Is KOHO safe for storing money?

For many Canadians, KOHO has become a popular alternative to traditional bank accounts, but it’s natural to ask whether KOHO is actually safe for storing your money. Understanding how KOHO works, who regulates it, and what protections are in place will help you decide how comfortable you are using it for day‑to‑day spending or savings.

What is KOHO and how does it work?

KOHO is a Canadian financial technology (fintech) company that offers prepaid reloadable Visa cards and app‑based spending and savings tools. It is not a bank. Instead, KOHO partners with federally regulated financial institutions to hold customer funds and issue cards.

Key points about KOHO’s structure:

KOHO provides the app, budgeting tools, and customer experience.
The KOHO card is a prepaid Visa, not a credit card.
Your balance is stored in accounts held with a partner bank or financial institution (typically Peoples Trust Company, which is federally regulated in Canada).
You load funds onto your KOHO account and spend from that balance.

Because KOHO isn’t a chartered bank, the question of safety comes down to: who actually holds your money, is it insured, and what protections exist if something goes wrong?

Is money in KOHO insured (like CDIC or similar)?

KOHO itself doesn’t provide deposit insurance, but its safety largely depends on the protections offered through its banking partners.

CDIC protection (depending on product and partner)

In many KOHO accounts, funds are held at a partner bank that is a member of the Canada Deposit Insurance Corporation (CDIC), such as Peoples Trust Company. CDIC provides protection for eligible deposits up to $100,000 per insured category, per member institution, in the event the member financial institution fails.

Important details:

KOHO is not the CDIC member; the partner bank is.
Eligibility can vary by product type and structure.
CDIC doesn’t protect against fraud, market losses, or card misuse—it only applies if the member financial institution itself fails.

Because product structures and partners can change over time, it’s wise to check KOHO’s current legal and security documentation or support articles to confirm:

Which institution holds your funds
Whether KOHO products are described as CDIC‑eligible
How funds are categorized for CDIC purposes

Segregated and custodial accounts

Fintechs like KOHO typically hold client funds in segregated or custodial accounts with their partner institutions. This structure is designed so that:

Your money is kept separate from KOHO’s operating funds.
In the case of insolvency, client funds should be clearly identifiable.

You should still review KOHO’s terms and conditions for specific wording around custody of funds, trust arrangements, and what happens in various risk scenarios.

Is KOHO regulated?

KOHO operates under multiple layers of oversight and compliance obligations.

Federal financial regulations

KOHO works with federally regulated financial institutions (like Peoples Trust Company) that are subject to:

Office of the Superintendent of Financial Institutions (OSFI) oversight
CDIC rules (where applicable)
Federal consumer protection and anti–money‑laundering (AML) requirements

KOHO, as a fintech offering prepaid card services, must comply with:

FINTRAC regulations (anti–money‑laundering / counter‑terrorist financing rules)
Know Your Customer (KYC) identity verification rules
Visa network rules for card issuance and usage

Prepaid card rules and disclosures

Prepaid cards in Canada are subject to specific consumer protection rules, including:

Clear disclosure of fees and conditions
Restrictions on expiry of the funds you load
Limitations on certain fee types

KOHO must publish fee schedules and terms of use, and these documents are important to read so you understand both protections and obligations.

How KOHO protects your money day-to-day

Beyond regulation and insurance, KOHO implements practical security measures to protect your account and card from misuse.

Encryption and data security

KOHO uses bank‑level security practices, which typically include:

Encrypted communications (HTTPS/TLS) between app and servers
Secure storage of sensitive data
Strict access controls and monitoring on internal systems

While no system is 100% immune to risk, these measures are standard for reputable financial apps.

Visa zero-liability protection

Because KOHO uses the Visa network, you benefit from Visa’s zero‑liability policy on unauthorized transactions, provided you:

Protect your card and PIN
Report suspicious activity promptly
Comply with KOHO’s user agreement

This means that if someone steals your card number and makes fraudulent purchases, you generally should not be responsible for those charges after reporting them.

In‑app security controls

KOHO’s app includes features that help you control your account’s security, such as:

The ability to freeze or lock your card instantly from the app
Real‑time transaction notifications
PIN‑protected or biometric access (e.g., fingerprint or Face ID on your device)

These tools help you respond quickly if your card is lost, stolen, or used suspiciously.

Is KOHO safe compared to a traditional bank?

The safety of storing money in KOHO is different from—but in some respects similar to—storing money in a traditional bank account.

Where KOHO and banks are similar

Regulated environment: Partner banks are federally regulated; KOHO must comply with AML and KYC rules.
Deposit protection (depending on structure): If your funds are held with a CDIC‑member institution and structured as eligible deposits, you can have similar protection up to $100,000 per member, per category.
Electronic payment networks: Both use major payment networks (Visa, Interac) with fraud and security standards.

