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What exactly is KOHO?

Rounding it up

  • Think of KOHO as a way to help you reach your financial goals, equipped with a chequing account, a prepaid credit card, and a stellar app.

  • How does it work? First, you load funds to your zero-fee KOHO account via an e-Transfer or direct deposit.

  • Then, you make whatever purchases with your KOHO prepaid credit card—and earn cash back every single time.

  • Finally, you can use your KOHO app to look at your spending trends and cultivate saving habits.

4 min read

Silvi Woods
#KOHO#credit card#cash back#saving

What is KOHO?

KOHO is a way of managing your money that makes finding stability and balance in your financial life simple.

It’s a bit like a chequing account, with the perks of a credit card. Think of KOHO as a tool to help you reach your goals faster and spend your money on things you like, rather than things – like, say, credit card interest or surprise fees – that you don’t.

Just like a chequing account, you can put money into your KOHO account and then spend that money however you see fit. (We like snacks and vacations.) And like a credit card, in that we offer cash back and other perks, plus you can use it anywhere Visa is accepted.

The key difference is that unlike a credit card, it’s already your money—there’s no interest to pay, and the funds on your card are, well ... all yours. And unlike pretty much everyone with just a regular bank-issued credit card, the average KOHO user actually reduces their overall spending, and saves 7% of whatever money they load into their account.

The long and short of it is that KOHO makes it easier (even, dare we say, fun) to manage your spending and savings habits.

How does KOHO work?

It’s pretty simple: you add funds to your KOHO account either through e-Transferring from your regular bank account or by having your work’s payroll deposit your paycheque directly (Direct Deposit). Then, you use your KOHO card, either in person or online, to make purchases, just like you would with debit or credit. And then you can use your KOHO app to look at your spending and saving habits and create easy-to-execute Savings Goals.

You can use your KOHO card for anything you might use Visa for, like a gym membership or trying out that buzzy new fusion tapas place. The card is a reloadable prepaid Visa, and we run on the Visa network, so for merchants your card acts just like a normal credit card transaction, but for you it acts just like a debit card with cash back.

Using our truly stellar app, you can see how you’re spending your money at a glance, watch your cash back (which we call PowerUps) accumulate, and set up RoundUps on your purchases to painlessly stash a little money away.

You can also create clear Savings Goals, which sets up an automatic savings system to make it easier to jet off to Lisbon for a week, or be ready for that hot new sneaker drop, or whatever else it is that makes you happy.

Okay, so where does KOHO put my money?

We’ve partnered with Peoples Trust, a federally regulated and CDIC-insured bank to hold any money you load onto your KOHO card. This means that if anything were to happen to us, your money would be safe and you’d be able to access it through Peoples Trust.

Wait, what’s the difference between KOHO and a debit account?

The big difference is that we’re digital first — there are no branches, no tellers, no standing in line to pay your bills, no street corner ATMs (though KOHO works at any ol' ATM, and we won’t charge you for using one, even if other banks will).

Our costs are low and we prioritize making our users feel empowered about their financial decisions over things like brick and mortar bank branches.

And, unlike with a regular debit account, you get cash back (PowerUps) on all your purchases. With a regular KOHO prepaid visa account, you earn 0.5% cash back on every purchase. With KOHO Premium, you earn an extra 1.5% on 3 major categories. So you get money for buying the things you were going to buy anyway, but without the risk of going into credit card debt.

Also, our app is legitimately awesome. Which, to be frank, is not a thing most banks can say. Where they usually release a new version of their apps once a year, we release updates and improvements every three weeks.

So, what makes the app so awesome?

We tweak and improve our app in order to release updates every three weeks, and we put in the research time to make it easier than ever to align your spending and saving habits with your goals.

It’s dead simple to use, and there are lots of built-in ways to make the most of your money.

For instance, you can choose to round up your purchases to the nearest buck or two (or five or ten) and we’ll stash that money away for you— these are called RoundUps. It adds up quickly, and you can cash out whenever you like – back into your spending money or towards a savings goal (remember that automated way to set aside savings that we mentioned earlier?).

Another awesome feature is Early Payroll, which provides users access to $100 of their next paycheque, 3 days early, with no fees, no interest, no strings attached. All you have to do is set up direct deposit, that's it! This means no more predatory payday loans, NSF fees, to say the least!

Do I still need a regular bank account if I have KOHO?

Honestly? Probably, yes. Although, if you’re down to have your paycheque deposited directly and you never need to write paper cheques, you could technically use KOHO for all your chequing account needs.

It’s super simple to pay your bills from your KOHO account – everything from utilities and credit cards to Netflix and your cell phone bill. You can also send unlimited free e-Transfers, and, of course, use the card anywhere Visa is accepted. And you can deposit e-Transfers from other KOHO users instantly.

If you need to write cheques, or receive e-Transfers from traditional bank accounts, or would prefer to only deposit part of your paycheque into KOHO, you’ll still need a regular bank account.

How do most people use KOHO?

Most people start out by using KOHO for the fun kind of spending – loading their account with what’s left over after accounting for standard expenses and savings. The guilt-free spendable, if you will. Some financial experts recommend around 30% of each paycheque should go toward guilt-free spending, things like food and fun and y’know, being social. Everyone’s a little different, so your specific budget might vary.

A lot of KOHO users will load that Spendable onto their prepaid visa card and, well, spend it. It’s smart because it’s just as easy as reaching for a credit card, but it won’t cost you 20% to finance your life and since it’s already your money, you know you’re staying within your means.

"The long and short of it is that KOHO makes it easier (even, dare we say, fun) to manage your spending and savings habits."

Many users also find KOHO is a super simple way to start saving. As we mentioned earlier, our data shows that users save 7% of the money they load into the account (through RoundUps and Savings Goals), vs. the 2% of their income the average millennial stashes away.

As time goes on, we’re seeing more and more people using KOHO as their primary chequing account, having their paycheques direct-deposited and paying off bills and into savings directly from the app. Which makes sense–who wants to pay fees or interest? Plus, the RoundUps and PowerUps put more money in your pocket. The data shows that KOHO users who put their paycheque on KOHO save twice as much as people who don’t through RoundUps and Savings Goals.

What’s next for KOHO?

Glad you asked! Our product roadmap (meaning everything that’s in store for the future) is available to the public, and we love when users tell us what they want to see from us. Our product team uses the suggestions of the users to inform our next moves. KOHO is meant to empower our users to feel good about how they manage their money.

To that end, we’re building KOHO for the people who use it. Every Canadian who joins and shares their voice is helping us build a better KOHO.

Silvi Woods

Silvi Woods is a financial planner at Wealthsimple and holds her CFA and CFP designations. Prior to Wealthsimple, she worked as an Investment Analyst for one of Canada’s largest equity mutual funds and as a Financial Planner at KOHO.

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The KOHO Visa* Prepaid card is issued by Peoples Trust Company pursuant to license by Visa Int. *Trademark of Visa Int., used under license. **These services are provided by Service Providers, including Visa, Peoples Trust Company and Galileo Processing. Learn more about your finances with Visa Practical Money Skills.