The Canada Deposit Insurance Corporation (CDIC) plays an integral role in protecting your savings and investments. Educating yourself about what sort of investment is safeguarded is a great way of ensuring that your money remains untouched should your financial institution encounter difficulties.

Bank failures are extremely rare in Canada, but they can happen. “In fact, since 1967, there have been 43 bank failures,” explained Michèle Bourque, the President and Chief Executive Officer of CDIC. “The good news is that not one of the two million Canadians affected lost a single dollar of their insured savings.”

"Since 1967, there have been 43 bank failures.  The good news is that not one of the two million Canadians affected lost a single dollar of their insured savings.”

What’s covered?

The majority of Canadian chartered banks are CDIC members, so are loan and trust companies and associations governed by the Cooperative Credit Associations Act. But what types of savings and investments are protected?

“Take any CDIC eligible deposits — chequing and savings accounts, term deposits, such as GICs, of five years or less and money orders — and put them in any of the separately insured categories: deposits in one name, joint deposits, trust deposits, RRSPs, RRIFs and TFSAs,” explained financial writer and television personality, Gail Vaz-Oxlade.

“Each of these categories is insured separately to a maximum of $100,000.”

Not all investments and savings are protected though. Mutual funds, stocks and bonds are out of the scope of CDIC, as are term deposits, such as GICs, with original terms to maturity greater than five years. Also not covered are foreign currency deposits: “This is particularly important for you snowbirds to know!” said Vaz-Oxlade.

“Knowing deposits are protected against a bank failure helps Canadians feel confident about their financial decisions, and about keeping those funds in CDIC member institutions."

Is your institution a member?

Be sure to confirm that your bank or trust company is one of the 80 CDIC member institutions before depositing your savings. “All CDIC members must display our sticker on the doors of all their places of business and on their websites,” said Bourque. “Also, a full list of our membership is available on our website: CDIC.ca."

The CDIC is funded by its member institutions, which pay premiums on their insured deposits. These premiums make up the pot of money that the CDIC can call upon in the event that a member institution fails and customers are left out of pocket.

"Don’t waste time when it comes to protecting your hard earned cash. Be proactive and seek professional advice if necessary."

Much needed security

Vaz-Oxlade believes that the CDIC plays a key role in adding strength and security to Canada’s financial sector. “Knowing deposits are protected against a bank failure helps Canadians feel confident about their financial decisions, and about keeping those funds in CDIC member institutions,” she said. “This helps to maintain the strength of Canada’s financial system, which benefits us all.”

Don’t waste time when it comes to protecting your hard earned cash. Be proactive and seek professional advice if necessary. “Get informed!” said Vaz-Oxlade.  “Talk to your financial advisor, financial institution or visit cdic.ca.  Take responsibility for your money.  Keep it safe.