Deposits held in a Tax-Free Savings Account (TFSA) are protected separately from the depositors’ eligible deposits held in other insured categories, such as those held in their individual names.
Here’s an example of a portfolio within a TFSA 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 TFSA, 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 TFSA 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.
Have more questions about how CDIC deposit protection works? Check out our FAQs and info videos.