money management
Is KOHO Safe? CDIC, Trust Structure & Risk Explained (2026)
Last updated:
KOHO is the third-largest Canadian fintech by user count and frequently triggers the “is it safe?” question because it’s not a chartered bank. The short answer: KOHO is safe for typical use, with funds held in trust at a CDIC-member partner bank. Here’s the full breakdown.
What KOHO actually is (the structure that matters)
KOHO is a Canadian financial technology company, not a chartered bank. The corporate structure:
- KOHO Financial Inc. — the fintech operator. Issues the prepaid Mastercard, runs the app, manages user accounts.
- CDIC-member partner bank — holds customer funds in trust. KOHO’s specific partner is disclosed in their terms (Equitable Bank or similar).
- CDIC — provides $100,000 deposit insurance per depositor via the partner bank arrangement.
When you deposit $1,000 into KOHO, that money doesn’t sit on KOHO’s own balance sheet. It is transferred to the partner bank in a trust structure. Your CDIC coverage flows through the partner bank.
This structure is similar to Wealthsimple Cash but uses a single partner bank rather than splitting across multiple. The practical implication: $100K CDIC coverage at KOHO vs up to $1M at Wealthsimple Cash.
CDIC coverage: what’s actually protected
KOHO funds are eligible for CDIC coverage up to $100,000 through the partner bank trust:
- Personal accounts: $100,000
- The partner bank’s CDIC membership extends the coverage to your trust deposit
CDIC was created in 1967 to insure deposits at Canadian banks and trust companies. It has handled every Canadian bank failure since without depositor losses. The federal government backs CDIC.
What CDIC does NOT cover at KOHO:
- Funds in excess of the $100,000 limit at the partner bank
- USD balances (not relevant to KOHO since it’s CAD-only on the main product)
- Any non-deposit products (none currently — but be aware as KOHO adds features)
How KOHO compares to Big 5 banks for safety
| KOHO | Big 5 bank | |
|---|---|---|
| CDIC coverage | $100K via partner bank | $100K direct |
| Direct OSFI supervision | No (partner bank is) | Yes |
| Years operating | 12 (since 2014) | 100+ each |
| Capital base | VC-funded fintech (~$200M raised) | Trillions in assets |
| Branches | None | Many |
| Funds held in trust | Yes (separate from KOHO balance sheet) | Yes (banking trust law) |
| Major incident in last 3 years | No reported | No major |
The structural difference: Big 5 banks are themselves CDIC members and OSFI-regulated. KOHO uses a partner bank for both. For most users this is invisible; for high-balance holders, it can matter.
KOHO regulatory status
KOHO operates under multiple regulatory layers:
- Provincial consumer protection laws — covering disclosure, fees, complaint handling.
- FINTRAC — anti-money-laundering compliance (this is why KOHO asks for SIN and ID).
- Mastercard — payment-card network rules for the prepaid Mastercard.
- Partner bank’s regulators (OSFI) — indirectly, since the partner bank holds customer funds.
KOHO is NOT directly OSFI-regulated like a chartered bank would be. This is the most-cited gap by safety-conscious commenters. In practice, the partner-bank trust structure makes this less consequential than it sounds — the funds themselves are at an OSFI-regulated bank.
What can actually go wrong
Realistic risks I plan around:
- Account takeover — phishing, password reuse, SIM swap. Mitigation: 2FA on the KOHO app, unique password.
- App outage — KOHO has had brief service outages typical of fintechs. No funded losses reported.
- Service changes — KOHO has shifted features and tier pricing several times since 2020. Stay aware of changes that affect your fees and benefits.
- Subscription drift — easy to upgrade to a paid tier and forget about it. Review subscriptions periodically.
- Concentration above CDIC limit — keep individual KOHO balances under $100,000.
What I do NOT plan around:
- KOHO disappearing overnight. The company has $200M+ raised, 1.5M users, and is operationally stable. Even in a bankruptcy scenario, customer funds at the partner bank are legally segregated.
- The CRA confiscating KOHO funds. Funds in personal accounts are not subject to CRA seizure unless tax debt collection is involved (separate from KOHO’s status).
Comparison to other Canadian fintechs
| KOHO | Wealthsimple Cash | Neo Financial | |
|---|---|---|---|
| CDIC coverage | $100K via partner | Up to $1M (trust split) | $100K via partner |
| Years operating | 12 (2014) | 12 (2014) | 8 (2018) |
| Direct OSFI | No | No | No |
| User count (~) | 1.5M | 3M | 1M |
| Major incidents | None | Small 2023 breach | None reported |
All three are fintechs that use partner banks for fund custody. None are chartered banks themselves. Safety profiles are functionally similar; differences are at the margins (CDIC structure, user count, parent company).
