Here’s an example of a portfolio within a RRSP – and what does (✓) and does not (✗) qualify for CDIC coverage:
- $ 10,000 in a GIC ✓
- $ 50,000 in a term deposit ✓
- $ 50,000 in stocks and bonds ✗
- $ 130,000 in mutual funds ✗
- = $240,000 of which $60,000 is covered.
What’s protected & why:
The GIC and term deposit are eligible deposits within an insured category – a RRSP. Eligible deposits within one category are insured for up to $100,000. So $60,000 of the $240,000 in total deposits is covered.
What’s not insured:
CDIC does not insure stocks, bonds or mutual funds, so $180,000 in those investments is not covered.
A Locked-in Retirement Account (LIRA) is a type of RRSP. LIRAs are treated the same as RRSPs and other insured categories. However, if one person has both a LIRA and a RRSP, they would be combined for a total of $100,000 in the event of a failure.
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.
We calculate insurance on the basis of who owns eligible deposits, not who contributes to them.
RRSPs are one of CDIC’s insured categories. Eligible deposits held in spousal RRSPs at a failed CDIC member institution will be paid out to the RRSP owners. A person may own several RRSPs at the same member institution; for deposit insurance purposes, eligible deposits within them would be combined and insured for a total of up to $100,000.
Here’s an example of how deposit insurance applies to spousal RRSPs.
Example: spousal RRSP
This example illustrates how deposit insurance applies to eligible deposits in a spousal RRSP, involving Joe.
- $100,000 in a GIC
- contributed by Joe’s wife;
- held in Joe’s spousal RRSP.
- $90,000 in another GIC
- contributed by Joe himself;
- held in Joe’s own (non-spousal)
- = $190,000 of which $100,000 is covered
What’s insured & why:
The spousal and non-spousal RRSP have one owner – Joe – so they are combined ($190,000) and insured to a limit of $100,000.
What’s not insured & why not:
The excess $90,000 in Joe’s combined RRSP is above CDIC’s coverage limit of $100,000 per category and is not insured.