinely suits.
Quick Verdict
- Choose Neo if you want a true credit card, shop regularly at Neo's 10,000+ Canadian partner merchants, or want to maximize cashback on specific purchases
- Choose KOHO if you want a no-credit-check prepaid card, predictable cashback on all spending, higher automatic interest on your balance, or zero foreign transaction fees on a premium plan
- Use both — many Canadians hold both accounts since they serve different purposes and both have no annual fees on their base products
The Core Difference: Credit Card vs Prepaid Card
This is the most important distinction between Neo and KOHO:
Neo Financial offers a true credit card — the Neo Mastercard. You are borrowing money from Neo up to a credit limit and paying it back each month. It requires a credit check and reports to Equifax and TransUnion. Using it responsibly builds your credit score.
KOHO offers a prepaid Visa — you load money onto the card and spend what you have. It functions like a debit card, requires no credit check, and does not affect your credit score in either direction.
This single difference determines which platform is right for you more than any other factor.
Cashback Comparison
| Neo Credit Card | KOHO Prepaid Visa | |
|---|---|---|
| Base cashback rate | 0.5% everywhere | 0.5% (free plan) |
| Grocery cashback | Up to 5% at Neo partners | 1% (Essential+) |
| Partner cashback | Up to 5% at 10,000+ merchants | Up to 5% at select partners |
| Foreign transaction cashback | Standard rate | 0% FX fee on Premium |
Neo's cashback advantage lies entirely in its partner merchant network. If you shop at Neo partners — and with 10,000+ Canadian merchants including major grocery chains, gas stations, and retailers, most Canadians will encounter them regularly — you can earn significantly more than KOHO's base rates.
KOHO's cashback is more predictable. The 1% on groceries, dining, and transportation applies everywhere in those categories, not just at select partners. For Canadians who want consistent earning without checking whether a merchant is in a network, KOHO is simpler.
Savings Interest
| Neo Financial | KOHO | |
|---|---|---|
| Savings interest rate | Up to 2.5% (separate savings account) | Up to 3.5% (on full balance, automatically) |
| Interest on spending balance | 0.1% (Neo Money) | Up to 3.5% (no transfer needed) |
| Minimum balance | None | None |
| How to earn | Must move money to savings account | Automatic on full balance |
KOHO has a meaningful advantage here. KOHO pays up to 3.5% interest on your entire balance automatically — you do not need to move money to a separate account. Neo reduced its savings rate from 4% to 2.5% in May 2025 following Bank of Canada rate adjustments, and requires you to actively transfer money to a separate savings account to earn the higher rate.
For Canadians who want their everyday spending balance to earn interest without thinking about it, KOHO is the simpler and currently higher-yielding option.
Fees
| Neo Credit Card (base) | KOHO (base) | |
|---|---|---|
| Annual fee | None | None |
| Monthly fee | None | None (waived with direct deposit) |
| Foreign transaction fee | 2.5% | 0% on Everything plan, 1.5% on base |
| NSF / overdraft fee | None | None |
| ATM withdrawal fee | N/A (credit card) | $0 in-network, varies out-of-network |
Both platforms have no-fee base tiers. KOHO's monthly fee on paid plans is waived if you set up a direct deposit, making the premium tier effectively free for many users.
KOHO has a significant advantage on foreign transaction fees for frequent travellers — the Everything plan includes 0% foreign transaction fees, while Neo charges the standard 2.5% on international purchases.
Credit Building
| Neo Financial | KOHO | |
|---|---|---|
| Credit check required | Yes (for credit card) | No |
| Reports to credit bureaus | Yes (Equifax + TransUnion) | Optional ($7–$10/month add-on) |
| Secured card option | Yes — Neo Secured Mastercard | No |
| Best for | Building credit with regular card use | Building credit without a credit card |
Neo is the stronger platform for credit building if you can qualify. The Neo Credit Card reports to both Equifax and TransUnion with every on-time payment. The Neo Secured Mastercard allows Canadians with no credit history or poor credit to build credit with a security deposit — no hard credit check required.
KOHO's credit building is an optional paid add-on. For $7–$10 per month (depending on your plan), KOHO reports positive payment history to Equifax on your behalf. This is a good option for Canadians who want to build credit without taking on any debt.
For newcomers to Canada or anyone who needs to establish a credit file from scratch, Neo's Secured Mastercard is one of the most accessible tools available.
Products Beyond the Card
| Product | Neo Financial | KOHO |
|---|---|---|
| High-interest savings | Yes (2.5%) | Yes (up to 3.5%) |
| Investing / robo-advisor | Yes (Neo Invest) | No |
| Mortgage | Yes (Neo Mortgage) | No |
| Cash advance / Instant Pay | No | Yes (up to $250, Cover add-on) |
| RoundUps | No | Yes |
| Financial coaching | No | Yes (on premium plans) |
Neo offers a broader financial product suite — you can open a savings account, invest through a robo-advisor, and even get a mortgage through Neo. KOHO is more focused on everyday spending tools, with RoundUps for passive saving, a cash advance feature (KOHO Cover), and financial coaching on premium plans.
Who Should Choose Neo Financial?
Neo is the better choice for:
- Canadians who want a true credit card with cashback and the ability to build credit
- Regular shoppers at Neo partner merchants — grocery chains, gas stations, and major retailers where 5%+ cashback applies automatically
- Anyone building credit from scratch — the Neo Secured Mastercard is one of Canada's most accessible credit-building tools
- Canadians who want a full financial suite — savings, investing, and mortgage in one platform
- Anyone who wants a higher cashback ceiling on specific partner purchases
Who Should Choose KOHO?
KOHO is the better choice for:
- Canadians with no credit history or poor credit who want a spending card without a credit check
- Anyone who wants predictable cashback on all spending rather than partner-dependent rates
- Frequent travellers who want zero foreign transaction fees (Everything plan)
- Canadians who want interest on their everyday balance without transferring to a separate savings account
- Anyone who wants RoundUps for passive savings or KOHO Cover for occasional cash advances
- Newcomers to Canada who need a card immediately without a credit history
The Dual-Account Strategy
Many Canadians use both Neo and KOHO simultaneously — and it costs nothing to do so since both base products are free:
- Neo Credit Card for purchases at Neo partner merchants to maximize cashback (5%+)
- KOHO for everyday non-partner spending, travel (no FX fees), and keeping savings earning 3.5% automatically
This approach captures the best of both platforms without any ongoing cost.
Summary
| Neo Financial | KOHO | |
|---|---|---|
| Card type | Credit card (true credit) | Prepaid Visa |
| Credit check | Yes | No |
| Base cashback | 0.5% | 0.5% (free) / 1–2% (paid) |
| Partner cashback | Up to 5% at 10,000+ merchants | Up to 5% at select partners |
| Savings rate | 2.5% (separate account) | Up to 3.5% (automatic) |
| Foreign transaction fee | 2.5% | 0% on Everything plan |
| Credit building | Yes (reports automatically) | Optional paid add-on |
| Secured card | Yes | No |
| Annual fee | None (base) | None (base) |
| Sign-up bonus | Up to $35 with code E6B8C9Y7 | $40 with code KOHOBONUS40 |
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