Koho and Tangerine are low-fee, digital-only financial institutions based in Canada. They both offer great card options, products to save and manage your money and pay interest on your balances.
However, past these similarities, Koho and Tangerine are pretty different from one another. Tangerine is a registered and federally regulated bank, whereas Koho is simply a fintech company, not a bank.
Koho’s main product is their reloadable, prepaid credit/debit card and money management app. With Tangerine, on the other hand, you have access to much more; you can apply for mortgages, loan products, registered savings products, investment options, and even business banking services.
Nonetheless, we’re going to compare Koho vs Tangerine’s services in today’s post to help you decide which one you should choose. More specifically, we’ll cover which one is best in the categories and then declare a final winner:
- Credit/spending cards
- Savings accounts
- User experience
Keep reading to see which one comes out as the ultimate winner in this head-to-head comparison. Let’s get started!
Koho is an alternative way of managing your spending and saving habits in Canada. Practical, streamlined, and affordable, they are a financial technology company to help you manage your finances more effectively and curb overspending.
Koho’s most significant offering, and what most of their services are based around, is their easy-to-use prepaid and reloadable Mastercard.
This card is accepted as a Mastercard at point-of-sales touchpoints but functions more like a debit card from a consumer standpoint.
Thus, many disadvantages of credit cards, such as the ease of overspending, harmful effects on your credit score, and high fees, are eliminated. In addition, all of your finances are managed through Koho’s user-friendly mobile app.
It’s important to note here once again that Koho is not a registered bank. Despite offering similar features to a free savings account, paying interest on its balances, and allowing you to reap the benefits of a credit card, they are simply a technology company centered around financial services.
Tangerine is a leading digital bank in Canada. Offering a variety of no-fee bank accounts, credit cards, mortgages, loans, and investment products, they are a full-service bank for those who prefer the convenience and ease of online-only banking.
As a branchless bank, its aim is to reduce the high costs of traditional banking and pass the benefits onto the customer in the form of low fees and attractive interest rates.
As a registered and regulated bank, they’ve got a wide variety of products and services that, in my opinion, can rival the Big Five.
Unlike Koho, Tangerine does offer the necessary products and services to fully replace your current bank. You can even do your business banking with Tangerine and take advantage of their business accounts and credit cards.
1. Credit cards: Comparing Features and Benefits
Despite being quite different from one another as financial organizations, the biggest overlap between Koho and Tangerine is their credit card. In fact, both Koho and Tangerine are quite famous for their low-fee cards that offer really good advantages to their users.
But of course, no two things are created equal. We’ll now compare them to decide which card is better.
Features and Benefits – Koho Prepaid Reloadable Mastercard
Like I mentioned earlier, Koho’s prepaid reloadable Mastercard is the bread and butter of this fintech company. This card gives you the spending capabilities of a credit card without any interest or fees and consequently can be considered a convenient hybrid between a credit and a debit card. It can also be used as a virtual card for online shopping.
Koho’s prepaid Mastercard pulls funds from your account with every transaction in a similar fashion to a debit card, meaning you cannot spend any more than you already have.
Koho suggests that this actually leads consumers to spend their money more mindfully and save more each month, which they can back up with user data. The card is also connected to an efficient budgeting and money-management app that allows you to simplify your everyday finances.
That is not all. Although it functions as a debit card at times, the card also gives you the flexibility of a Mastercard at all checkout points and pays 0.5% cashback on every purchase.
If you’re interested in building your credit score while using this straightforward card, you even have the option to do that for a monthly $7 fee. Building your credit score without the uneasiness that comes with having a credit card… that’s full flexibility right there.
Are you looking for a more in-depth review of the Koho card? Head here.
Like the Koho card, Tangerine’s Cash Back Credit card is quite popular among Canadians. It offers low fees along with unlimited money-back rewards on personalized cashback categories.
However, unlike the Koho card, this is a full-fledged credit card, so it does not have any mechanisms to promote saving or mindful spending.
