Is KOHO Safe? Where Your Money Sits, and When It's Insured

If you’re asking whether KOHO is safe before you sign up, the short answer is yes. The company has been running since 2014, it serves more than 2.5 million Canadians, and it holds federal registrations you can look up yourself in about a minute.

One detail is worth a couple of minutes, though, because most reviews of KOHO either skip it or get it wrong. KOHO isn’t a bank, so your balance doesn’t sit at KOHO. It sits at a bank KOHO partners with, and the deposit insurance attached to it switches on with a setting inside the app. Here’s how that actually works, and what it would mean on the day it mattered.

Is KOHO a bank?

No. KOHO is a federally incorporated financial technology company, and it isn’t a regulated deposit-taking institution, so it can’t hold deposits in its own name. Only a bank, trust company or credit union can. Its card is a reloadable prepaid Mastercard issued by KOHO Financial Inc. (opens in a new tab), and KOHO’s own security page describes a partner bank holding the funds rather than KOHO holding them.

The licence it’s working on

KOHO has spent years applying for a Schedule I banking licence, and raised $130 million in June 2026 at a $1.33 billion valuation partly to fund that push, as fintech.ca reported (opens in a new tab). A Canadian bank licence is granted by the Minister of Finance on the recommendation of the Superintendent, and no decision date is public. So it’s a genuine ambition, not a current fact, and the honest way to read KOHO today is as a company that works with a bank.

What that means day to day

Very little. Your card works, your direct deposit lands, your balance earns interest. The distinction shows up in one place only, which is where the money physically sits and who insures it if something goes wrong. That’s the rest of this page.

Where does your money actually sit?

At Peoples Trust Company, not at KOHO. KOHO’s security page (opens in a new tab) says it has “partnered with Peoples Trust, a federally regulated bank, to safeguard your funds,” and Peoples Trust Company appears on CDIC’s list of member institutions (opens in a new tab). Your balance is held in trust there, which is a specific legal arrangement with specific consequences.

The setting that switches coverage on

KOHO states this plainly on its own interest rates page (opens in a new tab): “KOHO Accounts not earning interest are not eligible for CDIC protection.”

So the protection doesn’t arrive with the account. It arrives when you opt into Earn Interest, at which point KOHO places your funds in trust with one or more CDIC member institutions and they become eligible for coverage up to $100,000 per beneficiary, per member institution. Earn Interest is available on Essential, KOHO’s no-fee plan, at 2%. If you already have a KOHO account and have never touched that setting, that’s the single most useful thing on this page.

What “held in trust” actually means

CDIC insures trust deposits separately from other categories, up to $100,000 per beneficiary per member institution, on two conditions: a valid trust exists under provincial law, and information about the trustee and the beneficiaries is disclosed on the member institution’s records before any failure. Those conditions come from CDIC’s own rules on deposits held in trust (opens in a new tab), and KOHO is the trustee in that arrangement.

It’s real protection, and it’s the same $100,000 you’d have at a bank. It is not the same thing as membership, though. KOHO doesn’t appear on the CDIC member list, and its own pages describe the trust arrangement rather than membership.

What happens if KOHO itself fails?

Deposit insurance answers a narrower question than most people assume. CDIC pays out when one of its member institutions fails. Peoples Trust Company is the member in this arrangement, so if Peoples Trust failed, eligible balances held in trust for KOHO users would be covered up to $100,000 each.

KOHO failing is a different event, and CDIC doesn’t cover it. The trust structure is what’s meant to protect you there. That’s the general point of a trust: the money isn’t the trustee’s property, and it’s already sitting at Peoples Trust rather than on KOHO’s own books. You’d be waiting on an administrator to sort it out and return it, which is slower and less tidy than a CDIC payout, and still a long way from losing the money.

Keep that in proportion. This is the standard structure for Canadian fintechs that aren’t banks, and Wealthsimple runs on the same one at a larger scale. It isn’t a KOHO quirk. We covered the general mechanics in our guide to CDIC deposit insurance in Canada if you want the full picture.

