What happens to my insured deposits?
Deposits held in one name and Deposits held in more than one name (i.e. joint deposits)
Through CDIC’s reimbursement process, we calculate your total insurance amount. This means we review all eligible deposits across the same categories and combine them where applicable to determine the amount to which you are entitled.
To calculate deposit insurance, we look at the books and records of the failed member and add together deposits that are:
- ✓ Owned by the same depositor
- ✓ In the same insurance category
Example:
Jane has two chequing accounts containing $10,000 and $15,000 respectively, and one savings account with $50,000. Jane will receive one cheque for $75,000 because all three of these accounts fall under the Deposits held in one name insurance category.
Jane also has a joint account with her husband, John, with $35,000 in it. This account will not be combined with her other accounts because it is in the Deposits held in more than one name (i.e. joint deposit) category. Rather, she will receive a separate cheque in both her and John’s name for $35,000.
In total, Jane is insured for $110,000.
- $75,000 in Deposits held in one name and
- $35,000 in Deposits held in more than one name.
What you can expect from CDIC
For Deposits held in one name and Deposits held in more than one name (i.e. joint deposit) – these will be paid by cheque. You will be receiving a separate letter, statement and cheque for these two categories.
Cheques will start to be mailed out through Canada Post in the days following the closure of the failed member. Before contacting CDIC regarding your cheque, please allow a few days for the package to reach you. As the cheques will be sent via regular mail, we cannot provide you with a tracking number for your payment.
Registered deposits
Registered deposits such as RRSPs, RRIFs, RESPs, RDSPs, FHSAs and TFSAs must be treated differently than other deposits to ensure the products and their related plans remain tax-sheltered.
For this reason, CDIC is unable to reimburse depositors directly. To preserve their registered status, these deposits must be transferred to another financial institution that offers identical products with the same registered status. This means, for example, an insured deposit held in an RRSP must be transferred into another RRSP and cannot be transferred to a different registered category such as a TFSA.
Please note: if you hold mutual funds, stocks, bonds, or ETFs in your registered accounts, they are not protected by CDIC. These financial products may be protected under different regimes.
What to expect
Reimbursement of insured registered deposits will take longer than non-registered deposits like those in a savings or chequing account to avoid tax implications.
Once the insurance determination calculation has been completed, CDIC will mail a separate letter and statement for each deposit insurance category holding registered deposits.
The letters and statements will contain important information, so please keep these documents for your reference.
Next Steps
- You must choose a new financial institution to receive the reimbursement of registered insured deposits.
You are free to choose any financial institution, however, the new financial institution must offer the same type of registered deposit as the closed institution (the terms of the deposit may vary but will not prevent the transfer of your funds). - You will need to open a new account and may need to provide information found on the statement, received from CDIC, to the new financial institution.
The new financial institution will complete the appropriate paperwork to initiate the transfer with the court-appointed liquidator who is acting as an agent of CDIC and the failed member in order to conduct the transfer. - Once the liquidator is appointed and receives and verifies the appropriate paperwork, insured deposits will be transferred to the new financial institution.
FAQs for Depositors
Deposits held in one name
How long will it take CDIC to make a payment on my insured deposits?
CDIC’s goal is to ensure depositors receive their money as quickly as possible. This process is automatic, and depositors do not have to file a claim. Cheques will start to be mailed out in the days following the failed member’s closure. Delivery times may vary.
Are High Interest Savings Accounts (HISA) insured?
CDIC determines the eligibility of High Interest Savings Accounts on a case-by-case basis.
How is my business account(s) covered?
For the purposes of deposit insurance, a depositor may be an individual, an association of persons, a partnership, a corporation or a government entity. Eligible deposits in business accounts may be insurable separately from eligible deposits in individual accounts. “Sole proprietorships” do not benefit from separate deposit protection, as they are not separate legal entities. As a result, deposits in the individual’s name will be combined with the “sole proprietor’s” personal deposits. This video provides useful information about deposit insurance coverage for businesses.
Deposits held in more than one name (i.e. joint deposits)
How does CDIC insurance apply to joint deposits?
Joint deposits (in the names of two or more people) are insured separately from the owners’ eligible deposits held in other insured categories, such as those held in their individual names. Each eligible joint deposit is protected for up to $100,000 per set of joint owners, regardless of the number of people who own the deposit.
What is the payment procedure for joint deposits?
Payment of joint deposits will be made according to the registration of the account. Deposit insurance is payable per set of joint owners; that is, the joint owners together receive a single payment of up to $100,000.
