KOHO and Tangerine are both popular for their financial products with no monthly fees or minimum balance. As two of the top digital banks in Canada, how do they differ?
Here are comparative details of the KOHO vs. Tangerine:
- While Tangerine has a separate chequing and savings account, KOHO has a hybrid account with a mix of chequing and savings features.
- KOHO customers earn 0.5% cash back on all debit card purchases and 2% cash back only on a premium account. On the other hand, with Tangerine, customers earn a 2% cashback and an extra 10% on up to $1,000 of their everyday purchases in the first two months of using the two credit cards.
- KOHO Save earns a 1.2% interest, whereas Tangerine savings accounts accrue interest at 0.01%
- Since KOHO doesn’t have its own ATM network for free withdrawals, customers are charged $2-3 for transactions. On the other hand, Tangerine customers have free access to over 3,500 ABMs across the Scotiabank network.
- Signing up for a regular KOHO account is free; you’ll only pay for a subscription if you upgrade to a premium one. With Tangerine, the chequing and savings accounts have no monthly fees.
- KOHO has credit-building features, unlike its counterpart, Tangerine.
These two digital banks have features that are tailored to the customer, but it’s also evident that they are also very different. Here are the reasons why you should choose KOHO or Tangerine.
While KOHO and Tangerine have overlapping features that define a modern-day digital bank, each one of them is unique. I recommend KOHO for customers that prefer a hybrid account with no fees and a high-interest rate.
On the other hand, Tangerine is an excellent option for a digital bank with no fees, competitive interest rates, and high-quality financial services and products. It’s a perfect mix of traditional and digital banking systems.
What to Consider When Choosing Between KOHO and Tangerine
Choosing a bank that will serve your financial needs is very critical. Here are some of the things you should consider before selecting between these two banks.
- Financial Products
With KOHO, you can open a hybrid account, access credit builder services, and apply for an early paycheck. On the other side, Tangerine has a chequing and savings account, credit cards, business accounts, GICs, investment funds, mortgages, TFSAs, and RSPs.
Before choosing a bank, you should consider the costs. Luckily both KOHO and Tangerine don’t charge any monthly account fees. You’ll only be required to pay for the account if you subscribe to the KOHO premium option.
- Interest Rate
The annual percentage rate (APY) also matters, especially for savings accounts. KOHO earns a relatively high interest for the hybrid chequing and savings account at 1.2%, while Tangerine is at 0.10% on both accounts. If your goal is to grow your finances, consider which account has the best rates.
- Mobile App Functionality
Since they are both digital banks, the mobile apps should be functional. Check customer reviews on Google Play and App Store to get an idea of how efficient the apps are. A good app should enable customers to access all the products and functions of the bank on the go.
Is my money safe? This is one of the considerations you should have before choosing a bank for your funds. Both Tangerine and KOHO are members of the Canada Deposit Insurance Corporation (CDIC), which means that the deposits are insured up to $100,000.
- Customer Support
Both KOHO and Tangerine have customer service channels via phone, email, and live chat. In case of any queries, customers can contact the team.
Why You Should Choose KOHO
Here are the reasons why you should bank with KOHO.
- High-Interest Rate
KOHO offers a hybrid account with a 1.2% interest rate on the entire account. This is among the highest interest rate on a savings account among the top banks in Canada. If you are saving up some cash, you can grow your savings much faster.
- Credit Builder Feature
KOHO lets you rebuild your credit score for only $7 per month. If your credit score is poor, you’ll just need to subscribe to this feature by ensuring that there’s $7 in your spendable account each month.
- Mobile Application
As a digital bank, KOHO has one of the best mobile apps. The banking application gives you access to all your accounts, and you can easily track all your transactions from anywhere.
Why You Should Choose Tangerine
Combining the best of traditional banking and the digital features, here are the benefits of Tangerine.
- Variety of Financial Products
Tangerine is a digital bank but with a wide array of banking services and products. Apart from the typical chequing and savings accounts, Tangerine also has credit cards, tax-free savings accounts, GICs, mortgages, business accounts, and investment funds. You access more features than other digital banks.
- Credit Cards
The Tangerine Money-Back Credit Card and World Mastercard offer cash back rewards of 2%. What’s more, the cards have no annual fees.
- Investment Options
Tangerine helps its customers to build their future by providing investment options. They have core portfolios and global ETF portfolios that customers can sign up for and grow their money.
KOHO is a Canada-based Fintech company launched in 2017. While it is not a bank, this company offers a variety of innovative financial products to help Canadians build their financial lives and save money.
