KOHO vs EQ Bank: Which One Takes the Crown?

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 Five without exploring other options is like setting your money on fire with fees. KOHO is 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. In fact, EQ Bank is our favorite because it offers a quite complete range of banking services. However, which one is right for you will depend on you financial habits. KOHO offers strong budgeting and savings features that might help you get on track.

KOHO overview

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 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

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 basic account at $4 per month or pay more for additional perks and features. EQ Bank offers the same features and benefits to everyone and its accounts are free of monthly fees.

KOHO’s Essential, basic account, is offered for $0 to new users when they set up a recurring direct deposit of their paycheque or government benefits, or when they deposit $1,000 per month into their account.

EQ Bank gives everyone the same cash back and deposit interest rate at no additional cost. You can open up your Personal Account and have access to other types of accounts like an RSP, TFSA and a 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 Essential Plan is $4 per month. You will also pay fees for things like foreign currency transactions. For more advanced account features, like no foreign transaction fees, you need to upgrade to the Extra or Everything monthly subscription.

EQ Bank is more interesting because it 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 with its free accounts 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 Essential Plan, you earn 1% cash back on eligible groceries, food, drinks and transportation, and up to an additional 50% 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 more expensive 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 Essential Plan, every dollar you deposit earns 5% interest until the moment you spend it. EQ Bank gives you a slightly lower interest rate of 2.50% to 4% on every dollar. In both cases, 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 Personal 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 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 Personal 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 Essential plan, they’ll open a line of credit 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 $250 of interest-free overdraft protection. This is especially handy to avoid going into debt or turning to a predatory payday lender when life throws you a curveball. 

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 3.75% to 5.35%, and terms from 3 months to 10 years. 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.  

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 features, KOHO offers more help for people struggling to manage their money. However, EQ Bank is simple, free and offers more products. Indeed, it is a chartered bank. It is the ideal choice for people with a more established financial profile looking for a diversified digital banking solution.