neon is an offering from a startup from Zürich with a proper Swiss bank in the background.

Solid foundation: Hypothekarbank Lenzburg

Different than Revolut and some fin tech “bank accounts”, neon is a thin layer on top of a proper bank. neon, the start-up, only builds the app you use to access your bank account, while the actual bank account is with a quite traditional bank from Lenzburg, a small city in the Canton of Aargau.

“Hypi” Lenzburg as the locals call it, was started in 1868. These 150+ years of existence should provide you some important trust that your money will not just be safe, but also accessible. In case something goes wrong with the app builders neon, you will have to deal with the bank from Lenzburg to get your money out. This is much better than with Revolut. Until recently, Revolut was not a bank at all (in spite of their slumbering bank license) and even nowadays, you probably can’t trust Revolut with tons of money. Their reputation for randomly freezing up accounts for various partially legitimate reasons is just too persistent. People would be locked out of their Revolut accounts for months sometimes.

Generally, you have to be careful to not put all your money into one basket, unless you have so little that the overhead would be too much to have multiple accounts. If you are a student and have only 5’000 in your bank account, it probably makes no sense to have multiple accounts.

While I obviously can’t speak from decades of personal experience, Hypothekarbank Lenzburg has a great reputation. And Swiss banks generally will not randomly lock you out of your account asking for documents and tax declarations before they give you back the access to your money.

Eat more fondue with neon than with a traditional bank account

The first thing: neon has no monthly account fees. With most Swiss banks, you tend to pay 5 CHF per month for the account unless you keep a larger sum of money there and often you will also need to invest through the bank’s not so attractive funds.

Sure, you may say that this is OK for you. But keep in mind that it this will waste quite some of your money either way: Be it the monthly account fees or the mediocre funds and other obscure investment products that many Swiss banks offer which tend to give you unattractive returns and have many hidden fees.

But the best thing: The big banks have many other fees, e.g. on foreign credit card transactions. While the 5 CHF per month may add up to only 60 CHF per year, a credit card often costs you another 100 CHF per year on top of that and then there are foreign transaction fees of typically 2.5% on top of the real market rate. Assuming that you spend just the equivalent of 5’000 CHF per year in foreign currency (depending on your lifestyle, it may be much more), this is another 125 CHF per year in fees.

In short: Don’t do it. A typical, traditional Swiss bank will easily charge you around 300 CHF per year in fees alone for just your plain savings account and card. A depot for stocks and ETFs would cost you much more on top of that. With the 300 CHF for your savings account and card, you can easily go for dinner with your partner three times in Zürich in a decent restaurant. What would you rather have: go three more times for a delicious fondue in Zürich “for free” or instead pay those traditional banking fees and get lousy apps and terrible e-banking? For me personally, the decision is clear.

No foreign transaction fees on the neon card

Similar to Revolut and some modern offerings, there are no foreign transaction fees on the neon card. They give you the proper market exchange rate with no surcharge. So you don’t have to worry anymore about which card to use based on the currency and using multiple cards just for different currencies. There may be good reasons to have two or three cards, but foreign currency fees should not be one.

A proper native app, not the dinosaur e-banking

I really hate most of the e-banking web interfaces of the banks. It’s just really really bad. And I also know why: Banks tend to have some rules that apply not only to their backend but also frontend development which make it practically impossible to build a good e-banking UI. It makes absolute sense to have conservative people working on your core banking system and related backend stuff. After all, you want your money to be safe. It makes no sense however to have the same kind of unimaginative people working on your frontend. neon seems to have gotten exactly that right: The startup builds the frontend, the traditional bank builds the backend and core system.

And I really can say I like the neon app. I have tried so many different bank apps, of which a majority is quite bad. 

In the neon app, you can easily do all the things you would typically expect from a banking app: See where your money went, what payments you have scheduled, scanning Swiss payslips (ESR) and of course the new QR code invoices. And send money to your friends immediately if they also use neon.

It further seems to be a proper native app on iOS, not that typical packaged web view nonsense (Ionic etc) which most other banks unfortunately use these days.

Keep track of repetitive payments and subscriptions

The neon app will show you how much you spent at a merchant the last 12 months. So if you have repeated payments, you can easily see how much you spent there in total. That is great if you spend a lot of money on subscriptions of all sorts. Or if maybe you don’t even know how much money you spend on those.

Tag transactions and add a picture attachment

You can also assign tags to each transaction or add a picture (e.g. a receipt). This way you can categorize your transactions a bit, see how much you spend in each category. It can also be nice for your tax declaration: Tag all donations and then at the end of the year you know in a second how much donations you can deduct in your tax returns.

Export your transactions through CSV

My biggest critique of Zak was that they refuse to offer an API or at least a CSV export. It’s unrealistic to have at least one bank account when you live in Switzerland, because you will always need an account in Euro or some other currency. And then you will have at least one depot for stocks/ETFs and probably also a crypto wallet. I wish it was possible to have only one account, but this is completely unrealistic and will never happen. So you need to have an overview over your minimum four accounts. This requires that the accounts will let you export the transactions. Or better yet, offer an API. For whatever reason, Swiss banks don’t want to hand out the API. So you’ll have to be happy when they at least offer a CSV export, where you can manually export them once a month. That’s what neon offers. In the app, you export all transactions of a month or year as CSV and of course also PDF. 

Direct debit (LSV) is supported

Direct debiting in Switzerland is slightly less common that in some other European countries. The SEPA direct debit nowadays is often used for regular payments in the Eurozone, e.g. for your gym, phone contract or even the rent.

In Switzerland, this is also on the rise. Scanning that ESR payslip every month is quite a waste of time.

The process is unfortunately more complex with a Swiss LSV: You have to fill out a traditional paper form where you authorize the creditor to deduct the money from your bank account, send that form to the bank. They stamp it and send it to the creditor. Much more complex than the SEPA direct debit and annoying when change bank accounts, but at least it works and is an improvement over the monthly payslips.

A prepaid card, not a credit card

There is one downside at the moment though: You will often not be able to use the neon card to rent a car. The reason is that the neon card is a “prepaid” card and not a credit card ... and unfortunately also not a debit card. Car rental companies will typically require a credit card and some also accept debit cards. As far as I know, practically no car rental company will accept a debit card though. I am not fully aware of all the reasons behind this, but in practice it means: A prepaid card, recognizable through the lack of a relief printing of the card number on the card itself, will not get you the car on your vacation. So if the card number is totally “flat” on the card itself, use a different card.

Just try neon out now

Signup to neon is quick and easy. The on boarding works through a video call like with most digital offers these days, so you don’t need to go anywhere. The only limitation is that you live in Switzerland. Use the code JEDUEX to get 10 CHF for free added to your account.