The cashback features of the Tangerine credit card are as follows: you earn 2% cashback on your everyday purchases in either two or three cashback categories of your choice (such as grocery, drug-store, gas, recurring bill payments or entertainment), and 0.5% cashback on everything else.
You can redeem your cashback into your Tangerine Savings account or into your credit card account as a credit.
Beyond the zero dollar annual fee and money-back features that I’ve outlined, the terms, conditions and interest applied to this card are relatively standard and comparable to other Canadian credit cards out there, meaning things can get quite pricey unless you are very careful.
Further, you must be aware of the effects using this card has on your credit score as well.
Some of these features are a 19.95% interest rate (goes up to 24.95% if you miss two monthly minimum payments), no grace period for cash advances, a $25 over-limit charge, a 2.5% charge for foreign exchange currency conversions, and a $5 charge for past statements reprints.
Are you looking for a full review of the Tangerine Cash Back Credit Card? Head here.
With its flexibility, security and ease of use, Koho’s prepaid reloadable Mastercard comes out as the winner in this category.
Its hybrid features that combine a debit and credit card offer users the best of both worlds: low fees and peace of mind that comes with a debit card and the flexibility and cashback of a credit card. Plus, the product has your financial health in mind, which is something that is really hard to come by these days.
Are you interested in the Koho card and their state-of-the-art money management app? Sign up here!
2. Savings and interest-bearing accounts: Comparing Features and Benefits
We’ll now compare the savings accounts offered by both Koho and Tangerine. If you’re on the market for a new, low-cost, and digital savings account, let’s see which one takes the cake.
You can set up various accounts within your Koho app, such as a Spending Account, Savings account, and a roundups account (where your purchases round up to the nearest dollar and the difference is saved into a separate account. Mindless saving!).
With Koho, you can get interest on your entire account, regardless of whether the funds are in your savings and spending account, on one condition: set up a direct deposit.
This can be a one-off direct deposit, such as a single client invoice or government cheque, or a recurring one from your employer or regular clients.
Once a single direct deposit hits your account, all that you have to do is click “Earn interest” to start earning interest on all of your balances. This annual rate is calculated daily and paid out monthly to maximize your earnings.
The interest paid and no-fee feature of the Koho Savings account are its biggest features. Past this, things are pretty standard: your deposits are protected by the Canada Deposit Insurance Corporation (CDIC) (though this is only if you’re earning interest.
Otherwise, you’re covered by Koho’s financial partner, Peoples Trust). In addition, there are no additional fees of any kind, such as for account opening, closing, or sending or receiving money. There is also no minimum balance.
Tangerine’s savings account has no monthly fee and no minimum balances. It pays only 0.10% interest on your balance, is calculated daily, and is paid out to your account monthly.
Tangerine offers an additional four savings accounts in addition to their regular one: a Tax-Free Savings Account, an RSP Savings Account, a US Dollar Savings Account, and a RIF Savings Account. Believe it or not, Tangerine has paid nearly $10,000,000,000 in interest to Canadians to date!
Koho is the clear winner here. At an interest rate of , Koho is significantly higher than Tangerine’s small rate of 0.10%.
3. User experience: Comparing Features and Benefits
Both Koho and Tangerine are digital-only institutions. That means that the digital user experience associated with both of these companies is very, very important. Let’s dive deep and see which one wins in the head-to-head user experience comparison.
Koho is a financial technology company, and, I’ve got to say, its digital user experience is fantastic.
The ease-of-use of their card, their related app, their accounts, and money sending features are straightforward, efficient, and convenient. If you prefer to manage your finances on a desktop, they’ve got log-in options on their website, as well.
When it comes to customer service, you can conveniently chat with team members on the Koho app or shoot them an email, the traditional way. The FAQ section on their website is also extremely detailed should you run into any questions or troubles regarding their products.
