Jul 1, 2026
For more than a decade, Canadians looking to ditch Big Six bank fees have had one option: move your money to a fintech and accept that your deposits still technically sit at someone else’s bank. Koho Financial wants to end that compromise. On June 11, 2026, the Toronto-based company announced it had raised $130 million in a Series F funding round. This brings its total valuation to $1.33 billion, in what Koho called the final capital step needed to apply for a federal Schedule 1 bank license.
“It provides us all the capital we need to put on the balance sheet, which was kind of one of the last big things we needed to put in place,” CEO Daniel Eberhard told The Financial Post. The company describes itself as now “late in the final stages” of the licensing process.
What Koho has built so far and what it still cannot do
Launched in 2014, Koho today offers a prepaid Mastercard, a high-interest savings feature, a credit-building product, rent reporting, and a basic crypto offering through a partner. The company, which serves 2.5 million customers, has grown quickly, but still faces one important limitation.
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Because KOHO isn’t a bank, it cannot hold customer deposits itself. When you earn interest on a Koho account, your money is held in trust at a CDIC-member partner institution rather than directly with KOHO.
Koho is also not a direct member of the Canada Deposit Insurance Corporation (CDIC). The trust structure still provides deposit protection, but only for balances earning interest and only after you have activated the feature by providing your social insurance number.
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For most customers, it’s a minor difference. But if you use Koho as your primary banking account, the trust arrangement adds an extra layer behind the scenes that a bank license would remove.
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The advantages of a Schedule 1 bank license
Obtaining a Schedule 1 bank license under the Bank Act would significantly expand Koho’s capabilities. As a chartered bank, it could:
- Hold customer deposits directly on its own balance sheet
- Become a direct CDIC member, meaning eligible deposits would be insured up to $100,000 per category through Koho itself rather than through a partner institution
- Access lower-cost funding, potentially allowing it to offer more competitive savings rates and lending products
- Offer a broader range of loans and mortgages that it cannot legally originate today
With 250 employees, compared with thousands at each of the Big Six banks, Eberhard has argued that Koho’s lean operating model allows it to operate far more efficiently. With annual revenue now roughly $250 million, the company appears to have the scale it needs to support a regulated banking business.
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What OSFI’s new fast-track process could mean for the timeline
The timing may also be working in Koho’s favour. In June 2026, the Office of the Superintendent of Financial Institutions (OSFI) introduced a Targeted Fast-Track Framework to expedite the approval process for new fintech banks.
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Under the new framework, OSFI aims to provide initial feedback within four weeks, complete its risk-based review within 12 months, and then forward its recommendation to the Minister of Finance, who has up to three months to make the final decision.
That’s a dramatic improvement over the traditional process. Questrade, for example, spent six years navigating the regulatory system before receiving approval to launch Questbank in November 2025.
KOHO has already been working with OSFI since 2021 and entered the second phase of the licensing process in 2024. With the capital raise now complete and the new fast-track framework in place, KOHO could receive approval as early as this year, although the final decision still rests with the federal government.
How Koho Bank would differ from your current Big Six account
If approved, Koho Bank would enter a market in which a handful of large banks still control the vast majority of Canadians’ deposits.
For consumers, the biggest differences may include:
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- No monthly account fees, consistent with Koho’s current business model
- Direct CDIC deposit insurance without relying on a trust structure
- Expanded lending products, including personal loans and potentially mortgages
- Savings accounts and GICs designed to compete with online banks such as EQ Bank rather than traditional branch-based banks
What Koho wouldn’t immediately offer is the full infrastructure of a major Canadian bank. There would be no nationwide branch network, extensive business banking services, large mortgage portfolio, or decades-old institutional relationships.
For many Canadians, that means Koho would likely work best as either a primary everyday banking account or a complementary account alongside an existing relationship with one of the Big Six.
That said, consumers shouldn’t make financial decisions based on products that don’t yet exist. Koho’s license appears closer than ever, but it hasn’t crossed the finish line just yet.
What to do now
If you’re already a Koho customer, there’s no reason to make any immediate changes. A bank license could open the door to new lending products, simpler deposit insurance, and more competitive savings rates, but none of those benefits take effect until the license is officially approved and new products begin rolling out. In the meantime, it’s worth taking a few simple steps:
- Watch for announcements on new savings, lending, and deposit products as Koho moves through the approval process later this year.
- Compare Koho’s future savings and GIC rates with competitors such as EQ Bank and the Big Six before moving your money. A bank license doesn’t automatically mean the best rates.
- Confirm that future Koho Bank products are covered by direct CDIC membership rather than trust coverage through a partner institution, especially if you keep more than $100,000 in one insurance category.
- If you’re considering switching to a fintech for the first time, compare Koho’s fees, features, and savings rates with alternatives such as EQ Bank and Wealthsimple before you decide.
Canada’s banking landscape hasn’t changed much over the years, but that may finally be starting to shift. Whether Koho ultimately becomes Canada’s next chartered bank or not, one thing is already clear: fintechs are no longer just trying to compete with the Big Six; they’re trying to join them.
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Colin Graves is a Winnipeg-based financial writer and editor whose work has been featured in publications such as Time, MoneySense, MapleMoney, Retire Happy, The College Investor, and more. Before becoming a full-time writer, Colin was a bank manager for over 15 years.
