The rise of neobanks in India has transformed the way people manage their money. With zero-balance accounts, no physical branches, and AI-powered expense tracking, platforms like Niyo and Fi have gained immense popularity. However, beneath their flashy marketing and "no hidden fees" claims, many users report being charged for services they never expected.

So, which neobank is guiltier of sneaky charges—Niyo or Fi? This article dives deep into their fee structures, revealing hidden costs that could be draining your account without you even realizing it.

Understanding the Neobank Model

Traditional banks rely on loans and service fees to generate revenue. Neobanks, on the other hand, primarily make money through partnerships with licensed banks and financial institutions. They often lure customers with attractive zero-fee accounts, only to later introduce fees on specific services such as international transactions, ATM withdrawals, and forex markups.

Niyo: A Closer Look at Hidden Fees

Niyo operates in partnership with banks like DCB Bank and Equitas Small Finance Bank. It markets itself as a travel-friendly neobank, offering forex cards and global banking solutions. However, some users have reported unexpected charges, including:

1. High Forex Markup – While Niyo promotes itself as a zero forex markup service, some users have experienced inflated exchange rates. This can add an extra 1-3% cost to international transactions.
2. ATM Withdrawal Fees – Certain Niyo accounts impose fees on ATM withdrawals beyond a limit, even in India. International ATM withdrawals attract hefty charges.
3. Dormancy Fees – If an account remains inactive for a certain period, Niyo may apply dormancy charges, which can eat into your balance without any notification.
4. Service Charge for Replacements – Lost your debit card? Getting a replacement might cost you more than what was initially advertised.
5. Cash Deposit Fees – While online transactions are free, depositing cash through partnered banks can incur hidden service charges.

Fi: Where Do They Make Money Off You?

Fi is a neobank backed by Federal Bank, known for its smart savings tools and rewards-based spending insights. However, it isn't free from sneaky charges either:

1. Premium Account Upgrades – Fi offers a free account but pushes users towards premium features. Some users find themselves automatically upgraded and billed.
2. Payment Gateway Fees – Transactions through certain third-party services may incur additional charges, which aren’t always disclosed upfront.
3. Non-Maintenance Penalty – Despite marketing itself as a zero-balance account, some users claim to have been charged penalties for inactive accounts.
4. Forex and International Usage Fees – While Fi provides better forex rates than some traditional banks, hidden conversion charges and extra fees still apply in certain transactions.
5. Hidden Subscription Charges – Some promotional services initially offered for free later turn into paid subscriptions without explicit user consent.

User Complaints and Hidden Fees Comparison

From this comparison, both neobanks have their share of undisclosed fees. Niyo seems to charge more for ATM withdrawals and forex transactions, while Fi is guilty of pushing premium accounts and hidden payment fees.

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How to Avoid Getting Charged Unexpectedly

1. Read the Fine Print – Always go through the terms and conditions before signing up for a neobank account.
2. Track Your Statements – Regularly check your bank statements to catch unexpected deductions.
3. Avoid International Transactions If Possible – Forex fees and conversion charges can be higher than what’s advertised.
4. Use Customer Support Proactively – If you spot an unjustified fee, contact support immediately to get it waived or disputed.
5. Be Careful with Upgrades and Subscriptions – Always confirm whether an offer is truly free or if it transitions into a paid service.

Verdict: Who’s Worse?

There’s no clear winner (or rather, loser) between Niyo and Fi in terms of hidden fees—both have their own ways of squeezing extra money from users. If you travel frequently and rely on forex transactions, Niyo’s hidden forex markups could hurt you more. On the other hand, if you use digital services and payment gateways often, Fi’s unexpected payment processing fees could be an issue.

At the end of the day, no neobank is truly free—so always be vigilant and aware of where your money is going!

Disclaimer:

The information in this article is based on user reports, publicly available data, and our own analysis. Fees and policies are subject to change, and individual experiences may vary. This article is not intended as financial advice. Always verify terms with the respective bank before making financial decisions.