KOHO Vs. EQ Bank (The 7 Key Differences)

koho vs eq bank

KOHO and EQ Bank are both top digital banks in Canada. While they both offer smart banking solutions and hybrid accounts at no fee, they have some key differences.

Here are comparative details of the KOHO vs. EQ Bank:

  • EQ Bank’s primary focus is on high-interest savings accounts, which earn an interest of up to 1.25%. On the other hand, KOHO Save customers earn a 1.2% interest.
  • While KOHO’s hybrid account combines a chequing and savings account, EQ Bank focuses on Savings accounts.
  • Unlike KOHO, which has a Visa card, EQ Bank doesn’t offer its customers a debit, prepaid or credit card for ATM withdrawals or making payments.
  • EQ Bank has partnered with TransferWise for international money transfers, whereas, with KOHO, customers can use their accounts or debit cards to transfer cash.
  • Since EQ Bank doesn’t provide any credit or debit cards, customers can’t earn cash back. However, KOHO customers earn 0.5% cash back on all debit card purchases and up to 2% cash back on a premium account.
  • KOHO charges a subscription fee if a customer upgrades to a premium account, whereas all the EQ Bank accounts have no monthly or maintenance fees.
  • While KOHO has financial products such as credit-building, EQ Bank has GICs.

These two banks offer different features to their customers. If you are looking to choose between the two, here are the reasons why you should select KOHO or EQ Bank as your financial partner.

My Recommendation

Both KOHO and EQ Bank provide unique banking services for Canadian customers. I recommend KOHO for customers looking for a bank with no fees, cash back rewards, a hybrid account, and excellent security features.

EQ Bank is more ideal if you are more focused on a savings account with high-interest rates. The accounts have no fees and are more suitable if you want to grow your money.

What to Consider When Choosing Between KOHO and EQ Bank

Before you choose either of these, here are some factors to put into consideration.

  • Interest Rate

Both KOHO and EQ Bank offer interest rates on their accounts. A high APY on a savings account will yield more money. These two financial institutions perform well in this sector. While KOHO has a 1.2% interest on the entire account, EQ Bank accounts earn a higher interest of 1.25%.

  • Security and Regulation

When choosing an online bank, security is a critical component. To trust the bank with your cash, they need to be regulated by the CDIC (Canada Deposit Insurance Corporation). These two are both CDIC-insured; therefore, all your deposits are insured for up to $100,000.

  • Convenience

What’s a digital bank without convenience? You should choose a bank that enables you to conveniently access your funds. Banks like KOHO and EQ have mobile apps that you can install to carry out all banking transactions on the go.

  • Usability

An ideal digital bank should make it easy to use all its products. For instance, unlike most challenger banks, EQ has no debit or credit card; therefore, making it impossible to do ATM withdrawals or shop. Because of this, if you need to travel overseas and need to use a card, EQ may not be ideal. However, they have TransferWise.

  • Costs

Before selecting a bank, you should look at all the costs. Fortunately, both KOHO and EQ don’t charge any monthly account maintenance fees or minimum balance. However, if you go for a KOHO premium account, you’ll have to pay a subscription fee.  

  • Customer Support

Consider whether the customer service is reachable via phone, email, or live chat on the app or website. Since the banks don’t have a physical branch, it’s good if you can contact the staff when you have queries.

  • Account Options

KOHO has three account options, the free one, a joint account, and a premium account. In addition, it has features such as KOHO save, early paycheck, and powerups. On the other side, EQ Bank provides TFSA savings, dollar accounts, and GICs.

Why Should You Choose KOHO

koho bank

Let’s take a look at some of the reasons why you should choose KOHO.

  • Debit Card

KOHO provides a visa card that customers can use to withdraw cash at the ATM and to pay for products and services. The card also comes with rewards such as cash backs. In addition, the company also just introduced KOHO metal cards, which customers can order via the app.

