CDIC’s strengthened deposit insurance framework
Industry news and events
Changes to deposit insurance took effect on April 30th, adding foreign currency deposits and term deposits of greater than five years to CDIC’s coverage framework. “These changes demonstrate that CDIC is keeping pace with how Canadians bank and save, so they have even greater assurance that their hard-earned money is protected at any of our members,” said Peter Routledge, CDIC’s President and CEO.
Here’s an overview
Foreign currency deposits are protected up to a maximum of $100,000 (principal and interest combined) per depositor in each of the insured categories.
It’s important to note that foreign currency deposits do not receive separate coverage. In the event of failure, they would be combined with other deposits in the same deposit insurance category. To calculate coverage, they would be converted into, and be payable in, Canadian dollars, using the conversion rates published by the Bank of Canada on the date of failure.
And foreign currency deposits at foreign financial institutions are not covered by CDIC but may be covered by that country or region’s deposit insurer, so be sure to check with them.
Term deposits, including Guaranteed Investment Certificates (GICs) of more than five years are now eligible for CDIC protection up to a maximum of $100,000 (principal and interest combined) per depositor in each of the insured categories.
Similar to foreign currency deposits, keep in mind that, in the event of failure, term deposits of more than five years do not receive separate coverage but would be combined with other deposits within the same category.
Term deposits greater than five years and foreign currency held at a CDIC member institution will automatically be eligible for coverage, even if they were purchased before April 30, 2020. Coverage is free, automatic and fully backed by the Government of Canada.
These changes ensure that CDIC protects more of Canadians’ hard-earned savings.