KOHO Review : A Prepaid Card With Unique Benefits!

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Table of Contents

    KOHO is one of the Canadian financial technology companies changing the way people access banking services. The number of users of such online solutions is growing every year. I’ve had a KOHO account for over a year, and I share its strengths and weaknesses in this article.

    3.8
    Hardbacon Score
    • Fees

    • Cash Back and Interest

    • Tools

    • App

    • Load and Withdrawal Limits

    At a glance

    KOHO offers an all-in-one solution for people who want to spend and save better. The app is perfect for tracking your current spending and setting short-term savings goals. Its benefits are limited, however, and the app doesn’t always make things easy for users.

    OPEN A KOHO ACCOUNT

    KOHO Easy account: How it works

    KOHO has a lot to offer. It offers many services that can replace those of banks and credit unions. To avoid account maintenance fees, I chose the Easy plan, the only one of KOHO’s plans that’s completely free. The People’s Trust Company is behind every KOHO account, and the funds are insured by the Canada Deposit Insurance Corporation (CDIC).

    To top up your KOHO prepaid Mastercard and start spending (or saving), it’s possible to fund your account with a debit card or Interac eTransfer. If I wanted to completely abandon my current bank for KOHO, I could (almost) do it, because the fintech allows direct deposit.

    You can deposit all or part of your pay directly into your KOHO account. The same applies to government deposits, for example if you receive child benefit. However, KOHO does not offer investment accounts, TFSAs, RRSPs or other registered investment accounts.

    [Offer productType=”CreditCard” api_id=”604aaa18e770040140f2203e”]

    A significant disadvantage when opening an account is the waiting time to receive the card, which is 7 to 10 days. KOHO claims to provide a virtual card instantly, but this didn’t work in my case. When I clicked to get the virtual card, the application asked me to order the physical card. Once received, you can activate it and you’ll get its virtual version in the app. The card is compatible with Apple Wallet and Google Pay.

    With the Easy plan, I earn 1% cash back on my grocery and transportation purchases, and 3% interest on my balance. Cash back can rise to 5% at selected partners, such as Altitude Sports and Baskin Robins.

    Liste des partenaires KOHO avec pourcentage de remise
    Forfait Pratique KOHO avec pourcentage de remises

    When interest rates rose in 2023, KOHO was slow to offer an attractive rate compared with its competitors. Today, I can say that it has become competitive again and is one of the best accounts for saving money.

    KOHO also offers paid plans, which I haven’t tried personally. The cost varies from $4 to $19 per month. You can earn up to 5% interest on your balance and 2% cash back on certain expenses.

    Useful budgeting tools in the KOHO app

    My experience with the tools provided by KOHO is mixed. I like the ability to make a budget and the way KOHO supports me. For example, I’ve been able to choose my spending categories, enter my income information and set targets by category. What’s interesting is that I’m not left to determine these amounts on my own; KOHO offers a suggestion for almost every category, as you can see from these images.

    Mon budget avec KOHO graphique
    Budget koho montant suggéré pour catégorie détail
    Dépenses mensuelles dans un graphique et indication de la moyenne

    At the bottom of the budget, my savings capacity is clearly indicated, which I can use to set goals. There’s also a graph showing your actual spending on the KOHO card (but not all your spending if you have accounts elsewhere). An independent budgeting application is still the best solution if you have various bank accounts.

    I was a little less charmed by the savings Goals. I tried to set a long-term goal for dental care and couldn’t do it. I started by entering the amount I wanted to save. Normally, you can also choose the deadline (when you’ll need the money), the frequency of payments, and then the amount to be paid, for example every week, adjusts automatically. But for a goal in 2027, the application had a bug that kept coming back despite my repeated attempts. I couldn’t go any further than three months ahead from now, which isn’t very practical!

    KOHO also offers a Vault, ideal for those who find it difficult to control their spending. You can put extra money in there that you don’t want to spend, and it prevents you from spending it accidentally. So having all your accounts in one place, saving and spending, isn’t a disadvantage. Unlike Goals, you don’t need to set an amount or a date to add money.