How does a deposit qualify as a joint deposit?
To be eligible for separate coverage as a joint deposit, the following information must appear on the records of the CDIC member institution holding the funds:
- A statement that the deposit is owned jointly;
- The name and address of each of the joint owners.
I have multiple joint accounts with different people (my spouse, children, grandchildren), are they each covered up to $100,000?
Yes, joint deposits (in the names of two or more people) are insured separately from the owners’ eligible deposits held in other insured categories, such as those held in their individual names. Each eligible joint deposit is protected for up to $100,000 per set of joint owners, regardless of the number of people who own the deposit.
I have a joint deposit with my spouse, and I also have a joint deposit which was made on my behalf in trust by my broker. Are they each covered up to $100,000?
Yes, deposits made in trust by your broker are in a separate deposit insurance category regardless of their joint nature. Your deposits would therefore be covered by two separate categories – one under the joint deposit insurance category and the other the trust category.
Mortgage/Bill payments
My mortgage is held at the failed member and payment is due at the end of the month. Do I still need to pay it?
Yes, the court-appointed liquidator will continue to process payments throughout the liquidation of the failed member. You must continue to make your payments at the same time as you have in the past. You will be kept fully informed of any changes by the court-appointed liquidator.
If I am unable to make any bill or mortgage payments because my bank account at the failed member no longer works. What do I do?
In order to process your future bill and mortgage payments CDIC recommends you do two things:
- Open a new bank account at a new institution and ensure your income is being paid there going forward; and
- Call your creditors and explain these unusual circumstances.
What will happen to all my automatic withdrawals / payment / bills / payroll / pension coming in and out of my account at the failed member?
As the failed member has closed, no transactions will be processed. You need to open an account at a new financial institution and make the necessary changes to redirect all these items to the new account.
What will happen to my loan/line of credit?
You will need to make credit arrangements with another financial institution. Regarding repayment of any debts owed to the failed member, you will need to make arrangements with the court-appointed liquidator.
Term Deposits
What happens to my GIC?
GICs are eligible for CDIC coverage. These will be cashed out immediately, regardless of the length of time left in the term, and paid out, including any interest owing, up to the CDIC maximum of $100,000. Early redemption fees will not be charged.
Interest on eligible deposits, accrued and payable up to the date of the bank’s closure, will be calculated according to the deposit contract with the closed institution. Interest will be combined with the principal in calculating insurance payouts, up to a maximum of $100,000 per depositor, per insured category.
Can I transfer my non-registered (savings, chequing, GICs) deposits directly to another bank instead of waiting for a cheque in the mail?
No. Payments are mailed to depositors automatically.
Since I do not have any specified interest on my index-linked GIC, how will you calculate my interest?
Interest will be calculated according to the deposit contract (interest rate) with the bank and accrued up to the date the bank closed.
Registered Deposits (RRSP, RRIF, RESP, RDSP, TFSA, FHSA)
Are all products in my RRSP / RRIF / RESP / RDSP / TFSA / FHSA covered by CDIC?
Eligible products include savings and chequing accounts, GICs or other term deposits, money orders, certified cheques, and bank drafts issued by CDIC members are protected by CDIC.
CDIC does not insure mutual funds, stocks, bonds, or ETFs. These financial products may be protected under different regimes.
What are my coverage limits for my RRSP / RRIF / RESP / RDSP / TFSA / FHSA?
CDIC insures eligible deposits up to a maximum of $100,000 (principal and interest combined) per depositor per insured category. RRSP, RRIF, RESP, RDSP, TFSA and FHSA are each considered separate insurance categories.
CDIC does not insure mutual funds, stocks, bonds, or ETFs. These financial products may be protected under different regimes.
Are there tax consequences to the reimbursement of insured deposits in my RRSP / RRIF / RESP / RDSP / TFSA / FHSA?
Insured deposits held in registered plans such as RRSP, RRIF, RESP, RDSP, TFSA and FHSA will be held temporarily while CDIC works with the Canada Revenue Agency to ensure they remain tax-sheltered. CDIC will communicate directly with these depositors to inform them of next steps.
How do you calculate insurance on a spousal RRSP?
Deposit insurance on spousal RRSP’s is calculated based on the named owner of the RRSP and not the individual who made the deposit and received the tax receipt (i.e. the contributor).
Will I continue to receive my monthly RRIF payments?
Questions with regard to monthly RRIF payments should be directed to the court appointed liquidator.