Canada Deposit Insurance Corporation

Canada Deposit Insurance Corporation

Protecting your deposits

The Canada Deposit Insurance Corporation (CDIC) is a federal Crown corporation. It was created in 1967 to protect the money you deposit in CDIC’s member financial institutions in case of their failure.

What does Canada Deposit Insurance Corporation insure?

CDIC insures eligible deposits you make with its members. However not all deposits and investments offered by the members of CDIC are insurable. The insurable deposits include:

• Saving accounts and checking accounts.
• Term deposits, such as guaranteed investment certificates (GICs) and debentures issued to evidence deposits by member institutions (other than banks).
• Money orders, travellers’ cheques and bank draft issued by CDIC members and cheques certified by CDIC members.
• Accounts that hold funds to pay realty taxes on mortgaged properties.

To be eligible for deposit insurance protection, your deposit must be payable in Canada and in Canadian currency. Term deposits must be repayable no later than five years after the date of the deposit.

CDIC does not insure:

• Foreign currency deposits, for example, accounts in U.S. dollars.
• Term deposits with a maturity date of more than five years from the date of deposit.
• Debentures issued by banks, trust companies or cooperative credit associations.
• Bonds of debentures issued by governments and corporations.
• Treasury bills.
• Investments in mortgages, stocks or mutual funds.

Maximum insurance protection

Basic protection: The maximum basic protection for eligible deposits is $100, 000 (principal and interest combined) per deposit in each CDIC member institution. Deposits are not insured separately if made at different branch offices of a member.

Separate Protection:

CDIC insures eligible deposits separately in each of the following cases:

• Savings held in one name;
• Savings held in more than one name (joint deposits);
• Savings held in registered retirement savings plans (RRSPs);
• Savings held in tax-free savings accounts (TFSAs);
• Savings held for paying realty taxes on mortgaged properties.
• You are responsible for ensuring that the member institution’s record include all information required for the separate protection of these deposits.

Joint Deposits

Deposits you own jointly with someone else are insured separately from deposits in your own name, provided that the records of the member institution:

• Indicate the deposits are owned jointly;
• Include the name and address of each joint owner.

A Canadian investor. Photo by Elena

Trust Deposits

Deposits held in trust are insured separately from deposits owned personally by the trustee or the beneficiary (ies) provided that the trustee has disclosed for inclusion in the records of the member institution the following information:

• State that the deposit is held in trust;
• Identify the name or the names and addresses of the trustee(s)
• Identify the names and addresses of the beneficiary (ies).
• If a trust deposit is held for more than one beneficiary, the dollar amount or percentage owned by each beneficiary must be identified on the CDIC member’s record each year as of April 30. Each beneficiary’s share then is insured up to $ 100,000.

Registered Plans

CDIC does not insure all investments held in registered plans. To be insurable, deposits must be held in a savings account, in GICs or other term deposits with an original term to maturity of five years or less, or in debentures issued to evidence deposits by members (other than banks), with an original term to maturity of five years or less, and must be payable in Canadian currency.

• Your maximum deposit insurance for all eligible deposits held by you in RRSPs with the same CDIC member is $ 100,000 (principal and interest combined);
• Your maximum deposit insurance for all eligible deposits held by you in RRIFs with the same CDIC member is $ 100,000 (principal and interest combined);
• Contributions you make to an RRSP or a RRIF plan for your spouse or common-law partner are combined with other deposits held in an RRSP or a RRIF in the same name of your spouse or commn-lawe partner with the same CDIC member, not with deposits in your own RRSPs or RRIFs.
• Your maximum deposits insurance for all eligible deposits held by you in TFSAs with the same CDIC member is $100,000 (principal and interest combined).
• Your maximum deposit insurance for all eligible deposits held by you in Registered Disability Savings plans (RDSP) with the same CDIC member is $100, 000 (principal and interest combined).
• Your maximum deposit insurance for all eligible deposits held by you in Registered Education Savings Plans (RESP) at the same CDIC member that are structured as a trust is $100,000 (principal and interest combined). Eligible deposits held in RESPs that are not structured as trusts are not separately insured, but fall under the basic coverage. You can ask your CDIC member whether your RESP is structured as a trust.
• You may be eligible for additional coverage if you have two or more of the same type of registered plan, depending on how those plans are set up.

Grenoble street in Laval, Quebec, Canada. Photo by Elena

What happens if a member institution fails?

It is not necessary to file a claim with CDIC.

CDIC will communicate with the depositors of the failed member institution to advise how and when they will receive payment.

Payments are made as soon as possible.

The payment(s) will include principal and interest up to $100,000.

No insurance is payable on interest earned on a deposit after the date the CDIC member failed.

To avoid collapsing registered plans, CDIC transfers the insured funds to another member.

How is deposit insurance funded?

CDIC’s member institutions fund deposit insurance through premiums paid on the insured deposits that they hold. If required, CDIC is authorized to borrow additional funds, which CDIC repays with interest.

For more informationm for a list of member institutions and for other rules on deposits insurance, please visit CDIC’s Website at sdic.ca.