  • Credit Builder

If you don’t have a good credit score, KOHO is the best choice. Customers can rebuild their credit score for only $7 per month. You’ll need to subscribe to the service by having $7 in your spendable account each month to get started.

  • Mobile Application

The KOHO mobile app is one of the highest-rated in Canada, with excellent ratings on the App Store and Google Play. It has one of the best mobile apps with a well-functioning interface. 

New users can sign up for an account via the app in five minutes. Once you get onboarded, you can also access all your accounts and transactions on the go.

  • Premium Benefits

Apart from the free account, KOHO also has a premium account. Although uses have to pay $84 annual or $9/month, there are benefits such as 2% cash back on transportation, groceries, and restaurants.

Why Should You Choose EQ Bank

eq bank

Here are some of the reasons why you should choose EQ Bank.

  • High-Interest Savings Accounts

EQ Bank is the best bank if you want to save your money. They offer competitive interest rates at 1.25% on their Savings Plus, TFSA, and Joint Savings accounts. This rate is more than other digital banks in Canada.

  • Security

EQ Bank is backed by Equitable Bank, which has over 50 years of experience. The bank also has multiple security layers and fraud monitoring features in place.  

In addition, all the deposits are CDIC-insured; therefore, customer money is safe. This, combined with their years of experience, is ideal for customers looking for a bank that provides safety.

  • Financial Services

Apart from the high-interest savings accounts, EQ Bank offers its customers GICs to earn more from investments.

KOHO History

koho bank

KOHO was launched in 2017. This Canada-based Fintech company is not a bank but offers various innovative financial products that help Canadians save money and also improve their financial lives.

KOHO is focused on providing better financial solutions for all of its customers in Canada. With a particular focus on their customer needs, they have partnered with People Trust and Visa to provide debit cards and secure accounts. In addition, the company is supported by top investors among them, Power Group, Drive Capital, and Portag3.

How KOHO Works

You can sign up for a free personal or joint account at no fee. KOHO will only charge you for an account if you are on a premium account. The company has a hybrid account that combines the spending and savings accounts at an interest rate.

To deposit money, KOHO doesn’t accept cash transfers, but you can use either a direct deposit for your paycheck, use an e-Transfer from another bank account, or use your Visa debit card. The KOHO card can be used to withdraw money at the ATM and make payments online or at a merchant since it’s on the Visa network.

Once you use your card to make payments and purchases, you are eligible for cash backs.

Features of KOHO

Once you sign up for a KOHO account, you’ll enjoy the following features.

  • KOHO Full Service Account

KOHO has a hybrid account that earns an interest of 1.2%. The account is divided into three, personal, joint and premium. 

The personal and joint accounts are free to join and have 0.5% cash back on all purchases. You also get extra money at select merchants. The only difference between the two is that you can share finances and savings goals with the joint account.

The premium has a subscription fee of $9 per month, 2% cash back on transactions, and one free international ATM withdrawal each month.

  • KOHO Visa Card

You can use your KOHO Visa card outside Canada for hotel reservations, car rentals, flight booking in places where Visa is accepted. You can use this card to access the global Visa Plus ATM network to withdraw funds. However, keep in mind that KOHO doesn’t have its own ATMs to allow free withdrawal; therefore, you might be charged a $2-3 out-of-network fee.

  • KOHO Metal Cards

If you are already a KOHO user, you can apply for the Metal Card. This card is priced at $159. You can also get the card for $50 plus two referrals. To order one, you need to have the latest version of the app and purchase in-app.

  • KOHO Earn Interest

This product enables customers to earn a 1.2% interest on their account balance. Once you apply for a KOHO card, you can opt for this feature. Each dollar in your account will earn this interest.

  • KOHO Credit Builder

For customers with a poor credit history, there’s an optional service to helps you build your score. KOHO only requires you to have $7 per month in your spending account. As long as you keep this going, KOHO will report to the three major credit bureaus.

