Are Interac e-Transfers Safe?

You're about to send money to a friend for dinner, and that little voice in your head whispers: "Is this actually safe?" If you're new to e-transfers or just want to understand how secure they really are, you're asking the right questions.

As a KOHO user, you deserve to know exactly what happens to your money when you hit "send"—and why e-transfers are actually one of the safest ways to move money in Canada.

What actually happens when you send an e-transfer

Here's the reality: your money never travels through email or text messages. When you send an e-transfer, you're essentially telling your bank to move money from your account to someone else's account. The email or text is just a notification.

Think of it like this: imagine you put $50 in a secure locker at the bank, then text your friend the locker combination. The money stays safely locked up until your friend goes to the bank and opens it. That's basically how e-transfers work, except everything happens digitally and instantly.

The multi-layered security fortress protecting your money

Interac built multiple layers of security that work together to protect your cash:

Layer 1: Bank-Grade Encryption

Every e-transfer is protected with the same military-level encryption that banks use for their most sensitive data. This means your transaction details are scrambled into code that would take hackers thousands of years to crack.

Layer 2: Two-Step Authentication Process

To receive an e-transfer, the recipient must first log into their online banking (username and password), then answer a security question that only you and they know. It's like having two different locks on the same door.

Layer 3: Direct Bank-to-Bank Transfer

The actual money moves directly between financial institutions through secure banking networks. No third-party companies handle your cash, and it never sits in some random company's account.

Layer 4: 24/7 Fraud Detection

Sophisticated monitoring systems watch for unusual patterns and automatically flag suspicious activity. If something looks off, the transaction gets stopped before any money moves.

Why e-transfers are safer than you think

Here's a fact that might surprise you: 1 million Interac e-Transfer transactions happen successfully every single day in Canada. With that volume, if e-transfers weren't secure, we'd be hearing horror stories constantly.

Instead, fraud rates remain extremely low.

The security track record speaks for itself:

• Bank-grade protection standards

• Direct institutional transfers (no middleman risk)

• Regulated by Canadian financial authorities

• Backed by decades of banking security expertise

The Autodeposit

Autodeposit is like having a VIP pass for e-transfers. When someone registers their email or phone number for autodeposit, money gets deposited automatically into their account without needing security questions or manual acceptance.

Why autodeposit is actually more secure

Counterintuitively, removing the security question step makes e-transfers safer, not riskier:

• No security questions to intercept: Hackers can't steal an answer that doesn't exist

• Direct deposit into verified accounts: Money goes straight to the registered account

• Eliminates human error: No typing wrong answers or forgetting questions

• Faster deposit means less exposure time: Money isn't sitting in digital limbo

Major Canadian banks actively recommend autodeposit specifically because it reduces security risks while making transfers more convenient.

What you actually need to worry about

While e-transfers themselves are incredibly secure, the biggest risks come from human behavior, not technical flaws:

Threat #1: Phishing Scams and Fake Notifications

Criminals send fake emails that look like e-transfer notifications, trying to trick you into entering your banking information on fraudulent websites.

How to Stay Safe:

• Never click links in emails claiming to be from your bank

• Always log into your banking app or website directly

• Your bank will never ask for passwords via email

Threat #2: Weak Security Questions

Using security questions with obvious answers (like your pet's name that's all over Instagram) makes it easier for scammers to guess.

Better Approach:

• Use autodeposit when possible to eliminate security questions entirely

• If you must use security questions, make answers impossible to guess from social media

• Never include the security answer in the transfer message

Threat #3: Sending Money to Strangers

E-transfers are designed for people you know and trust. Sending money to strangers—even for seemingly legitimate purchases—opens you up to fraud.

Golden Rule:
Only send money to people you know and trust, the same way you would with cash.

How KOHO keeps your e-transfers extra safe

As a KOHO user, you get additional security layers on top of Interac's already robust system:

Real-Time Transaction Alerts

KOHO sends instant notifications for every transaction, so you know immediately if something unusual happens with your account.

Easy Account Controls

Through the KOHO app, you can instantly freeze your card or restrict certain types of transactions if you suspect any security issues.

No Hidden Vulnerabilities

KOHO's transparent approach means no surprise fees or hidden processes that could compromise your financial security.

The government backing that protects your money

Your e-transfers aren't just protected by bank security—they're backed by Canadian government regulations and oversight:

Canada Deposit Insurance Corporation (CDIC) Protection

While e-transfers themselves aren't insured, the money in your KOHO account is protected by CDIC insurance up to $100,000 per depositor*.

Regulated Financial System

Canadian banks and financial institutions operate under strict government oversight, with regular audits and compliance requirements that ensure security standards remain high.

Consumer Protection Laws

Canadian law provides additional protections for electronic transactions, giving you recourse if something does go wrong.

When NOT to send an e-transfer

Avoid E-Transfers For:

• Online marketplace purchases from strangers

• "Investment opportunities" from people you don't know

• Anyone asking you to send money before receiving goods/services

• Requests that seem urgent or pressure you to act immediately

• Anyone who asks you to send the security answer via text or email

Safe E-Transfer Situations:

• Splitting dinner bills with friends

• Paying family members

• Sending money to your own accounts at different banks

• Paying trusted service providers who use autodeposit

What happens if something goes wrong?

While e-transfer fraud is rare, Canadian banks have established procedures to protect customers:

Unauthorized Transaction Protection

Major banks like RBC offer digital banking security guarantees that fully protect you against transactions you didn't make or approve.

Investigation Process

If you report suspicious activity quickly, banks investigate and typically reverse fraudulent transactions while they conduct their review.

Time Limits Matter

Report any suspected fraud immediately—the faster you act, the better your chances of recovering any lost funds.

Your e-transfer safety checklist

Before sending your next e-transfer, run through this quick safety checklist:

✓ Know the recipient personally: Never send money to strangers
✓ Use autodeposit when possible: Eliminates security question vulnerabilities
✓ Log in directly: Always access your banking through official apps/websites
✓ Double-check the amount: Make sure you typed the right number
✓ Verify the recipient's email: One wrong letter sends money to the wrong person
✓ Keep records: Screenshot successful transfer confirmations

E-transfers are incredibly safe when used properly

The data is clear: e-transfers are one of the safest digital payment methods available in Canada. With bank-grade encryption, multi-factor authentication, direct institutional transfers, and constant fraud monitoring, your money is well-protected.

The key word is "when used properly." Follow basic safety practices—send money only to people you know, use autodeposit when possible, and stay alert for phishing attempts—and e-transfers are as safe as walking into a bank branch.

When you understand how the security works and follow basic safety practices, e-transfers become a powerful, safe tool for managing your money.

* When you opt in to Earn Interest, your funds are placed in trust with one or more CDIC member institutions. Funds held in trust by CDIC member institutions are eligible for CDIC protection of up to $100,000 per beneficiary, per member institution, if the member institution were to fail. For more info on CDIC coverage please check out cdic.ca. KOHO Accounts not earning interest are not eligible for CDIC protection.