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What is CDIC Insurance?

Written by Preet Banerjee

Friday, July 19th, 2019

In Canada, eligible deposits (like savings accounts, GICs, money orders, and more) can be covered by something called “CDIC Insurance" if the issuing financial institution is a Canada Deposit Insurance Corporation member. This special insurance protects your money in case that member institution goes out of business.

According to Canada Deposit Insurance Corporation: “Since its creation by Parliament in 1967, CDIC has handled 43 bank failures, affecting more than 2 million depositors. No one has lost a single dollar of insured deposits."

What is CDIC?

CDIC stands for Canadian Deposit Insurance Corporation. It's a Crown corporation, which means it's owned by the Canadian government. It was created to provide deposit insurance to depositors in Canadian commercial banks and savings institutions that are members.

What is CDIC Insurance?

Under this coverage, if a CDIC member institution were to fail, any money you held in eligible deposits they could not return to you would be given back to you, up to certain limits.

For example, if you had $10,000 in a savings account at a CDIC member institution that went out of business and they could only give you $5,000, the insurance would cover the shortfall. You'd be issued a cheque within days of failure of the institution.

You don't have to apply for the insurance, or make a claim. As long as your financial institution is a member, your eligible deposit is automatically covered.

How Much of Your Money is Covered?

You're covered for up to $100,000 of eligible deposits per insured category, and per member institution you deal with. In other words, it's possible to be covered for more than $100,000 of eligible deposits from the same member institution.

Note: Eligible deposits must be in Canadian dollars.

Currently, Eligible Deposists Include: 

  • Savings accounts
  • Chequing accounts
  • GICs with terms of up to 5 years
  • Money orders
  • And more: see full list here

Insured Categories Include:

  • Deposits held in your name
  • Deposits held jointly
  • Deposits inside an RRSP/RSP
  • Deposits inside a TFSA
  • Deposits inside a RRIF/RIF
  • And more: see full list here

For example, if you had $100,000 in a savings account and $100,000 in RSP GICs, all $200,000 of these deposits would be covered because they're in different categories.

What's Not Covered?

CDIC insurance covers eligible deposits. It doesn't cover investments like mutual funds, stocks or bonds. So in the above example, if the $100,000 in RSP GICs were held in mutual funds instead, the coverage wouldn't apply.

Here are a few more examples of how CDIC insurance would apply if you have multiple types of accounts.

Although Canadian financial institutions have had very few failures compared to our neighbours in the south, it's nice to know that we have a mechanism in place for member firms to further protect our eligible deposits.

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