KOHO vs EQ Bank: Which One Takes the Crown?

KOHO vs EQ Bank
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    It’s time to compare two of Canada’s leading neobanks – KOHO vs EQ Bank. Loyalty is an excellent quality to have, except when it comes to your cash. Sticking to one of the Big Six without exploring other options is like setting your money on fire with fees. Enter KOHO, a Canadian fintech company on a mission to help us live a stress-free financial life. EQ Bank is a fan-favourite that offers one of the best high-interest savings accounts, GICs, and more. So which one is right for you? 

    KOHO overview

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    KOHO offers an app-based financial services platform designed to help you save money and stay on top of your spending. When you sign up for KOHO, you get a complimentary KOHO Prepaid Mastercard. You can use it for purchases wherever Mastercard is accepted – in store, online and abroad.

    Using the app, you can set budget goals, track spending, and save money using features like RoundUp and the Vault. You can also save money by earning cash back on eligible purchases. After all, every dollar in your KOHO account earns interest until the moment you spend it. 

    EQ Bank overview

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    EQ Bank is a Canadian digital bank that offers high-interest savings accounts and guaranteed investment certificates (GICs). Unlike traditional banks, EQ Bank operates entirely online and you access your accounts through the website or mobile app. When you join EQ Bank, you can request the EQ Bank Card that can be used everywhere Mastercard is accepted. 

    EQ Bank is known for its free accounts and aggressive interest rates on deposits. From both the website and mobile app, you can view your account balances, add or withdraw funds. Further, you can transfer funds between different EQ Bank accounts, or send money to an external account via your dashboard or an eTransfer. You can also access your GICs and purchase new ones, as well as set up transfers to help reach your financial goals.

    Accounts offered by KOHO vs EQ Bank

    When it comes to accounts offered by KOHO vs EQ Bank, the main differences are the options to choose from, features, and cost. KOHO allows you to choose from the free basic account or pay for additional perks and features. EQ Bank offers the same features and benefits to everyone with the ability to open up to 5 additional accounts. Both KOHO and EQ Bank offer single and joint accounts – so it really comes down to what type of account you’re looking for and what features your budget will allow you to access.

    KOHO offers one type of deposit account with four pricing tiers: Easy Plan (free), Essential Plan ($4/mo), Extra Plan ($9/mo) and Everything plan ($19/mo). The Essential, Extra and Everything plans offer higher cash back rates, higher deposit interest rates, and more advanced features like a discount on the Credit Building service and access to a  Personal Financial Coach. You can only have one joint and one single account open at the same time. 

    Instead of pricing tiers, EQ Bank gives everyone the same cash back and deposit interest rate at no additional cost. You can open up to 5 Savings Plus Accounts and have access to other types of accounts like an RSP, TFSA and US Dollar Account.

    Fees to expect from KOHO vs EQ Bank

    KOHO offers different subscription plans to help you get the most bang for your buck depending on your goals and spending habits. The Easy Plan is free and allows unlimited daily banking transactions like card purchases, bill payments, eTransfers, and more. You will still pay fees for things like foreign ATM transactions and foreign currency transactions. For more advanced account features, like no foreign transaction fees, you need to upgrade to a paid monthly subscription.

    Similarly, EQ Bank does not charge monthly account fees and also allows unlimited everyday transactions like bill payments, eTransfers, electronic fund transfers, and more. Unlike KOHO, EQ Bank does not charge foreign transaction fees and allows free ATM withdrawals from any ATM in Canada using your EQ Bank card. In fact, EQ will refund you any fees charged to your account by a Canadian ATM – a feature missing from KOHO. 

    KOHO Prepaid Mastercard 

    KOHO provides several colour options to choose from so you can pick a card that suits your style. Your KOHO Prepaid Mastercard is linked to your spendable account and the spending limit is determined by your account balance. The money you deposit is automatically accessible with your card – no need to move money to a separate card account.

    EQ Bank Card

    The EQ Bank Card, which is also a prepaid Mastercard, comes in one standard design – a nice bright yellow that’s easy to spot at the bottom of your purse. However, it is not linked directly to your EQ Bank account. You need to load it manually by transferring money from your main account to your card account. 

    KOHO cash back

    With the free Easy Plan, you earn 1% cash back on eligible groceries and transportation, and up to an additional 5% cash back at KOHO partner merchants. If you want a higher cash back rate and more eligible purchase categories, then you need to upgrade your account to a paid subscription plan. 

    EQ cash back

    The EQ Bank Card offers a lower cash back rate of 0.5% on purchases. But unlike KOHO, there are no specific cash back purchase categories. That means all card purchases earn cash back no matter what you buy or where you shop. On the other hand, EQ Bank has not partnered with any merchants so there is currently no opportunity to earn additional cash back at certain stores. 

