How is interest calculated?
So let’s say you have $1,000 at KOHO, you sign up to earn 3.5% interest (interest rate could vary depending on your account), and you leave your $1,000 for 365 days.
Depending on your account type, if your interest rate is 3.5%, that means you will receive approximately $35 for the year (3.5% * 1000). Keep in mind that interest is calculated daily and paid out monthly on the 6th. Therefore, you will receive approximately $2.96 monthly, which is expressed as the following (using January as an example): (31/365) * $35 = $2.96.
Each month you will receive slightly more interest, thanks to the monthly compounding 💸
The interest is earned on your entire KOHO balance - so this includes Vault!
When is interest paid?
Interest is calculated daily and paid monthly, deposited directly into your KOHO account on the 1st of each month. Depending on your time zone, the interest may appear in your account either on the last day of the month or the first day of the following month.
For example, your October interest might be deposited on either October 31st or November 1st.
Is the interest I earn considered income?
Yes, and you will likely have to pay income tax on the interest you earn from this feature. Each year, we will send you a return of investment income slip (T5) to be submitted along with your personal income tax return. A T5 shows how much investment income you earned for a given tax year.
You can also review the interest you earned each month by going to your statements. In order to view your statements, just open your KOHO app, tap on the profile icon in the upper left corner and tap on Monthly Statements!
*Just a heads up, Earn Interest is only available for Personal Accounts. In order to enjoy these benefits, be sure you're using your Personal card!*