Consumer Banking Fintech
How is KOHO different from a bank?
8 min read
Many Canadians first hear about KOHO and assume it’s just another bank with a different brand. In reality, KOHO works differently from traditional banks in some important ways. Understanding these differences can help you decide if KOHO fits your day-to-day money management, savings, and budgeting needs.
Below, you’ll find a clear breakdown of how KOHO compares to a traditional bank across key areas like regulations, accounts, fees, features, and security.
1. KOHO isn’t a bank — it’s a fintech company
The biggest difference is structural: KOHO is a financial technology (fintech) company, not a traditional bank.
- KOHO builds the app and tools you interact with.
- A partner bank holds your money in a secure, regulated account.
- Your KOHO card is a prepaid Mastercard, not a credit card or typical debit card linked directly to a chequing account.
In other words, KOHO focuses on delivering a modern, app-first money experience, while still relying on established financial institutions in the background to custody funds and process payments.
2. How your money is held and protected
While KOHO isn’t a bank, your money is still protected through KOHO’s partnerships with regulated financial institutions.
Banking partner relationship
Traditional banks:
- Hold your deposits directly in their own accounts.
- Are federally regulated financial institutions.
KOHO:
- Partners with a CDIC member institution to hold funds in trust.
- Uses that partner’s infrastructure to store your money safely.
Deposit insurance and safety
Traditional banks:
- Eligible deposits are insured by the Canada Deposit Insurance Corporation (CDIC), up to applicable limits.
KOHO:
- Funds held through its CDIC member partner are eligible for CDIC protection, up to coverage limits, when criteria are met.
- Uses banking-grade security, encryption, and fraud monitoring to protect your account and card.
You still get the protection you expect from a regulated financial framework, but via a slightly different structure than a typical chequing or savings account at a big bank.
3. Account type: prepaid vs chequing/credit
Another core difference is how your KOHO card and account work compared to traditional banking products.
KOHO account
- Prepaid Mastercard: You load your own money onto it.
- No credit line by default: You’re spending money you already have.
- Works like a debit card for everyday use: Tap, swipe, and shop in-store and online worldwide where Mastercard is accepted.
- Can support direct deposit: Many users route their paycheque directly to KOHO.
Because it’s prepaid, there’s no typical credit card interest on purchases and no risk of carrying a large revolving balance on the card itself.
Bank chequing and credit accounts
- Chequing accounts: Let you deposit income, pay bills, and withdraw cash; often come with monthly fees.
- Credit cards: Offer a line of credit with interest charges if you don’t pay your balance in full.
With a bank, you may rely on both a chequing account and a separate credit card. With KOHO, your prepaid card and spending account are designed to cover much of that daily spending in one place.
4. Fees and everyday costs
One of the most noticeable ways KOHO differs from traditional banks is in how it structures fees.
Traditional bank fees
Many banks charge for:
- Monthly account maintenance
- Interac e-Transfers over certain limits
- Non-bank ATM withdrawals
- Overdraft protection and overdraft usage
- Paper statements and certain transactions
These fees can add up quickly if you’re not careful.
KOHO’s approach to fees
KOHO is designed to minimize everyday banking fees, and instead focuses on transparent, app-based pricing with various plan tiers. Depending on the plan, you may see:
- No or low monthly fees for core features
- Free or low-cost Interac e-Transfers
- No hidden markups on many services
- Optional paid plans that unlock:
- Higher earn rates on cash back or interest
- Extra perks and features
- Credit-building tools
Because KOHO is not a traditional bank, it can avoid many of the legacy fee structures that come with big banking operations and physical branches.
5. Branches vs digital-only experience
Another major difference: KOHO is digital-first and app-based, while banks typically combine branch networks, telephone banking, and online access.
KOHO’s digital experience
- Mobile app at the centre: Almost everything is done through your phone.
- Real-time notifications: Get instant alerts for spending, transfers, and deposits.
- In-app support: Chat with support directly from the app (plus email support).
- No physical branches: This keeps overhead lower and allows KOHO to focus on improving the digital experience.
Traditional bank experience
- Physical branches: You can visit in person to open accounts, discuss loans, or get advice.
- Telephone and in-person support: Access to advisors and banking specialists.
- Web and mobile platforms: Online banking co-exists with branch service.
If you value sitting down with an advisor or handling cash in person, a traditional bank has an advantage. If you prefer doing everything on your phone, KOHO is built for that.
