Get a free, no obligation personal loan quote with rates as low as 6.99%
Get Started You can apply with no effect to your credit score

Most people obtain insurance for something in the course of their lifetimes. Whether it’s car insurance, home insurance, or life insurance, people want to feel protected. It’s important to have a back-up plan in case things go south, and insurance offers you that. 

Have you ever thought about whether or not your money in the bank is protected? What happens if your bank loses your money, or if they go bankrupt? Let’s take a look at the insurance corporation that covers money in the bank. 

Who is the Canada Deposit Insurance Corporation?

The Canada Deposit Insurance Corporation, more commonly known as the CDIC, is a corporation that insures, or protects, the money you have in the bank. They insure over 80 financial institutions and will reimburse bank customers like yourself if the institution goes bankrupt or insolvent.  

History of Canada Deposit Insurance Corporation (CDIC)

In 1967, the CDIC was established as an independent Crown corporation. The previous year, 1968, was one of financial distress for many banks, which resulted in many consumers losing confidence in the Canadian financial system. When first established, the CDIC insured $17 billion (with a coverage limit of $20,000) in deposits in every federal bank, trust and loan company, as well as in provincial trust and loan companies.

A coverage limit of $20,000 might seem small; however, the CDIC has since evolved to keep up with the financial system. Now, the CDIC insures over $800 billion in deposits, with a coverage limit of $100,000 for each deposit category, per CDIC member. The CDIC has been protecting Canadians’ money for the last 53 years and continues to adapt to meet changing needs and circumstances. 

What Is and Is Not Insured By The CDIC?

To be clear, the CDIC does not insure all financial products that you may have at your financial institution. Please see the chart below to see what’s covered and what isn’t covered. 

InsuredNot Insured
Chequing, Savings and Tax-Free Savings Accounts Mutual Funds, Stocks, Bonds
Guaranteed Investment Certificates (GICs) and other term depositsExchange-Traded Funds (ETFs)
Foreign Currency (ie, $U.S.)Cryptocurrencies
Registered Retirement Savings Plans
Registered Retirement Income Funds (RRIF)
Trust Funds (ie. Registered Education Savings Plans)

How Does It Work?

The CDIC insures a maximum of $100,000 per insurance category, per institution. Does this mean that you are only eligible to be covered for $100,000 in your personal account? No. 

Let’s say you have a personal account with $100,000, a joint account with your partner worth $100,000, as well as a Tax-Free Savings Account (TFSA) with $100,000 in it. The CDIC will cover all of these funds (up to $100,000 each) because they are part of different insurance categories. To maximize your coverage, most experts recommend against keeping all of your funds in one account. It’s best to spread them out across different insurance categories, as shown in the chart below:

Type of Account/FundCoverage by CDIC
Personal Chequing Account$100,000
Joint Account with Another$100,000
Savings in Trust$100,000
Tax-free Savings$100,000
Retirement Savings (RRSP)$100,000
Retirement Income (RRIF)$100,000
Property Taxes$100,000

If you’re still wondering how much the CDIC could cover from your accounts, take a look at the CDIC’s online calculator

What Happens If a Bank Insured By The CDIC Becomes Insolvent? 

Although a financial crisis might seem distant to us, there have been instances in history that warranted the CDIC’s help. Specifically, between 1967 and 1996, there were 43 cases of bank insolvency. Some institutions that faced insolvency between those years include the Commonwealth Trust Company, Saskatchewan Trust Company, and Seaway Trust Company. Thankfully, there have been no insolvencies among CDIC members since 1996. 

So, what happens to your money if your bank fails or becomes insolvent? The good news is that the banks or their customers do not need to file any claims. The CDIC will contact you and reimburse your money within days. 

The CDIC will automatically reimburse insured deposits up to $100,000 (which includes both principal and interest) per insurance category, via cheque. For anything that isn’t covered by the CDIC (stocks, mutual funds, etc.), depositors would be eligible to file a claim with the liquidation firm. 