Who regulates KOHO?

Three federal bodies have KOHO on their books, and none of them is a banking regulator, because KOHO isn’t a bank. Each keeps a public record you can check without taking anyone’s word for it.

• FINTRAC registers KOHO as a money services business, number M15656297, first approved in July 2015 and current to January 2027. Search the money services business registry (opens in a new tab) and you’ll find the same number KOHO prints on its security page.
• The Bank of Canada has registered KOHO as a payment service provider under the Retail Payment Activities Act since October 6, 2025, and its public registry (opens in a new tab) records no violations against the company. The Bank is careful to say registration isn’t an endorsement, only proof the legal requirements were met.
• Payments Canada admitted KOHO as a member on January 27, 2026 (opens in a new tab), alongside Wise, Float, Brim and Paramount Commerce, which puts it in line to use the national payment systems directly.

OSFI doesn’t appear on that list, because it regulates banks and KOHO isn’t one. It does regulate Peoples Trust, which is the institution actually holding the money.

What KOHO does well, and what to watch

The strongest thing about KOHO’s safety record is how ordinary it is. It registered everywhere it was supposed to, and has been moving toward more oversight rather than less: the Bank of Canada registration in 2025, Payments Canada membership in 2026, a bank licence application running underneath both. Its investor list runs through Drive Capital, Portag3, TTV Capital, HOOPP, Round13 and BDC (opens in a new tab), the last of which is a federal Crown corporation. On the account itself, KOHO offers two-factor authentication, biometric sign-in, instant card locking, Mastercard Zero Liability on the prepaid card, and says it encrypts stored data with AES-256 and holds SOC 2 Type 2 certification.

Four things are worth knowing before you open one, and none of them is a reason to walk away:

• The headline 3.5% rate needs the top paid plan. Essential pays 2%, and it carries no monthly fee only if you set up direct deposit or move $1,000 a month through it. Otherwise it’s $4 a month.
• It’s a prepaid card account, not a chequing account. That’s a legal distinction more than a practical one, and it’s the reason the custody question exists at all.
• The bank licence isn’t granted. If it comes through, KOHO would hold deposits directly and become a CDIC member itself. Until then, everything described above is what applies.

The one incident on the record

A transfer bug running between July 2019 and March 2020 credited both sides of some account-to-account transfers, and about 30 users exploited it for roughly $1.05 million before KOHO caught it on March 5, 2020. The Globe and Mail reported (opens in a new tab) that KOHO fixed it within hours, told its board and investors the same day, brought in outside auditors, and said no customer funds or data were affected because the exposure was to its own operating capital. That’s the whole public record, and it’s six years old.

If you’re weighing KOHO against other Canadian options rather than deciding whether to trust it, we compared the field in KOHO alternatives in Canada.

Where Lodavo fits

Lodavo publishes this site and makes a prize-linked savings app. We don’t hold deposits, and KOHO doesn’t pay for placement here.

That first part is why the custody question on this page lands differently for us. Lodavo rewards you for saving in the savings account you already use: the more you set aside, the more free tickets you earn in a weekly draw. Your savings never leave your own account, so whatever deposit insurance they already have carries on untouched. If you want that checked the same way, we wrote an honest look at whether Lodavo is safe and legit, and the technical details live on our security page.

So, is KOHO safe?

Yes, on the evidence a person can actually verify. KOHO is a real Canadian company with a decade of operating history, federal registrations anyone can look up, no recorded violations, and a partner bank that’s a CDIC member. It’s also candid on its own website about the things that matter.

So do one thing before you close this tab. Open the app, switch on Earn Interest, and the $100,000 you probably assumed you already had will actually be there.

Terms and conditions apply. No purchase necessary (alternate method of entry available). Skill-testing question required. Open to legal residents of Canada who are the age of majority. Odds depend on the number of eligible entries received. Full rules and odds at our contest rules.