What is CDIC insurance, how does it work, and what is covered?

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How to maximize CDIC insurance

If you have $ 100,000 or less in deposits with a financial provider, you don’t have to worry about maximizing your CDIC insurance because, at a minimum, you will receive $ 100,000 in coverage per bank on all of your deposit accounts.

Once you have more money to put away, consider spreading it out so that you can keep all of your cash protected. With 86 CDIC member institutions, you have plenty of room to secure your savings by opening multiple accounts, each worth $ 100,000, at different banks.

For example, when you have $ 700,000 to save, you might consider opening seven accounts worth $ 100,000 each at seven different banks.

If you prefer to stick with a tried and true bank, you can open a $ 100,000 account in each of the seven categories to protect up to $ 700,000. For example, $ 100,000 in an unregistered savings account and $ 100,000 in a registered RRSP savings account.


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What does CDIC not cover?

It turns out that not all investments are covered. When you invest in stocks, bonds, ETF, mutual funds and cryptocurrencies, you assume all risk. However, the Canadian Investor Protection Fund (CIPF) can cover the cash balances that you have, for example, in your brokerage account, if it is a CIPF member institution. Like the CDIC, the CIPF is a nonprofit crown organization whose members pay premiums, so you are provided with some coverage in the event that the company you are investing through goes bankrupt. However, if your investment, like a stock, bottoms out, no one is hedging it for that.

What if my bank is not a member of the CDIC?

You may still be offered deposit protection at the provincial level. The Deposit Insurance Corporation of Ontario (DICO) is a public agency governed by the province, while all the remaining provinces rely on private corporations to insure their savings. For complete details on how to protect your assets, ask your financial advisor to clarify who is insuring your bottom line and how much will be covered.

Are credit unions covered by CDIC?

That depends on how your credit union is regulated. Your savings and deposits through provincially regulated credit unions are covered by the crown regulatory agency administered by the corresponding provinces. Federally regulated credit unions are covered by CDIC, if they are registered members. Consult the CDIC site members section to see if it’s covered. If not, click below by province.

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