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March 07, 2022

Canadian still unclear about limits to CDIC insurance coverage: report

The credit crunch, a change to ownership rules, and the retirement of the baby boom generation have resulted in an interesting phenomenon, the Financial Post reports: Canada has a lot more banks than people realize.

Scan a list of Canada’s Schedule I banks and you’ll see the names of these recent arrivals, such as Bridgewater Bank, HomEquity Bank and MonCana Bank of Canada.

What do they all have in common? The comforts of CDIC coverage, a grain of comfort in an era of Euro-centred turmoil. But do you really know the rules when it comes to protecting that hard earned cash?

The Canada Deposit Insurance Corporation (CDIC) is a federal Crown corporation that insures Canadians’ savings in case their bank or other CDIC member institution fails or goes bankrupt.

CDIC, however, isn’t itself a bank nor is it a private insurance company. Premiums from member firms finance the fund, backed up by available monies from the federal government.

Right now, the maximum CDIC protection for eligible deposits in Canada is $100,000 per person (just seven years ago it was only $60,000 however).

Click here for a detailed look at what is or isn't covered.

For instance, savings must be held in Canadian dollars. Accounts or products in U.S. or any other foreign currency are not insured. Nor are mutual funds, US funds and stocks covered.

Does CDIC coverage even enter into your investment decisions?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...