The company’s belief is rooted in providing better financial solutions for all Canadians. They offer secure accounts and debit cards via a partnership with Visa and People Trust. They are also backed by established investors like Drive Capital, Power Group, and Portag3.
How KOHO Works
KOHO does not charge any fees unless you are on a premium account. They provide cash backs on the debit cards and an interest rate on the hybrid account.
To add funds into your KOHO account, you can either use an e-Transfer from your other bank account, use direct deposit for your paycheck, or load via an existing Visa debit card. When paying bills or making transactions, you can use your KOHO card in person or online like any other credit or debit card.
You can also pay with a KOHO card when purchasing items at the merchants because it runs on the Visa network.
Features of KOHO
Even though KOHO is not a bank, it has the following key features.
- KOHO Earn Interest
This latest addition to the KOHO products enables customers to earn a 1.2% interest on their account balance, both spending and savings accounts. If you have a KOHO card, you can opt to use this feature, and every dollar in your account will earn this interest. Your funds are CDIC-member financial institution up to $100,000 per depositor.
- KOHO Visa Card
This visa card comes with tons of benefits. Once you get one, you get 0.05% cash back on all purchases, no account fees, roundups, and access to joint accounts. If you upgrade to a premium card, you get 2% cash back on transportation, groceries, restaurants, financial coaching, and one free international ATM withdrawal per month.
The company also just introduced KOHO metal cards.
- KOHO Credit Builder
This is an optional service that helps you build your credit history. With only $7 per month, you can subscribe to this service and ensure that your spending account has this amount every month. KOHO also sends your reports to the three major credit bureaus.
- Early Payroll
Like most digital banks, KOHO offers customers an early paycheck if they need your cash earlier. You can access up to $100 up to 3 days before your paycheque for free. However, you can also choose instant access at $5, which also comes with a financial coach.
- Partner Power-Ups
If you purchase items such as groceries from KOHO select partners, you can earn extra cash back.
History of Tangerine
Tangerine is one of the most popular online banks in Canada and a subsidiary of Scotiabank. This bank was launched in April 1997 as ING DIRECT. In November 2012, ING Bank of Canada was acquired by Scotiabank, and the bank changed its name to Tangerine.
The bank’s mission was to offer an alternative to traditional banking by providing safe, secure, and innovative banking systems.
Today, Tangerine is one of the leading banks in Canada, which offers a simplified and innovative way of banking. They don’t charge exorbitant fees like traditional banks and offer products that meet the needs of today’s consumers.
How Tangerine Works
Tangerine is a digital bank that offers full services of a typical bank. Apart from accounts, they provide more financial products for people who would like to invest or take mortgages. They also have competitive mortgage rates and high-interest savings.
These Tangerine bank accounts work like any other bank account, but they don’t have any physical branches. Once you sign up for an account, you’ll receive a debit card to pay for purchases in-store and online.
The bank also has a mobile app that you can use to monitor your transactions and fund your account.
Features of Tangerine Bank
Tangerine Bank comes with the following features.
- Chequing Account
The no-fee chequing account earns a 0.10% interest. There are no fees for daily transactions, and customers can enjoy free Interac e-Transfer transactions. Once you sign up for this account, you also have access to 3,500 ABMs and a network of Scotiabank ATMs across the globe.
- Savings Account
If you are more into savings, the Tangerine free savings account pays 0.10% interest. It is also available for TFSA, RRSP, and RRIF plans.
- Credit Cards
The Tangerine credit cards; Tangerine Money-Back Credit Card and World Mastercard have cash back rewards of 2%. Customers can earn Money-Back Rewards on all everyday purchases. In addition, the cards have no annual fees making them ideal for paying bills and making purchases.
- Investment Funds
Tangerine is ideal for people who want to invest. Some of the funds available are the non-Registered Investment Fund, Tax-Free Investment Fund, RSP Investment Fund, and RIF Investment Fund.
If you want a mortgage, Tangerine offers a great rate and flexible payment options. They have a dedicated account manager to guide you through the best alternatives.
KOHO and Tangerine are excellent choices if you are looking for a digital bank. They have beneficial features and low fees.
On top of that, they have well-functioning mobile apps that enable customers to access their accounts from anywhere. KOHO is ideal if you prefer a hybrid account with no fees.
But if you need a bank with more financial products, Tangerine is a good alternative.
- Is KOHO Trustworthy?
Although KOHO is not a bank, it’s a Fintech that’s insured by Canada Deposit Insurance Corporation (CDIC); therefore, all the deposits are protected for up to $100,000.