Are you looking to cut your expenses and save more money in your account through an alternative to the big banks in Canada? This KOHO vs Simplii Comparison is for you.
Fintech companies like KOHO and online banks like Simplii have simplified banking and made it more cost-effective than traditional banks in Canada.
From high-interest on savings, competitive rewards on purchases, and low transaction fees, to greater accessibility, fintech companies are now the alternative way of banking.
But with the increase in competitive fintech companies in Canada, it’s easy to get confused about which company is perfect for you. KOHO and Simplii are among the leading alternative banking options in Canada with competitive offerings.
In this KOHO vs Simplii article, I discuss how the two companies differ and how to choose the one that suits your needs.
Let’s get started.
KOHO Overview
KOHO, short for of KOHO Financial Inc, is a Toronto-based fintech company that was founded in 2014 to offer Canadians unique and cost-effective banking solutions accessible online and on a mobile app.
While not a bank, this fintech company offers bank-type products including savings accounts, prepaid Mastercards and credit building programs through its partnership with reputable financial institutions like People Trust and Mastercard.
Since all deposits on KOHO are held by Peoples Trust, your money will be protected by the CDIC up to $100,000.
As of the time of writing this article, KOHO has over 500,000 users spread across the different parts of Canada.
Learn more: KOHO Review
KOHO Products
KOHO currently has three main financial products – savings account, prepaid cards and credit builder. Let’s take a detailed view of each of the products.
1. KOHO Savings Account
This is a high-interest savings account with no monthly fees, transaction fees and minimum balance.
Besides the high interest of 0.50% to 4.00% interest on savings, you can also put your savings on auto-pilot by using the RoundUp feature that automatically rounds up your purchases to the nearest dollar and puts it in your savings account.
In addition, the KOHO card gives you access to up to 6% cashback for eligible purchases which are automatically disbursed to your KOHO savings account.
Moreover, your savings of up to $100,000 on KOHO are covered by the CDIC. This means you have nothing to worry about in the unlikely event that KOHO goes out of business.
Finally, if you share your expenses with a family member, friend, or roommate, you can open a KOHO Joint account which shares similar features to the KOHO savings account.
2. KOHO Cards
KOHO cards are reloadable prepaid Mastercards that come in three tiers. As prepaid cards, you can only use the KOHO cards with the funds you have in your KOHO spending account.
The interesting part is that you will earn cashback whenever you use the KOHO cards to make in-store or online purchases.
Below is a detailed view of the KOHO Mastercards.
KOHO Prepaid Mastercard
The KOHO prepaid Mastercard is the standard tier of the KOHO Mastercards that has no monthly fees. It offers 0.5% cashback on all online and in-store purchases.
By using this card, you will earn 1.20% interest on your card balance with automatic savings available with the RoundUp feature. In addition, the card comes with a Mastercard Zero Liability Protection, unlimited free e-Transfers and ATM access.
The major drawback of the KOHO prepaid card is that it has a low cashback rate with a 1.5% foreign currency transaction fee.
However, these drawbacks are eliminated with the KOHO premium prepaid Mastercard.
Learn more: KOHO Prepaid Card Review
KOHO Premium Prepaid Mastercard
The Premium Prepaid Mastercard is an upgrade of the KOHO standard prepaid Mastercard. To access this premium card, you’re expected to pay a monthly fee of $9 starting with a 30-day free trial.
Comparatively speaking, the fee is worth it because it gives you access to 2% average cashback on groceries, restaurants, and transportation expenses.
You will also get up to 5% additional cashback when you make purchases with the card at eligible partner stores.
Besides that, you will also access price matching, financial coaching, make free foreign currency transactions and one free international ATM withdrawal per month with the premium card.
All the premium features are only extras as you will also enjoy the features of the KOHO standard prepaid card.
Note: KOHO has a Essential plan that charges $4 monthly fee with 1.5% interest on balance and 1% cashback on selected purchases.
Update: KOHO has added more accounts to its card package. See below how the current KOHO card accounts compare.
3. KOHO Credit Builder
The KOHO Credit Builder is a credit building program that aims to rebuild or build the credit scores of KOHO users. This is necessary because the KOHO cards can’t directly improve your credit as they don’t report to credit bureaus.
With the Credit Builder program, KOHO will avail a line of credit to your KOHO account and deduct a monthly payment from the account. It will then report the activities to TransUnion, which will likely improve your credit score.