  • Partner Power-Ups

KOHO has partnered up with select companies where customers can earn extra cash back once they purchase items such as groceries.

  • Early Paycheck

If you need to be paid early, KOHO makes this possible by providing an early paycheck. With this feature, you can access up to $100 up to 3 days before your payday for free. There’s also the option to select instant access at $5, which also comes with the benefit of a financial coach.

History Of EQ Bank

eq bank

EQ Bank is powered by Canada’s challenger bank, Equitable Bank. Equitable was founded over 50 years ago, and it manages over $37B in assets. Since its establishment, the bank has become the ninth-largest independent Schedule I bank in the country that serves more than a quarter-million Canadians.

With years of experience in providing commercial banking services and diversified personal, Equitable launched EQ Bank in 2016 as one of the first digital banks. Today, EQ has over $6 billion in deposits and provides innovative banking solutions to Canadians.

How Does EQ Bank Work?

This bank is primarily focused on savings accounts and growing the customers’ money. Because of this, it offers several accounts of high interest. All accounts also don’t have any monthly fees or account maintenance charges, making it ideal for individuals who don’t want to incur any costs.

Unlike other banks, EQ does not offer credit and debit cards; therefore, customers don’t incur ATM withdrawal costs or exchange fees. However, they have partnered with TransferWise to allow international money transfers. Because there are no cards, you can’t pair your account with Apple or Google Pay.

However, the bank has a well-functioning app that allows customers to monitor their accounts.

Features of EQ Bank

Let’s examine some of the features of this bank.

  • Savings Plus Account

This account earns a 1.25% interest, which is higher than most banks in Canada. It also doesn’t have any monthly fees or minimum balance. Customers enjoy free bill payments, Interac e-Transfers, electronic fund transfers, and EQ to EQ transfers.

  • Joint Savings Plus Account

This account has the same benefits as the Savings Plus Account, but you can have up to 3 other people. You can deposit a maximum of $500,000 at no fee. All the deposits are also CDIC –insured; hence your money is safe.

  • TFSA Savings Account

The tax-free savings account enables customers to earn interest without paying any extra tax. The interest is at 1.25% at no fee. With this account, you can access the funds at any time without paying any penalties. In addition, you can also link your account to the primary savings account or an external one.

  • RSP Savings Account

This EQ Bank account is ideal for building retirement savings at 1.25%. Customers can link the account with others for automatic transfers. The account also doesn’t have any fees, and the deposits are CDIC-insured.

  • International Money Transfers

EQ Bank enables customers to send and receive money with Wise. You can transfer funds to your family abroad, which is processed within three business days. Through this partnership, customers also get the mid-market exchange rate.

  • US Dollar Account

The bank has a U.S dollar account that earns a 1.00% interest. It has a competitive exchange rate, making it easier to send dollars abroad. You can also use TransferWise for transfers from this account.

  • GICs

There are registered and unregistered GIC options available. You can start investing in GICs with EQ Bank for as little as $100. As long as you have funds in your Savings Plus Account, you can buy GICs in seconds.

  • Mortgage Marketplace

EQ Bank has a Mortgage Marketplace for customers to access over 2,000 mortgage products available in the market. Customers can get and compare the best rates offered by Canadian lenders just by checking the app.

Summary

EQ Bank and KOHO are some of the best challenger banks in Canada. They charge low to no fees on most of their products and have a variety of financial products. If you are looking for a bank that will grow your savings even into retirement, EQ Bank is the best option with the high interest rates.

But if you need a bank with a top-notch mobile app, debit cards that come with cash back rewards and no fees, KOHO is a good choice.

Related Questions

  • Is EQ Bank Safe?

Yes. EQ Bank is backed by Equitable Bank, one of the largest domestic banks in Canada that has been in existence for more than 45 years.

  • Is My Money Safe With KOHO?

Yes, KOHO deposits are CDIC-insured for up to $100,000 per depositor.