What's the Difference Between Koho and Traditional Banks?

Koho vs Traditional Banks: What’s the Difference?

If you're asking yourself whether Koho is better than a regular bank, you're not alone. More and more Canadians are considering switching to Koho to avoid high fees and take control of their money. But what exactly is the difference between Koho and a traditional bank like RBC, TD, or Scotiabank?

Let’s break it down in simple terms.

What is Koho?

Koho is a Canadian fintech company that offers a prepaid Mastercard and a mobile banking app. Basically, it's an online-only bank. Since it doesn't have a physical location it doesn't have to spend money on staff, offices, etcetera. It can then pass those savings on to you, resulting in better rates and lower fees.

While Koho is not technically a bank, it has a partnership with Peoples Trust, which is a federally regulated financial institution, to make sure your money is safe and insured just like it would be at a regular bank.

What is a Traditional Bank?

Traditional banks include familiar names like RBC, TD, Scotiabank, CIBC, and BMO. They offer chequing accounts, savings accounts, credit cards, loans, mortgages, and investment services. They usually have physical branches and ATMs across Canada.

Koho vs Traditional Banks: Side-by-Side Comparison Chart

Advantages of Using Koho

• No monthly fees on the free plan

• High cashback on groceries, transportation, and more

• Budgeting tools in the app

• Optional credit building program even if you have no credit or bad credit

• Safe and insured by CDIC (via Peoples Trust)
  
  

Advantages of Traditional Banks

• Has RRSP and TFSA  programs not available at Koho

• In-person service available
  
  

Which One Should You Choose?

The choice is yours. But generally, it's better to use Koho if you want to avoid fees, earn cashback, and make budgeting easy. It’s ideal for everyday spending, saving, and improving your financial habits. It's also beginner friendly, and great for those that have no credit or poor credit and can't get credit cards or loans from traditional banks. But if you have complex investment needs or require in-person service, sticking with a traditional bank might be best.

Many Canadians actually use both; Koho for day-to-day spending and a traditional bank for more complex financial needs.

Is There a Koho Promotion to Save Me Money?

Yes, sign up for Koho using the Koho referral link https://web.koho.ca/referral/TJDAD9Y9 and make a purchase of $20 or more within 30 days to get your choice of $20 or 3 free months of Koho's Extra plan.

If you don't like clicking links (we know, you can never be too careful!) you can do it manually. Just use code TJDAD9Y9 when you sign up with Koho and make a purchase of $20 or more within 30 days to get your choice of $20 or 3 free months of Koho's Extra plan.