Deposit insurance in Canada is not one system, it is two. Banks are covered federally by CDIC to $100,000 per category. Credit unions are covered by their province, and in several provinces the coverage has no dollar limit at all.
Of the 245 accounts we track, 102 record CDIC coverage and 75 record a provincial guarantee scheme. Sixty eight record nothing, which is a gap in what the institution publishes rather than a statement that the money is uninsured.
CDIC Covers Categories, Not Accounts
The single most misunderstood thing about CDIC is the word “per”. The limit is $100,000 per depositor, per insured category, per member institution. It is not $100,000 in total, and it is not $100,000 per account. Somebody with three chequing accounts at the same bank has one $100,000 limit across all three. Somebody with a chequing account, a TFSA and an RRSP at the same bank has three separate limits.
There are nine categories:
- Deposits in one name
- Joint deposits, held in more than one name
- Registered Retirement Savings Plans (RRSP)
- Registered Retirement Income Funds (RRIF)
- Tax-Free Savings Accounts (TFSA)
- Registered Disability Savings Plans (RDSP)
- Registered Education Savings Plans (RESP)
- First Home Savings Accounts (FHSA)
- Deposits held in trust
The coverage is free and automatic. Nobody applies for it and nobody can opt out of it. It includes the interest as well as the principal, so a balance sitting at exactly $100,000 will be over the limit by the end of the year.
What CDIC Does Not Cover
The list of exclusions is short and it is the part worth knowing, because the products on it are often sold in the same branch, by the same person, on the same afternoon:
- Mutual funds
- Stocks and bonds
- Exchange traded funds
- Cryptocurrency
A TFSA is not automatically insured either. A TFSA holding a savings deposit is covered under the TFSA category. A TFSA holding an index fund is not covered at all, because deposit insurance insures deposits and that is not one. The wrapper does not decide it, the contents do.
One more distinction that catches people: CDIC insures against the member institution failing. It does not insure against the value of an investment falling, and it does not cover money lost to fraud or to a payment sent to the wrong person.
Credit Unions Are a Different System, and Sometimes a Better One
Credit unions are provincially regulated and are not CDIC members. Each province runs its own guarantee scheme, and they do not all work the same way. Across the accounts we track:
| Where the account is held | Accounts we track | How the guarantee is described |
|---|---|---|
| CDIC member institutions | 102 | $100,000 per category, per institution |
| Ontario, FSRA | 26 | Insured to the maximum FSRA covers |
| Alberta, Credit Union Deposit Guarantee Corporation | 19 | All deposits guaranteed, no dollar limit stated |
| Manitoba, Deposit Guarantee Corporation | 17 | Deposits guaranteed in full |
| Quebec, AMF | 5 | Provincial scheme |
| British Columbia, BCFSA | 5 | Provincial scheme |
| Saskatchewan, CUDGC | 3 | Provincial scheme |
| Not published | 68 | The institution does not state it on the account page |
That is the finding worth carrying away. Fifty three of the accounts we track sit with institutions whose provincial scheme describes the guarantee as unlimited, mostly in Alberta, Manitoba and Saskatchewan. Somebody in Manitoba holding $400,000 at a credit union may be more completely covered than somebody holding the same amount at a large bank, which is the opposite of what most people assume.
Two cautions on that. A provincial guarantee is backed by a provincial scheme rather than by the federal government, and the schemes differ in how they are funded. And these are descriptions institutions publish about themselves, which is what we record. Anyone relying on unlimited coverage for a large balance should read the guarantee corporation’s own terms rather than an account page, including ours.
When the Limit Actually Binds
For most people it never does, and worrying about it is misplaced effort. It starts to matter in four situations, all of them temporary and all of them involving more money than usual sitting in one place:
- Between selling and buying a home. The proceeds land in one account and sit there for weeks.
- After an inheritance or a settlement, before it is invested.
- A business account holding payroll or tax that has been collected and not yet remitted. Business deposits are covered on the same terms, and a business balance is often much larger than a personal one.
- Somebody who has deliberately moved everything to cash and left it with one institution.
The fix in each case is the same and it is not complicated: split the money across more than one member institution, or use more than one category, or both. Two banks means two sets of limits. A joint account with a spouse is a separate category from either person’s own deposits.
A detail worth knowing before splitting: several brands belong to the same CDIC member. Two accounts at what look like two institutions can share one $100,000 limit if the parent is the member. CDIC publishes the list of members and which brands sit under each, and it is the only reliable way to check.
What to Take From This
Coverage is automatic, free, and larger than most people think once the categories are counted. It covers deposits and not investments, whatever wrapper the investment is in. And outside CDIC there is a second system that is genuinely different, which is worth knowing about before deciding a credit union is the riskier place to keep money.
Every account in our directory records the insurance the institution publishes, and where the institution publishes nothing the field is left blank rather than assumed. The savings account page is where the balances large enough for this to matter usually sit.
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