While Canada’s big banks continue to dominate the landscape, online banks and fintechs are leading the way with innovative banking products designed to help you take control of your money.

This includes unlimited, free banking, blended spending and high-interest savings accounts, high-interest rates, cash-back rewards, prepaid credit cards, no-fee overdraft protection, and credit-building tools that report to the credit bureaus without you having to borrow money.

If you’re looking to make a change with your banking, fintech’s like KOHO are worth a look. In this KOHO review, I’ll explain how their platform works and cover the key features, pricing, pros and cons, and more.

What Is KOHO?

KOHO is a Toronto-based fintech company that provides Canadians with easy-to-manage and simple financial products. Established in 2017, Koho’s product lineup has expanded to include a credit-building tool, no-fee overdraft protection, a prepaid credit card for spending, a high-interest savings account, and cash back rewards. You can even earn $20 every time you refer a friend to Koho.

Here’s a closer look at the various products Koho offers.

KOHO Plans

KOHO’s flagship product is a spending and savings account that includes a virtual prepaid card (and an option for a physical one), up to 5% cash back, and interest on your account balance. Four plans are available (including a free plan), and your benefits will depend on which KOHO account you choose.

Easy – Free

What’s included:

• 1% cash back on groceries and transportation
• Earn 0.5% interest on your balance
• No monthly fees
• Unlimited e-Transfers
• CDIC coverage up to $100,000

Summary: If you’re looking for a free spending account offering cash back and a modest amount of interest, KOHO’s Easy plan is your best bet. You won’t pay any monthly fees, but you get the convenience of having all of your money in the same place. You have access to a prepaid Mastercard and free e-transfers. The plan is suitable for people who keep a smaller balance in their account.

Essential – $4/month

What’s included:

• 1% cash back on groceries, eating & drinking, and transportation
• 0.25% cash back on all other purchases
• Earn 4.5% interest on your first $500 balance, 2% on anything after that
• Unlimited free e-Transfers
• Up to 5% cash back at selected merchants
• Optional credit building for $7/month ($3 discount)
• CDIC coverage up to $100,000

Summary: If you spend a significant amount of money on dining out and you maintain at least $500 in your account at all times, it may be worthwhile to upgrade to the Essential plan for $4/month. In addition to the additional cash back rewards, you’ll earn 4.5% interest on your first $500.

Extra – $9/month

What’s included:

• 2% cash back on groceries, eating & drinking, and transportation
• 0.5% interest on all other purchases
• 4.5% interest on your first $1000 balance, and 3% on anything after that
• Unlimited e-Transfers
• No FX fees
• Up to 6% extra cash back at selected merchants
• Optional credit building for $7/month ($3 discount)
• CDIC coverage up to $100,000

Summary: KOHO’s Extra plan doubles the cash back earning rate to 2% for groceries, dining out, and transportation. You also earn 4.5% interest on the first $1000 balance in your account. The Extra plan waives foreign exchange fees if you’re using the account outside of Canada, and you have the potential to earn up to 6% extra cash back at selected merchants.

Everything – $19/month

What’s included:

• 2% cash back on groceries and transportation
• 0.5% interest on all other purchases
• Earn 4.5% interest on your entire balance
• Unlimited real-time e-Transfers
• No FX fees
• Up to 6% extra cash back at selected merchants
• Optional credit building for $5/month ($5 discount)
• CDIC coverage up to $100,000

Summary: The Everything plan is KOHO’s unlimited plan, which maximizes your cash back rewards and interest-earning potential. In fact, you’ll earn 4.5% on your entire balance in the Everything Plan. You can also access unlimited real-time e-transfers and a $5 monthly discount on KOHO’s credit building service if you sign up for it.

KOHO Credit Building

One of the key features of KOHO is its credit-building program, which helps you improve your credit score. According to KOHO, its users see an average credit score increase of 22 points after only three months of using their credit-building tool.

There is an additional monthly fee for Credit Building, and you have two options to choose from. First is a KOHO line of credit that is used solely for the purpose of credit-building. You open a line of credit, and KOHO sets the funds aside on your behalf. You then make on-time monthly payments, and KOHO reports them to the credit bureau (Equifax).

You can also choose a secured line of credit, using between $30 and $500 of your own money to fund the line of credit. You then withdraw what you need, and KOHO collects what you owe at the end of each month. All monthly payments are reported to the credit bureau.

KOHO Prepaid Mastercard

The KOHO prepaid card is a physical Mastercard that offers unique benefits and helps you manage your spending effectively. With it, you can pay for everyday purchases and even earn cash back on selected transactions. Plus, it’s easy to load money onto your card through the KOHO app or by setting up direct deposit.

