Deposits held in a Registered Retirement Savings Plan (RRSP) are protected separately from the eligible deposits held in other insured categories, such as those held in individual names.
Here’s an example of a portfolio within a RRSP at one CDIC member institution – and what does (✓) and does not (✗) qualify for CDIC coverage:
- $ 20,000 in a GIC ✓
- $ 90,000 in a term deposit ✓
- $ 50,000 in stocks and bonds ✗
- $ 130,000 in mutual funds ✗
Total Portfolio = $290,000
Total Eligible Deposits = $110,000
Total Deposits Protected by CDIC = $100,000
What’s protected & why:
Within the insured category of RRSP, the above GIC and term deposit are eligible deposit products and are therefore combined for coverage of up to $100,000 of CDIC protection. So $100,000 of the eligible $110,000 within the RRSP category are protected. CDIC coverage does not apply to stocks, bonds or mutual funds, so those investments, which amount to $180,000 of the total $290,000 in the category, are not eligible to be insured by CDIC.
The following are special types of RRSPs and eligible deposits held in them are combined with eligible deposits in regular RRSPs owned by the same depositor at the same member institution.
- LIRA – Locked-in Retirement Account
- LRSP – Locked-in Retirement Savings Plan
- RLSP – Restricted Locked-In Savings Plan
Spousal registered retirement savings plans (RRSPs)
A spousal RRSP is created so that one spouse (usually the one with a higher income) can contribute to a RRSP in the name of the other spouse or common-law partner.
CDIC determines coverage on the basis of who owns the eligible deposits, not who contributes to them. As a result, eligible deposits held in spousal RRSPs will be paid out to the RRSP owners, rather than the contributor, in the event of a member failure.
Example:
This example illustrates how deposit insurance applies to eligible deposits where an individual has a (1) LIRA, a (2) spousal and (3) non-spousal RRSP account at the same member institution.
- $20,000 in a GIC
- contributed by your spouse
- held in your spousal RRSP (where you are the owner of the account)
- $70,000 in another GIC
- contributed by yourself
- held in your own (non-spousal) RRSP
- $50,000 in another GIC
- contributed by yourself
- held in your own LIRA
- = $140,000 of which $100,000 is protected by CDIC
What’s insured & why:
The GICs in the LIRA, spousal and non-spousal RRSPs in your name are covered within the RRSP insured category – so they are combined ($140,000) and protected up to a limit of $100,000.
Have more questions about how CDIC deposit protection works? Check out our FAQs and info videos.