The downside of this program is that it requires a $5 to $10 monthly fee for the 6 months duration. That said, if you’ll struggle to qualify for a regular credit card, then the KOHO credit builder tool is worth it.
Learn more:
KOHO Pros and Cons
Below is a highlight of the top pros and cons of KOHO based on the above review.
Pros
- Competitive interest on savings
- No monthly fees and transaction fees
- Competitive cashback rates
- Roundups feature for savings
- CDIC protection
Cons
- Limited financial products
- Subscription-based credit building solutions
Simplii Overview
Unlike KOHO, Simplii is an online bank officially known as Simplii Financial.
As the trademark and digital banking division of CIBC, Simplii has proven to be a top contender in the Canadian online banking industry since its inception in 2017.
Simplii’s robust collection of financial products makes it ideal for banking and investing solutions in Canada. Whether you’re looking for a savings account, chequing account, credit card, mortgages, borrowing or investment products, Simplii has you covered with one of its products and services.
With low banking solutions and competitive interests, Simplii has received multiple awards and attracted over 2 million Canadians since inception.
Learn more: Simplii Financial Review
Simplii Products
Simplii currently has one of the most comprehensive collections of financial products compared to other online banks in Canada.
It offers a savings account, chequing account, credit card, mortgages, loans and investment products.
Let’s take a detailed look at each Simplii Financial product below.
1. Savings Account
The Simplii savings account is an alternative to some of the best high-interest savings accounts in Canada.
This is basically due to its high promotion rate of 6.00% which is way higher than the Simplii’s standard savings rate (0.40%/5.50%). You can earn the 6.00% promotional interest on up to $1,000,000 deposits.
The competitive promotional rate makes the Simplii savings account ideal for short-term investment in Canada.
Besides the high promotional interest, the Simplii savings account is also ideal for its $0 minimum balance, $0 monthly fees, and $0 transaction fees.
That said, if you want to hold your money in US dollars, you can open a Simplii USD savings account which also offers 2.50% interest with a low foreign currency conversion fee.
The USD savings account also doesn’t have monthly fees, transaction fees and minimum balance.
Learn more: Simplii Financial HISA Review
2. Chequing Account
This is a no-fee chequing account that’s cost-effective for everyday banking.
Besides having no monthly fees and minimum balance requirements, this account also doesn’t have everyday transactions fees for services such as bill payments, e-Transfers, debit fees, withdrawal fees.
If you sign-up for the Simplii chequing account by June 30, 2023, you will get a $400 signup bonus upon making a consecutive three-month direct deposit of at least $100.
Learn more: Simplii No-Fee Chequing Account Review
3. Credit Card
Simplii offers a cashback Visa card that comes with competitive rewards on eligible purchases with no annual fee.
As of the time of writing this review, the Simplii Cashback Visa Card offers the following rewards.
| Purchases | Cashback |
|---|---|
| Initial $500 purchases with the card on an eligible purchases for the first 3 months | 20% |
| Initial $15,000 purchases with the card on pre-authorized, grocery, drugstore purchases | 1.5% |
| First $5,000 purchases at bars, restaurants and coffee shops each year | 4% |
| Every other purchase | 0.5% |
In addition, new Simplii Cashback Visa cardholders enjoy a low introductory interest on purchases of 9.99% which lasts for their initial six months of cardholding.
What I also like about the Simplii Visa card is that it has comprehensive coverage on Purchase Security, Extended Protection Insurance, and travel medical insurance.
The Simplii Cash Back card has many things going for it, but note that it requires a minimum gross household income of $15,000 to qualify – not so much of a drawback.
Learn more: Simplii Financial Cash Back Visa Card Review
4. Mortgages
Simplii could be your answer for new mortgage, mortgage renewal, mortgage refinancing or mortgage transfer in Canada.
In addition to having favourable mortgage terms, Simplii has one of the most competitive fixed and variable mortgage rates in Canada.
The interesting part is that you will get up to $4,000 promotional cashback when you buy a mortgage on Simplii or transfer your mortgage to the bank.
5. Borrowing Products
Are you looking for a secured/personal line of credit or personal loan in Canada? Simplii could be your final bus stop.
Based on your credit score, you can access an average of $5,000 line of credit on Simplii by having $20,000+ gross household income.