    Earning interest with KOHO vs EQ Bank

    With KOHO’s free Easy Plan, every dollar you deposit earns 0.5% interest until the moment you spend it. However, if you want a higher interest rate then you need to upgrade to a paid subscription plan. Interest is calculated on your daily closing balance and deposited into your account monthly.

    EQ Bank gives you a much higher interest rate of 2.50% on every dollar in both your Savings Plus Account and your EQ Bank Card account. Remember, you have to load your card by moving money from your main EQ account to your EQ card account. Interest is calculated on your daily closing balance and deposited into your account monthly. 

    Budgeting features

    Both KOHO and EQ Bank make it easy to manage your bill payments with automatic payment options. You can set up automated payments using the information associated with your account (like account, route, and transit number) or with your prepaid card information. This feature ensures you never miss a payment to avoid damaging your credit score or having services discontinued.

    KOHO

    However, KOHO wins the budgeting contest with advanced features that give you better control over your spending and savings habits. From the app, you can create a custom budget using your monthly income and expenses. You can set up different expense categories and create a spending limit for each one. KOHO calculates how much money you have left to save and will keep track of your spending with a handy colour-coded progress wheel. 

    KOHO also provides you with real-time insights into your spending behaviour. This includes a transaction history, account activity notifications, spending trends over time, and an overview of your spending behaviour based on purchase categories.

    EQ Bank

    EQ Bank does not offer comparable budgeting features. Having said that, you can open up to 5 different EQ Savings Plus accounts and use them like a digital “envelope system” for certain expenses – like rent, groceries, car insurance, daycare, etc. From there, you can set up automatic bill payments out of one or various accounts. You will get a transaction history for every account, but that’s about it. You can’t set spending limits, get insights, or budget-related notifications. 

    However, you can use your EQ Bank Card to help stay on budget. Just load with the amount of money you want to spend. Since it’s not connected to your main account, you can’t accidentally overspend and find yourself short on funds for upcoming bills. This is a great way to separate your fun money from what’s earmarked for your financial obligations.

    Savings tools

    KOHO and EQ Bank can both help you save money to reach your goals faster, but KOHO still comes out on top in this area too. Hoever, KOHO offers personalized savings features that EQ Bank does not, such as:

    The Vault is where you send money you absolutely do not want to spend – it acts like a separate account not linked to your prepaid card. The money you stash away in The Vault continues to earn interest between 0.5-4.5% depending on your subscription plan. 

    Goals is another feature that allows you to set specific savings targets and track your progress. You set a specific amount you want to save by a certain date and KOHO will calculate how much you need to set aside for your goal each month. However, KOHO won’t automatically transfer the money to the Vault, you need to do that yourself. 

    RoundUps is hands down one of the best savings features ever invented. It lets you save money effortlessly every time you spend it. By rounding up purchases to the nearest $1, $2, $5, or $10 KOHO will automatically set that extra cash aside in your savings. From there, you can cash out to your spendable account, put the money towards a Goal, or let the balance keep growing. You call the shots.

    EQ Bank

    Unfortunately, EQ Bank does not offer comparable savings features. However, you can open up to 5 EQ Savings Plus Accounts and use them to stash away money for different goals. For example, you could set up different accounts for things like a hot holiday, a down payment on a house, a new car, or whatever you’re trying to save up for. 

    You can even nickname each account and set up automatic transfers from your main account to your other EQ account(s). If you have accounts at other institutions, you can set up recurring Electronic Funds Transfers (EFTs) to pull money from external accounts to your EQ account(s). EQ Bank won’t keep track of your savings progress, though. So you’ll need to stay disciplined and track it yourself. 

    KOHO additional features

    KOHO takes convenience to the next level with unique features not offered by EQ Bank. From building credit to managing cash flow and mastering your money, KOHO gives you additional tools to crush your goals.

    Credit Building

    KOHO offers a special Credit Building plan to help you (re)build credit without a credit card or borrowing money. For $10/month with the Easy plan, they’ll open a tradeline on your credit file and report your payments to the credit bureaus over 6 months, with the option to re-subscribe after that time.

    Cover

    With Cover, you can access up to $50 of interest-free overdraft protection for just $5/month. This is especially handy to avoid going into debt or turning to a predatory payday lender when life throws you a curveball. 

    Personal Financial Coach

    The KOHO Extra Plan gives you access to a Personal Financial Coach that works with you one-on-one like a personal trainer for your wallet. They help establish budgets and savings plans while teaching you skills and strategies to manage money like a pro – without managing your money directly for you. 

    Two of the key features of KOHO are the real-time account balance and instant transaction notifications to help keep you on track and avoid overspending. You can also freeze your KOHO card instantly if it is lost or stolen or to prevent unauthorized transactions.