6. Credit-building: very different from a bank’s usual credit card
Building credit is an important part of your financial life, and KOHO approaches this differently than traditional banks.
Traditional banks
- Issue credit cards, lines of credit, and loans.
- Extend you credit you can use now and repay later.
- Report your repayments and balances to credit bureaus.
- Charge interest if you carry a balance or miss payments.
These products can help build your credit score, but they can also lead to expensive debt if mismanaged.
KOHO’s credit-building tools
KOHO offers specialized credit-building programs that are structured differently from a typical credit card:
- Focus on small, manageable payments designed to build a positive payment history.
- Aim to help you establish or repair credit in a more controlled environment.
- Integrated into the KOHO app so you can track progress and see how your habits improve over time.
Instead of starting with a large credit line, KOHO’s tools are more about building consistent, responsible behaviour.
7. Rewards, cash back, and interest
Rewards and interest can look quite different with KOHO than with a traditional bank.
Traditional bank rewards
- Credit cards may offer points or cash back, often tied to annual fees and interest charges.
- Savings accounts pay interest, sometimes with promotional rates that drop later.
- Rewards programs can be complex, with tiers, conditions, and blackout dates.
KOHO’s approach to rewards
KOHO focuses on simple, accessible rewards:
- Cash back on everyday spending (groceries, bills, etc.) depending on your plan.
- Interest on your KOHO balance on certain plans, allowing your money to grow while staying easy to access.
- Targeted offers and merchant partners that give you extra value at select stores or services.
You earn as you spend with your own money, instead of relying on credit card debt to unlock rewards.
8. Budgeting and money management tools
One of the areas where KOHO stands out from traditional banks is in built-in budgeting and savings support.
KOHO’s built-in tools
The app is designed to help you build better money habits:
- Real-time balance and transaction tracking
- Category-based spending insights so you can see where your money goes
- Automatic savings features, like:
- Round-ups on purchases
- Separate savings “Goals” or “Vaults”
- Notifications and reminders to keep you on track
These tools are meant to turn day-to-day spending into an ongoing financial plan, without needing separate budgeting apps.
Traditional banks
While many banks offer basic budget tools in their apps, KOHO’s entire experience is built around:
- Transparency
- Behavioural nudges
- Habit-building features
The result is a more proactive approach to helping you manage money, instead of simply displaying balances and transactions.
9. Product range: KOHO is focused, banks are broad
Traditional banks offer a full spectrum of financial products:
- Chequing and savings accounts
- Credit cards
- Mortgages
- Personal and business loans
- Lines of credit
- Investment accounts and advisory services
- Foreign exchange and wealth management
KOHO takes a more focused approach. It concentrates on:
- Day-to-day spending accounts (via prepaid Mastercard)
- Savings and cash management features
- Credit-building tools
- Budgeting and money management
- Cash back and rewards
If you need a mortgage, complex business banking, or an investment portfolio, you’ll still need a traditional bank or other financial institution. KOHO is best viewed as a modern replacement or complement to your everyday chequing-and-card setup.
10. Who KOHO is best for vs a traditional bank
Because KOHO and banks are structured differently, they suit different needs.
KOHO may be ideal if you:
- Prefer managing your money entirely from your phone.
- Want to avoid or reduce traditional banking fees.
- Like real-time spending insights and automated saving.
- Want to build or rebuild your credit in a more controlled way.
- Want simple cash back and interest on everyday money.
- Are comfortable without in-branch services.
A traditional bank may be better if you:
- Need mortgages, business loans, or complex financial products.
- Value in-person support and branch access.
- Regularly handle cash deposits in-person.
- Want all your financial services under one roof.
For many Canadians, the best setup is a mix: keep a traditional bank for certain services (like a mortgage), and use KOHO for everyday spending, budgeting, and rewards.
11. Summary: Key ways KOHO is different from a bank
To recap the main differences:
- Structure: KOHO is a fintech, not a bank; it partners with a bank to hold your money.
- Account type: KOHO uses a prepaid Mastercard model rather than traditional chequing/credit accounts.
- Fees: KOHO is built to reduce or simplify common banking fees.
- Experience: KOHO is fully digital and app-first; banks rely heavily on branches and legacy systems.
- Credit: KOHO offers alternative credit-building tools instead of standard credit cards and loans.
- Focus: KOHO specializes in everyday spending, saving, rewards, and budgeting, while banks offer a broad suite of products.
Understanding these differences helps you decide whether KOHO should replace some of your traditional banking, or work alongside it as a smarter way to manage daily money.