Principal Protected Notes (PPN)
Most PPNs are tradable debt securities issued by an agent with the repayment of the investment’s principal guaranteed by a financial institution. CDIC does not consider these to be deposits as defined under the CDIC Act and they are therefore not insured.
However, it is important to note that some index-linked products that are referred to as “PPNs” may indeed be eligible for deposit insurance. If you are not sure if your product is covered, check the PPN certificate carefully to determine whether or not CDIC deposit insurance applies.
Under the CDIC Deposit Insurance Information By-law, member institutions must provide notification to depositors when a deposit (or deposit-like) product is not eligible for insurance. Such notification must be in the form of a statement on the certificate or receipt that it is not CDIC insured.