    EQ Bank additional features

    EQ Bank has you covered with the full suite of financial services. From investments to moving money and borrowing it, you can access almost all the traditional financial services you need in one convenient spot. 

    Investments

    EQ Bank offers Guaranteed Investment Certificates (GICs) with rates ranging from 2.65% to 4.75%, and terms from 3 months to 10 years. Choose from a variety of registered, non-registered, RSP, and TFSA GICs.  Before choosing a GIC, use their calculator to see your return on investment. 

    International Money Transfers

    When you bank with EQ, you can access international money transfers powered by Wise that are up to 8x cheaper than other transfer services. There are no hidden fees and the exchange rate you pay is the same one you see online. Your recipient will receive their money within 3 business days, and sometimes even within a few minutes.  

    Mortgage Marketplace

    EQ Bank customers get access to an Equitable Bank mortgage with exclusive rates. Or you can use the Mortage Marketplace to compare rates and find the best mortgage for your needs from a Canadian lender. You can apply online in minutes and get professional advice from a real-life mortgage broker.  

    Accessibility

    Both KOHO and EQ Bank are completely digital platforms and do not have any physical branch locations. Instead, you can access customer service through the chat feature or by calling the customer service number on their respective websites. 

    While KOHO does have a web-based platform, its functionality is extremely limited. You can only send eTransfers, get the information you need to receive eTransfers, set up direct deposits, and contact support through your settings. Even though KOHO does not offer a photo cheque deposit feature, you can instantly fund your account with either a Mastercard-Debit or Visa-Debit linked to an external bank account. 

    KOHO

    KOHO Funding Options

    EQ Bank

    EQ Bank Funding Options

    On the other hand, EQ is a full-service digital bank offering both a robust web platform and mobile app. Almost all products and features are accessible through either platform. EQ Bank allows you to virtually deposit cheques by photo, but you cannot fund your account with a credit-debit card.

    KOHO vs EQ Bank: which one is right for you? 

    KOHO and EQ Bank are two of Canada’s leading neobanks that offer digital-only banking solutions. In terms of accounts and fees, KOHO offers Basic and Pay-for-Features accounts, while EQ Bank offers the same free features and significantly higher deposit interest rate to all users without requiring a subscription.

    KOHO allows you to set budget goals, track your spending, save money, and build credit. That makes KOHO the clear winner for younger tech-savvy people looking to master their money and build strong financial habits. 

    EQ Bank is known for its free industry-leading high-interest Savings Plus Account and GICs. With investment products, global money transfers, and a mortgage marketplace, EQ Bank is the ideal choice for people with a more established financial profile looking for a diversified digital banking solution. 

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    FAQs: KOHO vs EQ Bank

    Are my deposits safe with KOHO or EQ Bank?

    While EQ Bank automatically insures eligible deposits up to $100,000, KOHO itself is not insured by CDIC. However, they have partnered with Peoples Trust Company, which is CDIC insured, to hold your funds. In the unlikely scenario that KOHO fails, Peoples Trust Company will return your eligible deposits. Therefore, while the deposit insurance process is slightly different between KOHO and EQ Bank, Canadian customers can rest assured that their deposits in either institution are safe and protected by CDIC.

    How does the cash back offered by KOHO and EQ Bank differ?

    KOHO offers up to 1% cash back on eligible groceries and transportation, and up to 5% cash back at KOHO partner merchants under its free Easy Plan. If you want to enjoy a higher cash back rate and more eligible purchase categories then you need to subscribe to a paid plan. Whereas EQ Bank offers a 0.5% cash back on all purchases made with the EQ Bank Card, regardless of the purchase category. EQ Bank does not currently have any partner merchants or purchase categories for additional cash back earnings.

    What are the benefits of having a high-interest savings account with EQ Bank compared to KOHO?

    EQ Bank offers a higher interest rate of 2.50% on every dollar in your Savings Plus and EQ Bank Card accounts, while KOHO offers a 0.5% interest rate with the free Easy Plan that only increases with the paid subscription plans. EQ Bank’s interest rate is significantly higher than KOHO’s, making it more appealing to those who want to earn more on their deposits.

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    Heidi Unrau is a senior finance journalist at Hardbacon. She studied Economics at the University of Winnipeg, where she fell in love with all-things-finance. At 25, she kicked-off her financial career in retail banking as a teller. She quickly progressed to become a Credit Analyst and then Private Lender. This hands-on industry experience uniquely positions her to provide expert insight on loans, credit scores, credit cards, debt, and banking services. She has been featured in publications such as WealthRocket, Scary Mommy, Credello, and Plooto. When she's not chasing after her two little boys, you'll find her hiding in the car listening to the Freakonomics podcast, or binge-watching financial crime documentaries with a bowl of ice cream. Fun Fact: Heidi has lived in five different provinces across Canada and her blood type is coffee.