How is interest calculated?
So let’s say you have $1,000 at KOHO, you sign up to earn 1.2% interest (interest rate could vary depending on your tier), and you leave your $1,000 for 365 days.
Depending on your account type, if your interest rate is 1.2%, that means you will receive approximately $12 for the year (1.2%*1000). Keep in mind that interest is calculated daily and paid out monthly on the 5th. Therefore, you will receive approximately $1.02 monthly, which is expressed as the following (using January as an example): (31/365)*$12 = $1.02.
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?
Your interest will come in as a payment on your Feed on the 5th of the month. If the 5th falls on a weekend, your interest will be paid the following business day.
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. Just go to Monthly Statements, and click on the statement tagged Save.
Find out more about KOHO Save at https://www.koho.ca/save/ 💰