My personal take
I have used KOHO since 2024 with balances ranging from $500 to $10,000. CDIC-covered, no incidents, no concerns at this level.
If I had $80,000 to park at KOHO, I’d be comfortable. At $200,000+, I’d split between KOHO and another CDIC-member institution to keep each within the limit. At $1M+, KOHO is not the right tool — Wealthsimple Cash’s $1M trust split, multiple bank deposits, or wealth management products are.
For typical use (daily spending, budgeting app, small Earn Interest balance), KOHO is safe. The partner-bank trust structure provides CDIC protection on the same terms as having an account at the partner bank directly.
Read next
- KOHO Review — full hands-on review
- KOHO vs Neo Financial — comparison with closest competitor
- Is Wealthsimple safe? — different structure, more coverage
- Is EQ Bank safe? — chartered bank alternative
Frequently asked questions
Is KOHO CDIC-insured?
Yes, indirectly. KOHO is not a chartered bank, but customer funds are held in trust at a CDIC-member partner bank, providing CDIC coverage up to $100,000 per depositor through the partner-bank arrangement. The exact partner bank is disclosed in KOHO's terms; verify on koho.ca for current arrangements.
Is KOHO a scam?
No, KOHO is a legitimate Canadian fintech founded in 2014. It has raised over $200M in venture funding from credible Canadian investors (including Power Corporation), has 1.5M+ users, and partners with CDIC-member banks for fund custody. It is regulated under Canadian payment services and consumer-protection laws.
What happens to my money if KOHO fails?
Customer funds are held in trust at a CDIC-member partner bank, separate from KOHO's own balance sheet. In a hypothetical KOHO failure, the partner bank still holds the funds. CDIC would cover deposits up to $100,000 per depositor through the partner bank if needed. The funds are legally not part of KOHO's bankruptcy estate.
Has KOHO ever been hacked?
KOHO has not had a publicly disclosed major security breach affecting customer funds as of 2026. Standard credential security (2FA, fraud detection) is in place. Account-level risk from password reuse and phishing applies to KOHO like any digital service.
Is KOHO safer than a Big 5 bank?
Big 5 banks are more conservatively positioned in extreme tail-risk scenarios due to larger balance sheets and direct CDIC membership. KOHO uses a trust structure with partner bank CDIC coverage. For typical balances under $100K, the practical safety is similar — your money is protected. The risk profile differs at the margins.
Is KOHO regulated?
KOHO is regulated under Canadian payment services and consumer protection rules. It is not a chartered bank, so it does not have OSFI prudential supervision. Its partner banks (which hold customer funds) are OSFI-regulated. KOHO is also subject to FINTRAC anti-money-laundering rules and provincial consumer protection rules.
Who owns KOHO?
KOHO is a privately held Canadian fintech. Major investors include Portage Ventures (Power Corporation's fintech arm), HOOPP, BMO Capital Partners, Drive Capital, and others. KOHO has raised over $200 million in venture funding through 2026. The company is headquartered in Toronto.
Can I trust KOHO with my paycheque?
Yes. KOHO supports direct deposit and millions of users do route their paycheques there. Funds are held in trust at a CDIC-member partner bank, providing the same end-state security as a typical bank account up to $100,000.
Is KOHO Credit Building safe?
KOHO Credit Building is a paid product ($7/month) that reports a tradeline to credit bureaus on your behalf. It's safe in the sense that it doesn't expose your savings — it's a service fee, not a credit product. The risk is paying for a service that may not improve your credit as much as a real credit card; manage expectations and read user reviews before subscribing.
Should I worry about my $50,000 in KOHO Earn Interest?
At $50,000 you're well within the $100,000 CDIC coverage limit through KOHO's partner bank. The protection is the same as having $50,000 at any single CDIC-member bank. For balances above $100,000, splitting across multiple CDIC institutions extends coverage.
Get started today
Open an account in 10–15 minutes. Both options below are commission-free for stocks and ETFs.
Wealthsimple Trade
Best for beginners — $0 commissions, $1 minimum, modern app.
$25 sign-up bonus when you fund $100
Open Wealthsimple Trade accountQuestrade
Best for active investors — free ETF buys, USD account.
Up to $250 cashback when you fund $1,000+
Open Questrade accountAffiliate links — we may earn a commission, at no extra cost to you. Read the full disclosure.