If you've opted-into earning 1.2% interest on your KOHO account, read more about how interest is calculated below.
How is interest calculated?
So let’s say you have $1,000 at KOHO, you sign up to earn 1.2% interest, and you leave your $1,000 for 365 days.
The annual 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.
Could the interest rate change?
We want to be clear that the 1.2% interest rate we are offering will not be an introductory rate, or a rate that expires. The same rate will be available to all users, new or existing. For transparency, it’s possible that the interest rate could change if the rates made available by our Service Providers change. This could happen, for example, if the Bank of Canada announces an interest rate decrease or increase.
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/ 💰