Lastly, let’s consider security. The app gives you the option to immediately lock your card if you misplace it, which is excellent. In addition, it allows you to shop online with Mastercard’s user protection mechanisms securely and has your deposits secured by a federally regulated bank, Peoples Trust.
Tangerine is at the forefront of Canada’s digital banking. Thus, their digital user experience is also seamless and straightforward, as is their customer service.
With Tangerine, you have the option to bank through online banking (mobile or desktop), over the phone, or at the 3,500 Scotiabank ATMs located across the country.
They do also have an innovative branch in Toronto called the Tangerine Cafe, where customers can open accounts, apply for credit cards, or chat with representatives.
Because Tangerine’s got a more extensive client base, they also have excellent customer service options in place. This includes their automated telephone banking available 24 hours a day, seven days a week, their call centre, or their designated seniors call line.
Security-wise, Tangerine is very safe and trusted as well. They’ve got a plethora of security measures in place, such as 2-Step Authentication, SecureChip, and Zero Liability Policies. In addition, your Tangerine deposits are protected up to $100,000 under the Canada Deposit Insurance Corporation (CDIC).
The verdict of this section is a tie. Both of these companies do what they do in a fantastic way and have mastered their technologies to serve both their customers and their operations teams.
Tangerine naturally does have a more extensive network setup due to the larger capacity of their business. But at the end of the day, I feel confident in saying good things about the user experience of both of these platforms!
No, Tangerine is a Canadian bank that is a direct subsidiary of Scotiabank. It is headquartered in Toronto, Canada.
If you’re curious, CIBC’s digital-bank subsidiary bank is Simplii, not Tangerine. Like Tangerine, Simplii has no physical branches, but its users have access to CIBC’s ATM network.
Koho is not a bank, nor is it owned by a bank. However, it does have a partnership with Peoples Trust, a federally regulated banking institution in Canada. This institution ensures that the money in your KOHO prepaid Mastercard account is protected.
In the unlikely event that Koho goes under, this financial institution would be responsible for returning your deposits back to you, as well.
Koho and Tangerine are two inherently different companies. Koho is simply a personal finance management product coupled with a spending card, whereas Tangerine is a full-fledged bank offering much more than just chequing/saving accounts or credit cards.
With Tangerine, you can have access to products such as mortgages, loans or investment services.
When it comes to the overlap of services between Koho and Tangerine, however, my overall pick between the two would be Koho. I enjoy the simplicity and flexibility that are associated with this company, as well as the focus they have on financial health.
That being said, I’m still a big fan of Tangerine. I believe that Koho and Tangerine can hold different spaces within your personal finance journey. If you’re tech-savvy and prefer online banking, they can actually be great when used in conjunction with one another.
Depending on your needs, you might benefit from signing up for one or the other, or both.
- You’re looking for an easier way of managing your finances
- You want to up your saving and budgeting game
- Are ineligible or don’t want a full-fledged credit card but are interested in its benefits
- Want to build your credit score without the risks or high fees
- Are technologically-inclined
- Already have a main bank account that you can have for backup or turn to for additional services such as mortgages or loans
- You’re okay with not having a cheque book or the option to send wire transfers through this account
- You’re looking to replace your current high-fee bank with a digital, low-fee alternative
- Are technologically inclined
- Interested in having a cheque book or sending funds abroad through wire transfers
- Want to keep all of your finances in one place – cards, accounts, loans, investments, etc.
- You’re looking for both a new and innovative way to manage your money (Koho) and a new bank that can offer you more than just a card (Tangerine)
- You want the high-interest rate and flexibility of the Koho prepaid Mastercard card while having access to a full-fledged Mastercard card and other financial products.
I hope that this post was helpful for you in seeing the key differences and similarities between Koho and Tangerine.
If you like comparison posts, check out this recent post where I did a rundown of Questrade vs. Wealthsimple – Which One Should You Choose? Beware, the result may surprise you!