If your financial institution fails and you have deposited money in a bank, trust or loan company that is a member of the Canada Deposit Insurance Corporation (CDIC), then you may be eligible for some compensation. Your eligibility will depend on the type of deposit that you made.
How to determine whether your financial institution is a member of CDIC
Most CDIC member banks, trust, and loan companies will display a sign in the branch or office that identifies them as a member institution. Almost all of the major banks and trust companies are insured by CDIC. You can obtain and review a full list of CDIC member institutions by contacting the CDIC directly.
What types of deposits are eligible for coverage?
CDIC insures various types of deposits including savings, chequing, term deposits, GICs, money orders, money drafts, certified drafts, certified cheques, and traveller's cheques that are issued by institution members. All eligible deposits need to be in Canadian currency. In order for term deposits to be eligible for coverage, they will have to be payable before five years has expired from the date of the deposit.
CDIC will not insure any of the following:
- Foreign currency deposits;
- Term deposits with a maturity of more than five years from the date of deposit;
- Debentures issued by chartered banks;
- Bonds and debentures issued by governments and corporations;
- Treasury bills;
- Investments in mortgages, stocks and stock options, money market funds and mutual funds; and
- Notes or PPNs.
What type of coverage does CDIC provide?
CDIC provides a maximum coverage amount of $100,000 per depositor in each member institution. Additionally, CDIC provides separate protection for joint deposits, deposits held in trust, and deposits in RRSPs and RRIFs. Joint deposits are insured separately from the individual’s personal account to a maximum of $100,000. In addition, the financial institution’s records must clearly indicate that the account is owned jointly. Trust deposits are also insured separately from the individual’s personal accounts. The financial institution’s records must clearly identify the beneficiaries and it must also clearly indicate that the account is held in trust. Each beneficiary’s portion of the trust deposits are insured up to a maximum amount of $100,000.
What if member institutions merge?
If two member institutions merge and your total insurable deposits exceed $100,000, your insured deposits in your savings and chequing accounts from each institution will continue to be insured until they are withdrawn. Insured term deposits will remain insured until they mature. Nevertheless, if you make new term deposits at the new merged institution, your deposits will not be insured beyond the maximum amount of $100,000.
How to make a claim
You do not need to file a claim with CDIC if your financial institution fails. Instead, CDIC will contact you and provide you with information regarding how and when you will receive your payment. You will most likely receive your payment within two months.
Canada Deposit Insurance Corporation