How to Earn 5% Interest without Locking Your Money in an Annual Term 

In collaboration with KOHO

Embarking on a journey to prosperity often begins with a thoughtful approach to savings. Money never sleeps, but it might make you lose sleep if you aren’t careful. Learn about effective strategies and the importance of striking a balance between returns and accessibility with fintechs like KOHO. Whether you’re a seasoned saver or just starting, keep reading to discover valuable insights to make your savings journey both rewarding and sustainable.

In an Uncertain World, Aim for Flexibility

Since you’ve worked hard for your money, you may not want to risk losing any of it. Many types of investments are volatile, such as stocks and crypto assets. What if you could get good returns without taking risks? It is entirely possible. Choices include annual term deposits like a Guaranteed Investment Certificate (GIC), traditional High-Interest Savings Accounts (HISA), and innovative products like KOHO’s account.

The latter holds a definite advantage over the competition: it is flexible and can satisfy all your banking needs. You don’t have to lock up your savings into a non-redeemable annual term to get a good rate! High-interest savings accounts from traditional banks also offer decent rates (sometimes). You can make deposits and withdraw at your convenience, but they tend to charge fees for almost any operation.

KOHO offers a spending and savings account, a prepaid card, and a user-friendly app. You can get instant cash back and earn interest on your entire account. KOHO partners with Peoples Trust, a federally regulated bank. Plus, your funds in a KOHO savings account are eligible for CDIC insurance.

How to Get 5% Interest with KOHO

KOHO offers four plans. The Easy plan is free and you will earn 3% on your entire balance. The three other plans offer a generous regular rate of 5%, which is noteworthy given that many other banks and fintechs either provide a lower rate or require a substantial account balance to qualify for 5%.

Now, how much do you have to pay to get 5% with KOHO and is it worth it? A simple calculation will answer all your questions. The Essential plan costs 4$ per month, making it the most affordable among the paid plans. Over a year, you’ll pay $48 plus taxes. If you keep $2,000 in your account, you’ll receive $100 in a 12-month period, covering more than the cost of your subscription.

Additionally, you can earn 1% cash back on groceries, transportation, food, and drinks. If you spend $800 per month on these categories, that amounts to another $96 after one year. On top of that, you can receive up to 5% extra cash back at selected merchants and 0.25% on all other expenses.

In comparison, most traditional bank HISAs offer rates between 1.3% to 1.9%, resulting in a $38 annual return. Moreover, there may be fees for operations. This is why the $4 KOHO Essential plan is a sensible choice.

The Extra and Everything plans also offer 5% interest, along with additional cash back benefits. If you are unsure of which plan best suits your needs, there is a 30 day free trial on KOHO paid plans.

Easily Set Money Aside for Specific Projects

With all your funds in your KOHO account, how do you ensure that you don’t spend what you intend to save?

Start by categorizing your goals into different segments such as travel, sports equipment, or significant events like a wedding. You can create distinct savings goals focused on each objective. 

Within the app, you can specify the amount you want to save, the deadline, and the frequency, with automatic adjustments to the contribution amount. Transfers between goals and to your spendable account are seamless.

KOHO also provides a Vault designed to help you segregate your spending from essential savings. If you have money you absolutely don’t want to spend, the Vault prevents accidental expenditures.

Why Choose KOHO and Its 5% Interest?

Unlike most banks, KOHO’s 5% rate is not a special rate. It’s a non-teaser rate and won’t go away after 3 months!

KOHO is particularly well-suited for a range of goals, especially short and medium-term objectives that benefit from its flexibility and high-interest rate. Consider KOHO for:

• Emergency funds
• Future travels and vacations
• Any significant upcoming purchase, such as a car
• Upcoming medical or dental bills

If you’re saving for retirement, buying a house, or pursuing any long-term project that would benefit from a registered account, consider opening a retirement savings plan (RRSP) or first home savings account (FHSA) with a bank, as KOHO doesn’t offer registered accounts. Combining shorter-term savings with long-term savings in different institutions allows you to leverage both KOHO’s innovative approach to personal finances and traditional banks’ variety of products.