However, it is important to note that if your financial institution closes, you will no longer have access to any loans or lines of credit, and you would need to seek these services from another financial institution

Are All Banks CDIC Members? 

Many banks and financial institutions are CDIC members – the CDIC covers over 80 institutions. However, not all banks are members. For a complete list of all the members who are covered by the CDIC visit their official website.

The CDIC Act is a piece of legislation that outlines how different deposits receive insurance under the deposit insurance framework. CDIC members, usually banks, must meet regulatory requirements to ensure that their funds are protected by the CDIC. Legislation, by-laws, guidance, and forms on the CDIC website has helpful information to help banks comply with these requirements.  

Final Thoughts

We trust banks with a massive responsibility in managing our money and our savings. While banks are usually competent enough to manage your funds, the CDIC protects you in the event that banks cannot take care of your money anymore. 

Chrissy Kapralos avatar on Loans Canada
Chrissy Kapralos

Chrissy is a Toronto-based communications advisor. With an English degree from the University of Toronto and editing courses under her belt from Ryerson University, she has continued her lifelong passion for writing and editing. In addition to working for Loans Canada on a variety of financial topics, Chrissy has a few years of resume writing and editing under her belt, and takes great pleasure in helping people find work that fits with their experience and passions. When she isn't working, you can find her practicing yoga, hanging out with her dog, reading up on financial and real estate news, or planning her next trip abroad.

More From This Author

Special Offers

More From Our Experts

https://loanscanada.ca/wp-content/uploads/2023/09/GlobeMailTopCompanies2023-1.png
Loans Canada places No. 228 on The Globe and Mail’s fifth-annual ranking of Canada’s Top Growing Companies.

By Caitlin Wood, BA
Published on September 29, 2023

Loans Canada is excited to announce it has made it onto the Globe and Mail’s Top Growing Companies list for the second year in a row.

https://loanscanada.ca/wp-content/uploads/2023/09/Finder-Awards.png
Finder Awards Finalists: Personal Loans Customer Satisfaction Awards 2023

By Priyanka Correia, BComm

Loans Canada is happy to announce it received the finalist award in the Best Personal Loan Search Platform category.

https://loanscanada.ca/wp-content/uploads/2016/12/caution-1.jpg
Beware of Fraudulent Lenders Impersonating Loans Canada

By Caitlin Wood, BA

A note to our clients about fraudulent lending practices and illegal upfront fees.

https://loanscanada.ca/wp-content/uploads/2021/06/best-online-savings-account.png
Best Online Savings Account In Canada 2024

By Trevor O'Hagan

Discover the best online savings account in Canada for 2024. Compare top rates, fees, and features to maximize your savings and reach your financial g...

https://loanscanada.ca/wp-content/uploads/2021/09/Best-TFSA-Accounts-In-Canada-2024-.png
Best TFSA Accounts In Canada 2024

By Lucas Elliott

Explore top TFSA accounts in Canada for 2024. Compare high-interest savings, GICs & investment options for tax-free savings.

https://loanscanada.ca/wp-content/uploads/2020/06/Mortgage-Payment-Deferrals-.png
Can You Defer Your Mortgage Payment?

By Bryan Daly

A mortgage deferral is a great short-term solution to financial hiccups. Find out everything you need to get a mortgage deferral.

https://loanscanada.ca/wp-content/uploads/2021/01/Foreign-Mortgage.png
Applying For a Mortgage Outside of Your Home Country

By Lisa Rennie

Purchasing property in a foreigh country is a great way to diversify your assets and allow you to earn rental income.

https://loanscanada.ca/wp-content/uploads/2016/08/Affordable-Housing-Crisis.png
Affordable Housing Crisis In Canada

By Lisa Rennie

Check out what's affecting the housing market in Canada and learn about the affordable housing crisis in Canada.

Recognized As One Of Canada's Top Growing Companies

Loans Canada, the country's original loan comparison platform, is proud to be recognized as one of Canada's fastest growing companies by The Globe and Mail!

Read More

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Free
Service
Expert Tips
And Advice
Exclusive
Offers

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card