    Build your credit with KOHO

    KOHO offers a prepaid card, which has no impact on your credit. KOHO does, however, offer ways to improve your credit score, on a subscription basis. This feature costs from $5 to $10 per month, depending on your plan.

    It works by opening a line of credit in your name and choosing an amount to set aside from it each month. Payments are reported to Equifax, which helps improve your credit score (if you make the payments right). An other option, the secured line of credit, requires you to set aside funds up front (from $30 to $500). You then withdraw as much as you like, and the punctuality of each repayment helps build your credit history.

    KOHO’s limitations

    One of KOHO’s limitations is its velocity limits! At any time, your account balance cannot exceed $50,000. Debit card loads cannot exceed $1,500 per day, which I find relatively low for people who want to make KOHO their main savings and spending account. For direct deposits (your paycheck, for example), the limit is higher.

    Withdrawals are also limited. At ATMs, for example, you can withdraw no more than $1,010 per day. The maximum number of pre-authorized payments is 20 per month. If you have a lot of subscriptions and bills (phone, internet, electricity, streaming, etc.), you risk exceeding this number. Still, it’s enough for the vast majority of people.

    limites de recharge et dépense KOHO maximums
    limites de recharge et dépense KOHO débit et préautorisés
    limites de recharge et dépense KOHO depot direct et interac

    KOHO’s other disadvantages, in my opinion, are the modest cash back and foreign transaction fees that come with the free Easy plan (but be aware the FX fees are waived in some paid plans). Some competitors offer free cards and accounts and are able to waive foreign transaction fees or offer cash back in more spending categories.

    Is KOHO for you?

    KOHO’s prepaid card is a good choice for anyone who wants to avoid carrying a credit card in their wallet. Anyone who wants to improve their spending and budget management should also try KOHO. For optimum use, however, you need to use the prepaid card for almost everything, so that your spending analysis is good.

    KOHO is not ideal for saving, as my experience with long-term goals shows. You should also know that you can’t build your financial future with KOHO. There are limits on how much you can save, and for registered accounts such as the FHSA for first-time homebuyers, you have to go elsewhere!

    FAQs about KOHO

    Is KOHO a credit card?

    No, KOHO is not a credit card. It is a prepaid card that operates on Mastercard’s network. As a hybrid between a credit and a debit card, KOHO helps you earn cash backs.

    Is KOHO safe?

    Yes, KOHO is safe. KOHO stores your money in Peoples Trust, a federally regulated banking institution. Your deposits are also eligible for CDIC protection.

    Can KOHO help me build my credit?

    Yes, if you subscribe to their Credit Builder program. Depending on your plan, it costs between $5 ans $10 per month.

    How long does it take for KOHO to accept an e-transfer?

    E-transferts can take up to 30 minutes.

    How does KOHO Credit builder work?

    To build your credit with KOHO, you open a line of credit and you choose an amount to set aside from your line of credit. Then, KOHO will report that amount as an on-time payment to Equifax.

    How does KOHO make money?

    KOHO has three main source of income: interchange fees, affiliate marketing (through its offers) as well as subscriptions to its Essential, Extra and Everything plans.

    Who owns KOHO?

    The company provides banking services in partnership with Peoples Trust. Its founder and CEO is Daniel Eberhard.

    How much is KOHO Premium?

    KOHO Premium has changed to 3 paid plans named KOHO Essential, Extra and Everything. Depending on your plan, it costs $4 (Essential), $9 (Extra) and $19 per month (Everything).

    How do I use the KOHO virtual card?

    The easiest way to use your KOHO virtual card is to add it to Apple or Google Pay.

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    Maude Gauthier is a journalist for Hardbacon. Since completing her Ph.D. in communications at University of Montreal, she has been writing about finance, insurance and credit cards for companies like Fonds FMOQ and Code F. As a responsible user of credit cards, she can spend hours reading the fine print to fully understand their benefits. Because of their simplicity, she developed a preference for cash back cards. After suffering steep increases with her former insurer, she can now proudly say that she saved hundreds of dollars by shopping around for her auto and home insurance. In her free time, she reads novels and enjoys streaming popular shows (and possibly less popular shows, like animal documentaries).