How Your Assets Are Protected: A Look at CDIC & CIPF

This week we wanted to discuss 2 organizations that you may not have heard of, but play very important roles in protecting Canadian investors. National Bank Financial is a member of both of these institutions. 

The Canadian Deposit Insurance Corporation (CDIC) is a Crown Corporation established in 1967 that provides insurance against eligible deposits up to $100,000. Eligible deposits include savings and chequing accounts, GICs, and money market funds among other instruments. They have an excellent website full of useful and approachable information. The video at the link provides an excellent overview and some great insights, such as how despite 40 member institutions failing since the inception of CDIC, no deposits under the insurable limits have ever been lost.

What's Covered by CDIC? The below is taken from their website. Note that the $100,000 is PER CDIC member in each account. 

For instance, if you held $100,000 in NBC and $100,000 in BMO GICs in an RSP and $100,000 in NBC and $100,000 in Scotia GICs in a TFSA, 100% of your deposits are insured (assuming you don't hold these issuers in an RSP/TFSA elsewhere). Something else to keep in mind is many large banks have multiple issuers, each with their own CDIC coverage (Ex. National Bank and National Trust are 2 separate CDIC members).

Very few of our clients hold just cash/GICs though. For those holding securities (such as stocks, bonds, mutual funds and ETFs), the Canadian Investor Protection Fund (CIPF), is the second institution worth knowing about. You can read about their coverage here discussion the types of assets they cover and what their coverage limits are.

There is an excellent FAQ section on the CIPF website that if you have concerns is worth checking out.

As always, if you have any concerns please don’t hesitate to get in touch with our team.