KOHO Virtual Card

The KOHO virtual card extends your physical KOHO card, allowing you to make secure online purchases without exposing your actual card details. Available through the KOHO app, this virtual card gives you an extra layer of security when shopping online. The virtual card works with Apple, Samsung, or Google Pay.

KOHO Cover

If you’re willing to spend $5 per month, you can access $50 of overdraft protection with no interest charges. If you make on-time repayments, you may be able to get additional coverage. Note that KOHO’s overdraft feature does not impact your credit score.

KOHO Referrals

KOHO has a generous referral program you can use to earn some extra cash. Every time you refer a friend to KOHO, and they make a purchase within 30 days of signing up, KOHO will pay you and your friend $20.

All you need to do is find your referral code in the app and text or email it to your friend. It’s a good reason to spread the word about KOHO.

KOHO Pros and Cons

If you’re comfortable using a digital banking platform as opposed to a traditional financial institution, KOHO has a lot to offer. That said, it’s not for everyone. Here’s my list of KOHO pros and cons.

Pros

• Cashback Rewards: You can enjoy up to 2% cash back on groceries and transportation and even up to 6% extra cash back when you shop with certain KOHO partners.
• Attractive Savings Interest Rates: Currently, you can earn up to 4.5% interest on your account balance, depending on the plan you choose.
• Free banking option: Easy, KOHO’s entry-level spending account, is free of charge.
• The virtual card is very convenient: KOHO’s virtual prepaid card means you don’t have to carry around an extra piece of plastic, which could be lost or stolen. And the card works with Apple, Samsung, and Google Pay.

Cons:

• Not a full-fledged credit card: Though Koho offers several benefits, it is primarily a prepaid card, which may not fit the bill if you’re seeking a credit card with a significant credit limit.
• Credit-Building program is expensive: You must pay extra for KOHO’s credit-building program, which is quite expensive at up to $10/month.
• Fewer financial products: KOHO has a limited range of products and services compared to other fintechs and online banks, like EQ Bank and Tangerine.

Is Koho Safe?

Your banking experience with KOHO is secure and reliable. When you open a regular bank account with KOHO, you can rely on the same security measures traditional banks employ, like biometric authentication, strong encryption, and transaction monitoring.

In addition, KOHO partners with established financial institutions to ensure the funds in your bank account, including joint accounts, are held safely and securely. Like most banks, your deposits are protected by CDIC up to $100,000 per registration.

The Bottom Line on KOHO

My biggest issue with KOHO is that to unlock its best features, including the 4.5% interest rate and maximum cash back rewards, you have to pay $19 a month for the Everything plan. That’s almost $240 yearly, or double the annual fee of many premium cash back rewards credit cards, most of which come with additional perks.

And when you compare the KOHO spending account to offerings from top online banks, it falls short of the mark. For example, EQ Bank currently pays 3% interest on its Savings Plus account, which includes unlimited transactions and e-transfers. The account has no fees. To get a better interest rate on your entire account balance with KOHO, it will cost you $19/month.

The bottom line? If you have well-established credit and are looking for free, unlimited banking while earning a higher interest rate, I would bypass KOHO and sign up with EQ Bank, Tangerine, or even Simplii, all of which have much more to offer.

If you feel like you can benefit from KOHO’s credit-building products and don’t plan to carry a large balance in your spending account, then KOHO’s Easy plan, which is free, could be a suitable option.

FAQs

What are the benefits of using KOHO for credit building?

KOHO’s credit-building tools can help boost your score, but you will need more than one credit product to establish a strong credit history. Consider KOHO Credit Building one piece of the puzzle. Also, keep in mind the cost. At $10/month (or discounted through a KOHO plan), it’s an expensive way to build credit. If you can qualify for a standard credit card elsewhere and use it responsibly, it may be the better option.

How do I access the KOHO line of credit?

To access the KOHO line of credit, you must create an account with them. Once you have an account, you can download the KOHO mobile app and sign up for the line of credit product. There is an additional cost for KOHO’s credit-building tools.

Are there any fees associated with using the KOHO card?

KOHO does not charge any transaction fees for using the KOHO card. certain transactions, like withdrawing cash from an ATM, may incur nominal fees depending on the location or financial institution.

How can I contact KOHO customer service?

You can contact their customer support through the KOHO app, as they provide an integrated chat feature to help you resolve your issues. Alternatively, you can visit their website and access the support section, where you’ll find an extensive range of FAQs and guides.

If you prefer to speak with a customer service representative, KOHO provides an email address and phone number on their website for your convenience.