Deposit insurance
Deposit Insurance protects Canadians' savings in case a bank, trust company, loan company or cooperative association fails. Your should be aware that not all savings are covered, each insurer has their own coverage limits and rules. Deposit insurance does not protect against fraud, theft or scam.
When depositing your savings, you should make sure you understand which agency, if any, is providing deposit insurance, what are the coverage limits and any other rules that might be applicable.
Federal deposit insurance
Canada-wide the Canada Deposit Insurance Corporation (CDIC) provides deposit insurance. CDIC is a crown corporation and is governed by the Canada Deposit Insurance Corporation Act.
You do not pay CDIC for deposit insurance. CDIC member institutions pay premiums to CDIC.
What's covered
The CDIC site provides a very helpful reference, At a glance: What's Covered, What's Not Covered. CDIC’s coverage framework has a total of nine separately insured deposit categories at each member institution.[1]
A key point is that the CDIC limit is per person, per institution, not per account. Because your Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA) accounts are regulated and therefore considered separate from you, you get separate insurance limit on them. But all your Guaranteed Investment Certificates (GICs), high-interest savings accounts (HISA), cashable short-term certificates (also known as term deposits), etc., outside of registered accounts are lumped together for purposes of applying the limit.[2]
Effective April 1, 2023 separate coverage is available for for eligible deposits held in a First Home Savings Account (FHSA).[1]
If you are not sure if all your deposits are covered, try out CDIC's Coverage calculator.
CDIC members
Most Canadian chartered banks are CDIC members. So are Canadian loan companies and trust companies that take deposits, as well as associations governed by the Cooperative Credit Associations Act that take deposits.[3]
CDIC non-members
Some financial institutions that take deposits are NOT members of CDIC—for example, credit unions and caisses populaires, Canadian branches of foreign banks and some Canadian chartered banks. Your deposits with credit unions and caisses populaires may be covered by provincial deposit insurance programs. Canadian branches of foreign banks, and those Canadian chartered banks that are not CDIC members are required by law to inform you that they are not CDIC members and that your savings at such banks are not insured.[3]
Mergers
When CDIC members merge, savings stay covered by CDIC.
Your existing deposit insurance coverage does not change when one CDIC member buys another, or when two or more members join together to become one. Any money that you had deposited is still insured at the new member institution. But it is important to find out how depositing or withdrawing money from the new member will affect your CDIC coverage.[4]
Provincial deposit insurance
Your deposits with credit unions and caisses populaires may be covered by provincial deposit insurance programs. The following table shows the province deposit insurance programs.
| Province | Insurer and website link |
|---|---|
| Newfoundland and Labrador | Newfoundland and Labrador Credit Union Deposit Guarantee Corporation (CUDGC) |
| Nova Scotia | Nova Scotia Credit Union Deposit Insurance Corporation (NSCUDIC) |
| Prince Edward Island | Credit Union Deposit Insurance Corporation (CUDIC) |
| New Brunswick | New Brunswick Credit Union Deposit Insurance Corporation (NBCUDIC) |
| Quebec | Autorité des marchés financiers (AMF) |
| Ontario | Financial Services Regulatory Authority of Ontario (FSRA) |
| Manitoba | Deposit Guarantee Corporation of Manitoba (DGCM) |
| Saskatchewan | Credit Union Deposit Guarantee Corporation (CUDGC) |
| Alberta | Credit Union Deposit Guarantee Corporation (CUDGC) |
| British Columbia | Credit Union Deposit Insurance Corporation (CUDIC) |
See also
References
- ^ a b "Expanded deposit protection coming April 2023". cdic.ca. Retrieved March 31, 2023.
- ^ CDIC, How deposit insurance works, viewed November 28, 2021.
- ^ a b CDIC, List of members, viewed November 28, 2021.
- ^ CDIC, FAQ - What happens to coverage if two CDIC members merge?, viewed November 28, 2021.
Further reading
- Financial Wisdom Forum topic: "CDIC Insurance"
- Financial Wisdom Forum topic: "CDIC coverage confusion help"
- Financial Wisdom Forum topic: "clarifying CDIC coverage limits?"
