Managing your money

KOHO is just as safe as a regular bank, but way smarter

5 min read

Julia Cooper

You’ve heard it before—Canadian banks are some of the safest in the world. Through a special Canadian alchemy of government regulation, independently managed Crown Corporations, and national character, regulated Canadian banks are, in general, the best place to keep your money when the going gets rough.

To put it in perspective, during the 2008 financial crash, 465 American banking institutions went under, but not a single Canadian bank failed. Canadians are smart for putting trust into our centrally regulated banks. It makes sense, it’s safe. And, it’s smart. So smart in fact, that KOHO does it too.

It’s where we put your money

KOHO is partnered with  Peoples Trust, a federally regulated, CDIC-insured banking institution. It’s where all the money in your KOHO prepaid Visa account is held—including your spendable, round-ups and savings goals.

What is CDIC Insurance?

The Canadian Deposit Insurance Corporation (CDIC) is a Crown Corporation that safeguards the money in regulated banks. So, it’s a Canadian owned corporation that insures the individual deposits of Canadians with accounts with those banks. In the highly unlikely event a Canadian bank does go under, the CDIC pays the individual customers of that bank the funds that they were insured for.

So, what happens to my money if KOHO fails?

First of all, that’s a big if. Ginormous, even. KOHO is a secure start up, with full funding and strong investors (including Portag3 Ventures, Drive Capital, National Bank of Canada, and Greyhound Capital). We’re not going anywhere.

But if, if, something were to happen to KOHO, you would still see your money returned through our investment partners. And if, for some incredibly unlikely reason, something bad then happened to all of our investors, your money would still be available to you through Peoples Trust.

Your money would still, in other words, be yours.

Straight up, what’s the risk of using KOHO?

Basically, there is no risk. Which is to say, the risk to users of KOHO is essentially the same as using a regular, federally regulated, Canadian bank.

Then why use KOHO instead of a regular bank?

Commercial banks in Canada are very well safeguarded against any sort of financial sector collapse, and that’s a huge plus for everyone. But that’s just the baseline.

Within three weeks of opening a KOHO prepaid Visa account, the average user spends a full 15% less than they used to, and saves $500. Banking our way is smarter, and helps you align your spending with your values. Plus, we make it easy peasy (and pretty painless) to save. And, of course, we don’t hit you with fees for doing it!

KOHO was created to empower Canadians to find balance, not just in their bank accounts but in their lives. Our mission is to help you take control over your financial life—without charging excessive or hidden fees or selling you credit products. Simple, day to day banking that is actually simple.

Within three weeks of opening a KOHO account, the average user spends a full 15% less than they used to, and saves $500.

KOHO is transparent about fees

Commercial banks expect you to pay a lot of fees. There’s usually a basic fee for even having an account, then there are fees associated with e-Transfers, fees for dipping below a certain balance, fees for overdraft protection, and so on. There are also often punishment fees for transactions where you have the dreaded NSF (non-sufficient funds)—the average NSF fee is $45. It’s not cheap!

Canadians pay, on average, more bank fees than anyone else in the world. It’s wild! (See how much you’re paying in bank fees at whatthefee.ca)

KOHO has a way simpler (and way, way lower!) fee structure. We’re digital first, so we’re not passing on the costs of physical branches and ATM networks to our users. No NSF fees, no overdraft, no limits on withdrawals or e-Transfers.

We have a free account and a premium account. The free account is legitimately, actually free. In fact, it earns you money, in the form of 0.5% cash back PowerUps on every dollar you spend. The premium account is $9 a month, and comes with an even better cash back rate (2% on transportation, groceries, and restaurants) and other perks, like financial coaching.

Actually, KOHO is transparent about other things too

We want KOHO users to know where we’re going. Which is why we’ve made our product roadmap public, through Trello. See what’s coming down the pike — right now we’re at work on making it easier to receive e-Transfers from friends and family right into your KOHO account. You can even put in a feature request right away, yourself!

The feedback we get from our users helps us determine what kind of tweaks the product needs. And you don't have to be a Trello wiz to have your feedback heard: our superfriendly user success team works with our product development team, helping you and us both make the most of KOHO.

Which is to say, the KOHO user success staff work locally, in the same office, as the rest of KOHO. They actually know the ins and outs of the product, and any issues users are reporting are immediately passed on to the rest of the team. There’s no byzantine, outsourced customer support service here, just real people, seven days a week.

And we really aren’t trying to sell you stuff!

Unlike other financial service providers (like, you know, most commercial banks…), we’re really, really not trying to sell you stuff. KOHO doesn’t even have a sales department! No one is trying to get you to sign up for this or that product, and none of our employees earn a commission.

Have you ever been pre-approved for a credit card from your bank? Fun fact: even if they say you’re pre-approved, once you sign up they can do a hard check on your credit score, causing a little dip in your credit rating. And then they can still deny you the credit card you’ve been pre-approved for. We would never!

Where the standard banking experience can involve navigating bank personnel trying to sell you on say, a different account structure or taking on more credit, KOHO is trying to go another way. We don’t want you to take on more debt, for instance. Just the opposite, in fact. (Like we said, the average user actually saves $500 in the first three weeks of using KOHO for spending.)

The long and the short of it? Your money is safe with KOHO. And we help you keep your money, well, yours.

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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’s Practical Money Skills.