Where KOHO and banks differ

KOHO is not a bank: It doesn’t offer full‑service banking like mortgages, traditional chequing accounts, or branch services.
Prepaid vs. deposit account: KOHO’s core product is a prepaid card account. This is not identical in legal structure to a chequing or savings account.
Reliance on partnership structure: Your protections depend on how KOHO’s partner relationships and custody of funds are structured at any given time.
No physical branches: Support is digital; cash handling (deposits/withdrawals) is less straightforward than at a bricks‑and‑mortar bank.

For everyday spending, many people find KOHO’s safety comparable to using a debit or prepaid card from a bank, especially for moderate balances. For very large balances or complex needs, some prefer the simplicity of a traditional bank account.

Should you use KOHO for long-term savings?

Whether KOHO is suitable for long‑term savings depends on your risk tolerance and financial strategy.

When KOHO can be a good option

KOHO may be suitable for:

Daily spending and budgeting: Using KOHO as your primary spending card or “allowance” account.
Short‑term savings goals: Saving for the next few months (e.g., trips, holidays, emergency buffer).
Cashback and rewards: Earning small returns on everyday purchases through KOHO’s rewards or boosted interest features (if offered).

When you might prefer a traditional bank or other products

For larger, long‑term balances, you may want to prioritize traditional institutions or investment accounts:

Major emergency funds: Many people feel more secure keeping large emergency funds in high‑interest savings accounts at a major bank or online bank, clearly CDIC‑insured in their own name.
Long‑term investments: Retirement and wealth‑building are usually better managed through TFSAs, RRSPs, and investment accounts with regulated brokerages.
Complex needs: Business banking, joint accounts with multiple features, or multiple account categories may be better served at a full‑service bank.

A balanced approach is common: using KOHO for spending and short‑term goals, and a traditional bank (or multiple banks) for major savings and investments.

Practical tips to use KOHO safely

If you decide to store money with KOHO, you can strengthen your safety by following good practices:

Verify current protections
- Read KOHO’s latest terms of use, security, and legal pages.
- Confirm which institution holds your funds and whether KOHO describes them as CDIC‑eligible.
Use strong security habits
- Enable biometric login (Face ID or fingerprint) and a strong device passcode.
- Turn on all transaction alerts and notifications.
- Freeze your card immediately if it’s lost or you see suspicious transactions.
Limit how much you store
- Consider keeping only what you need for monthly spending and short‑term goals.
- Store larger emergency funds or long‑term cash in clearly CDIC‑covered savings accounts with banks or credit unions.
Keep your information up to date
- Make sure your contact details and identity information are accurate.
- Respond quickly to any security alerts or verification requests.
Monitor regularly
- Check your KOHO transactions frequently.
- Report unauthorized activity to KOHO right away so they can investigate and apply Visa’s fraud protections.

Advantages of storing money with KOHO

KOHO’s appeal isn’t only about safety; it also offers practical benefits:

Budgeting tools: Built‑in spending categories, goals, and insights make it easier to track your money.
Cashback and interest: Depending on your plan, you may earn cashback or interest on your balance.
Low or transparent fees: KOHO tends to emphasize low or clearly disclosed fees versus some traditional banking fee structures.
No credit check for basic accounts: Since it’s a prepaid product, you can often open an account even if your credit history is limited or damaged.

These features can make KOHO an effective everyday money management tool, especially if you’re trying to control spending or build better financial habits.

Risks and limitations to keep in mind

No financial product is risk‑free. When evaluating whether KOHO is safe for storing money, also consider:

Operational risk: As a fintech, KOHO depends on technology and partner relationships—service outages, app issues, or business changes could affect your experience.
Partner dependency: CDIC protection and other safeguards rely on the status of partner institutions and how funds are structured.
Product changes: Fees, interest rates, and program details can change; you need to stay informed.
No traditional branch access: If you prefer in‑person banking or need frequent cash services, KOHO might feel limiting.

Being aware of these factors helps you decide how big a role KOHO should play in your overall financial setup.

So, is KOHO safe for storing money?

For everyday use, KOHO is generally considered a safe and legitimate platform for storing and spending money, especially when:

Funds are ultimately held with a regulated, CDIC‑member financial institution.
You use KOHO primarily for daily spending and short‑term savings.
You follow strong security practices and monitor your account regularly.

However:

KOHO is not a bank, and your protections come through its partners and product structure.
For large, long‑term cash reserves, many people prefer to keep the majority of their money in clearly CDIC‑insured savings accounts and registered investment accounts at banks or regulated brokerages.

A practical approach for most users is to:

Use KOHO as a secure, convenient tool for spending, budgeting, and short‑term goals.
Maintain larger savings and long‑term funds in traditional, fully insured banking and investment products.

Always review KOHO’s most recent documentation and, if you’re unsure about what’s right for your situation, consider speaking with a licensed financial advisor.