The eligibility varies per the type of loan you need and you can contact Simplii to know which of the loans you’re eligible for.
6. Investment Products
Unlike other online banks in Canada, Simplii offers access to investment products including mutual funds, GICs, and registered accounts (TFSA and RRSP savings accounts).
If you’re looking to invest in a diversified portfolio, the Simplii Invest Mutual Fund Account can handle the entire process for you.
Whatever your risk level is, Simplii has a portfolio for you ranging from income to aggressive portfolio.
Simplii Pros and Cons
Based on the above review, we can highlight the pros and cons of Simplii as follows:
Pros
- Competitive promotional interest
- No minimum balance on savings and chequing account
- Competitive cashback
- Automated deposits
- No transaction fees or minimum balance
- Multiple financial products
- CDIC protection
Cons
- Limited access to high regular rate
- Minimum income for credit card eligibility
KOHO vs Simplii Comparison
So far, I have explained what both KOHO and Simplii entail. Below is a highlight of their key features based on the above review.
| Key Feature | KOHO | Simplii |
|---|---|---|
| Products | Savings account, prepaid cards and credit builder | Savings account, chequing account, credit cards, mortgages, borrowing and investment products |
| Savings interest | 0.5% to 4.5% | 0.40%/5.50% |
| Promotional savings interest | N/A | 6.00% |
| Card type | Prepaid | Credit card |
| Monthly fees | None | None |
| Regular cashback | 1-6% | 0.5-4% |
| Interac e-Transfers fees | $0 | $0 |
| USD savings and chequing accounts | N/A | Yes |
| CDIC protection | Yes | Yes |
Looking at the above table, you can easily see how the two companies differ. But let’s take a closer look at their key differences.
KOHO vs Simplii Financial: Accounts
As you can see, Simplii has a more robust financial product offering than KOHO offers at the moment. With Simplii, you have all the products and services you need to replace This automatically makes Simplii the winner on this basis.
But if you’re strictly looking for a prepaid card and a dedicated credit building program, KOHO may be your best option here.
KOHO vs Simplii: Savings Interest
While KOHO offers 0.5% to 4.50% interest on savings, Simplii offers a slightly low rate of 0.40%/5.25% This simply means that you can earn more with KOHO in the long term than with Simplii.
On the other hand, Simplii’s 6.00% promotional savings interest will earn you more in the short time. KOHO, however, does not have introductory offer rates.
KOHO vs Simplii: Promotions
KOHO doesn’t currently offer any promotions on its savings, prepaid cards and credit builder program.
The only promotion available is a $20 sign-up bonus which you will earn when you open a KOHO account using this link. You will earn the same $20 bonus when you refer your friends and family to KOHO with your referral link.
On the other hand, besides promotional savings interest, promotional cashback, introductory interest on purchase, and chequing signup bonus, Simplii also offers a referral bonus.
You will get a $50 welcome bonus when you sign-up on Simplii using this link or refer your friends and family to the bank with your referral code.
Learn more:
KOHO vs Simplii: Card Type
KOHO offers reloadable prepaid cards while Simplii offers a credit card. In addition, KOHO card operates on the Mastercard network while Simplii operates on Visa.
With KOHO Prepaid card, your card activities will not be reported to credit bureaus thereby not improving your credit score.
On the other hand, the Simplii Cashback Visa card functions like a regular credit card and reports your card activities to credit bureaus.
You’ll also earn some cash back on your purchases using both KOHO prepaid Mastercard and Simplii Cash-back credit card.
KOHO vs Simplii: Fees
Both KOHO and Simplii don’t have monthly fees and e-Transfer fees on savings and chequing accounts.
However, KOHO has a relatively low foreign transaction fee of 1.5% (waived with the KOHO premium card) compared to Simplii’s 2.5% FX fee.
On the other hand, you don’t need to pay a monthly fee on Simplii to have your card activities reported to credit bureaus as is the case with KOHO’s credit building tool.
Verdict on KOHO vs Simplii Financial Comparison
Now you know the key differences between KOHO and Simplii. While you can’t make the wrong choice with any of them, it’s important to choose the one that suits your needs.
By considering the accounts, interest rates, and fees of the two companies, you can easily identify the one that’s perfect for you.
So which of the two are you going with? Kindly let me know in the comment below.
If you like this article, please explore our existing blog posts to learn more about other financial products and services in Canada.
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