KOHO Removes Essential Account from Its Lineup

Online bank KOHO is retiring the Essential Account from its lineup of high interest bank accounts and accompanying credit cards. The bank's offerings now include the no-monthly-fee KOHO Core Account and higher-tier Extra and Everything accounts, offering higher interest rates, more cash back, and other benefits.

In addition to discontinuing the Essential Account, the Core Account will no longer include free Secured Credit Building. Instead, you can purchase this feature as an add-on for a small fee.

Why is the KOHO Essential Account being retired?

The Essential Account – which includes the KOHO Essential Mastercard – was KOHO's entry-level offering, but the company recently launched the KOHO Core Mastercard, which offers many of the same advantages as Essential, only with no monthly fees.

This left the Essential Account without a clear purpose in the lineup. KOHO decided to simplify its offerings, making it easier for customers to choose the account that works best for them.

What about customers who already have an Essential Account?

Customers who already have an Essential Account will keep their accounts under the existing terms.

Launching a new entry-level account under a different name – instead of simply changing the terms of the Essential plan – allowed KOHO to offer something new without affecting existing account holders.

Differences between KOHO Essential and Core Accounts

The main features of the new Core Account are very similar to the old Essential Account. Both offer:

• 2% interest on your balance
• 1% cash back on common everyday purchases
• A prepaid Mastercard

The main difference is that the Core Account has no monthly fees, whereas the Essential Account was $7 per month – unless you meet a few eligibility requirements to have the fee waived.

Secured Credit Building no longer free

When it was first launched, the KOHO Core Mastercard offered a free Secured Credit Building service. It provided a secured line of credit that account holders could use to boost their credit scores using the money in their own accounts.

KOHO still offers this service, but it will now charge account holders a small fee to use it.

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FAQ

How are KOHO's accounts changing?

KOHO is retiring its Essential Account (and accompanying Mastercard), leaving its Core Account as its entry-level offering. The Core Account offers many of the same benefits as the Essential Account but with no monthly fee. Essential is being discontinued for new clients only – current Essential Account holders won't be affected.

Is KOHO's Secured Credit Building service still free?

No, not anymore. KOHO's Secured Credit Building service was free for Core Account holders at launch, but it now comes with a small fee. The service itself is still available, so you can keep building your credit, but you'll need to pay to access it.

Is there a monthly fee for the KOHO Core Account?

No – the KOHO Core Account (and accompanying Mastercard) doesn't have a monthly fee. The former Essential Account only waived this fee if you set up direct deposit or added at least $1,000 every month. The Extra and Everything Mastercards still charge a monthly fee but offer higher interest rates, more cash back, and other benefits.

How much interest do I earn with a KOHO Core Account?

The KOHO Core Account offers 2% interest on every dollar in your account. This is the same rate that the Essential Account offered, but the Core Account has no monthly fees, no minimum monthly deposit, and no requirement to set up direct deposit. The KOHO Extra Mastercard offers 2.5%, and the KOHO Everything Mastercard offers 3.5%.

How much cash back does KOHO Core Account offer?

The KOHO Core Account offers 1% cash back on everyday purchases, such as groceries, dining out, and transportation – which is the same as what the Essential Account used to offer. The KOHO Extra Mastercard offers 1.5% on these same categories, and the Everything Account offers 2%.