The interest rate for the Neo Savings account will change from 1.55% to 1.30% starting May 17, 2021 | Neo Financial | Discussion forum

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The interest rate for the Neo Savings account will change from 1.55% to 1.30% starting May 17, 2021
May 13, 2021
1:23 pm
Alexandre
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That just came in email from Neo Financial.

The interest rate for the Neo Savings account will change from 1.55% to 1.30% starting May 17, 2021.

May 13, 2021
3:32 pm
KamWest
Toronto
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Crap, I was just checking this one out this morning thinking it could be a good alternative if CT Financial goes down.

Only choice for me if CT goes down from 1.55 now is saven financial.

May 13, 2021
3:39 pm
AltaRed
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I think you are mostly re-arranging deck chairs on the Titanic if you think any fintech is going to offer outsized rates for long.

May 13, 2021
6:20 pm
LK
British Columbia, Canada
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AltaRed said
I think you are mostly re-arranging deck chairs on the Titanic if you think any fintech is going to offer outsized rates for long.  

It's not the fintech (Neo) offering / providing the rates, it is Concentra Bank.

May 13, 2021
6:54 pm
AltaRed
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I did say any fintech but now that you specifically mention Concentra Bank, does it have any brick and mortar branches?

If not, Concentra = digital/online bank = fintech just like a dozen others.

May 13, 2021
10:57 pm
LK
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AltaRed said
I did say any fintech but now that you specifically mention Concentra Bank, does it have any brick and mortar branches?

If not, Concentra = digital/online bank = fintech just like a dozen others.  

From Concentra Bank's website: "Concentra Bank, a Schedule I bank organized under the laws of Canada, with its registered office located in Saskatoon, Saskatchewan, and its wholly owned subsidiary, Concentra Trust, a federal trust company organized under the laws of Canada, with its registered office located in Saskatoon, Saskatchewan".
https://www.concentra.ca/Pages/view2.aspx?gp=About%20Us&sub=Legal&own=225

Does bricks and mortar matter when it is a Schedule I bank under federal laws? A fintech is not a bank (Schedule I bank), not a financial institution, etc. It provides the technology / app to support the bank / FI. The rates related to the "Neo Savings Account" are offered/provided by Concentra Bank, which is a federally regulated bank. Neo is not a bank nor an FI, and cannot offer anything but an app to enable a customer to access their Concentra account.

Banks are subject to various legal requirements that fintechs are not subject to currently. Federally regulated banks, for example, have oversight by the FCAC:
https://www.canada.ca/en/financial-consumer-agency/corporate/mandate.html and https://www.canada.ca/en/financial-consumer-agency/corporate/who-we-regulate.html

As an example of the role that the FCAC has in relation to "banks": https://www.canada.ca/en/financial-consumer-agency/services/industry/commissioner-decisions/decision-138.html

May 14, 2021
9:30 am
AltaRed
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You have missed the point being made. However, if it makes you happy, substitute "online digital bank" for the word "fintech" and my comments stand. IF you think ANY "digital online bank" can offer outsized rates for long, you are going to be disappointed, as noted by the exasperation expressed in numerous comments in a number of threads.

Regardless, I still consider any retail online financial business as a fintech. They can be gone tomorrow when the parent can easily pull the plug. Desmarais did with Zag Bank as one example.

People are chasing 25-50 bp on the premise they may be 'real' outsized value for an extended period of time when it simply is not in the interest of shareholders (publicly traded or private) to do so. No one providing capital to back these entities is going to give up profit for long when it is not necessary to do so.

There are some whose business model does allow them to offer 10-25bp or so more than group average. FIs like CT Bank that use deposits to fund the float in their credit card business, or a BBB rated EQ Bank or LBC Digital, or an Oaken that use online retail deposits to fund parent company specific targeted mortgage business. Those business models likely can stand the test of time.

May 14, 2021
11:57 am
Bill
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I agree that Neo's a bit confusing because it's an outlier on this site, it (unlike Concentra and the other fi's on this site) does other things (e.g. skipthedishes) aside from banking stuff, seems to be a platform open to various things with underlying "partners". Under the Neo Profile here it shows a head office in Calgary, it might help if "Parent Company" shows the legal name, i.e. Neo Financial Technologies Inc (even though "parent" is not really the right term here).

May 14, 2021
2:39 pm
Norman1
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I don't think there's any takeout food with the savings account and MasterCard.

Those SkipTheDishes founders left sometime after it was acquired in 2016. They then started Neo Financial.

Neo is more of a financial services retailer. Neo offers a rebranded savings account from Concentra and a rebranded MasterCard from ATB Financial.

May 14, 2021
6:13 pm
Bill
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You're right, Neo is just operating in the financial services sector. On its site it describes itself as "a technology company that’s building a better financial experience for all Canadians."

May 14, 2021
11:55 pm
Adam1
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I think it's great that they're at least giving advance notice of a rate change. EQ and Meridian do this as well, but most other banks don't. EQ in particular gave a 30+ day notice for its TFSA rate change, which they didn't have to do, but they were nice enough to.

Adam

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