To help educate you about CDIC, play the following quiz.
This is a sponsored post written by me on behalf of Canada Deposit Insurance Corp. The opinions and writing in this article are solely my own.
Question 1: What is the coverage limit per category at CDIC?
- A – $50,000
- B – $100,000
- C – $500,000
- D – $1,000,000
The answer is B, $100,000. CDIC protects up to $100,000 (including principal and interest) per deposit category. What that means is that you actually get additional coverage since there are seven categories including joint accounts with a spouse, joint accounts with a parent, tax-free savings accounts (TFSAs) and registered retirement saving plans (RRSPs). This is per member so if you were to spread out your accounts, you could easily get even more protection with CDIC.
Question 2: Are foreign currencies covered by CDIC?
- A – Yes
- B – No
The answer is B, No. Although foreign currencies are currently not covered by CDIC, that all changes come April 30th, 2020 when they will be protected. The same $100,000 limit per category still applies and your foreign currency must be deposited at a CDIC member. One thing to note, as of April 30th, 2020, travellers’ cheques will no longer be covered by CDIC, but who uses those anymore?
3. How many Canadian banks have failed since CDIC was introduced?
- A – 3
- B – 12
- C – 29
- D – 43
The answer is D, 43. This may be shocking to some people since CDIC currently has 86 members, but here’s the thing, not one dollar under CDIC protection was lost to these failures. In the event a bank fails, CDIC will step in right away and reimburse your money up to $100,000 per eligible category.
4. What are some types of accounts covered by CDIC?
- A – tax-free savings accounts (TFSAs) and registered retirement saving plans (RRSPs)
- B – Registered education savings plans (RESPs) and registered disability savings plans (RDSPs)
- C – All of the above
The answer is C, all of the above. Eligible deposits in tax-free savings accounts and registered retirement saving plans, as well as those in registered education savings plans and registered disability savings plans that are structured as a trust, are covered.
5. What type of investments are covered by CDIC?
- A – Stocks
- B – Bonds
- C – Mutual funds
- D – Guaranteed investment certificates (GICs)
- E – All of the above
The answer is D, guaranteed investment certificates. Investment products such as bonds, mutual funds, stocks and cryptocurrency are not covered by CDIC. Your GICs and other term deposits with original terms to maturity of five years or less are covered. As of April 30, 2020, there will be extended coverage of eligible deposits with terms greater than five years.
6. Is it easy to find out if your deposits are covered by CDIC?
- A – Yes
- B – No
The answer is A, Yes. When you walk into a physical branch that’s a CDIC member, they’ll have a big purple CDIC sticker displayed on their door. This purple logo is also displayed on member financial institution websites and in their banking apps. You can also check the CDIC website to see if your financial institution is a member. Note that sometimes they’re listed under their parent company. For example, Oaken Financial falls under Home Trust Company and Home Bank. CDIC also has an online estimator to help you calculate your coverage.
The original version of this post, CDIC Changes Coming, includes an opportunity to win a $500 Air Canada gift card.