A Primer on CDIC Insurance

Craig Sebastiano
by Craig Sebastiano May 2, 2017 / No Comments

When you deposit money in a savings account, chequing account, or GIC, your money is usually protected by the Canada Deposit Insurance Corporation (CDIC).

If you’re not sure what CDIC insurance is, here are some frequently asked questions and answers:

Q. What is the CDIC?

A. The CDIC is a Crown corporation created in 1967 by the federal government that provides deposit insurance against the loss of eligible deposits at member institutions in the event of a failure.

Q. What is CDIC insurance?

A. CDIC insurance protects eligible deposits at member financial institutions up to a maximum of $100,000 (including principal and interest). You receive coverage automatically and you don’t need to apply for it. If your financial institution fails, you’ll be paid automatically and you don’t need to file a claim.

Q. What’s an eligible deposit?

A. An eligible deposit includes:

  • Savings accounts
  • Chequing accounts
  • Term deposits (including GICs) with an original term of five years or less
  • Certified cheques issued by CDIC members
  • Money orders/bank drafts issued by CDIC members

Q. What’s not insured?

A. There are a number of uninsured financial products, including:

  • GICs or term deposits with an initial term of more than five years
  • Foreign currency deposits
  • Mutual funds
  • Stocks
  • Bonds
  • Treasury bills
  • Principal protected notes
  • Deposits held at financial institutions that aren’t CDIC members

Q. Who are members of the CDIC?

A. All of Canada’s Big Six banks are members of the CDIC as are a number of other financial institutions, such as Canadian Tire Bank, Citibank Canada, HSBC Bank Canada, Manulife Bank of Canada, and many others. Visit the CDIC’s website to find a list of member institutions.

Q. Who aren’t members of the CDIC?

A. Most credit unions and caisses populaires aren’t covered by the CDIC. Instead, deposits at those institutions are covered by provincial corporations or non-government insurers.

Q. Are all my deposits insured even if I have more than one type of account?

A. Eligible deposits are insured separately for different categories:

  • Deposits held in one name
  • Deposits held in more than one name
  • Deposits held in an RRSP
  • Deposits held in a TFSA
  • Deposits held in a registered retirement income fund (RRIF)
  • Deposits held in a trust
  • Deposits held for paying taxes on mortgage properties

For example, if you have $75,000 in a GIC in an RRSP, $75,000 in a GIC in a TFSA, $25,000 in a chequing account, and $75,000 in a joint savings account with your spouse, you’ll have $250,000 in CDIC coverage even if all of your money is with the same financial institution.

Q. Who pays for CDIC insurance?

A. CDIC members pay premiums to cover the cost of insuring deposits.

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