About Canada deposit insurance corporation
Canada Deposit Insurance Corporation: Protecting Your Deposits Since 1967
The Canada Deposit Insurance Corporation (CDIC) is a federal Crown corporation that was established in 1967 to protect the deposits of Canadians. CDIC is an independent organization that operates at arm's length from the government and is funded by premiums paid by its member institutions.
CDIC's mandate is to provide deposit insurance to Canadians in case one of its member institutions fails. This means that if your bank, trust company, or credit union goes bankrupt, CDIC will reimburse you for your insured deposits up to a maximum of $100,000 per account category.
CDIC covers a wide range of deposit accounts including savings accounts, chequing accounts, term deposits such as GICs and RRSPs, and even foreign currency accounts. It also covers deposits held in registered plans such as RRSPs and TFSAs.
One important thing to note is that not all financial institutions are members of CDIC. To be eligible for coverage under CDIC, your financial institution must be a member. You can check if your bank or credit union is a member on the CDIC website.
In addition to providing deposit insurance, CDIC also plays an important role in maintaining stability in Canada's financial system. It does this by monitoring the health of its member institutions and taking action when necessary to prevent failures from occurring.
CDIC has been successful in fulfilling its mandate since it was established over 50 years ago. There have been only 43 failures among its members during this time period and all eligible depositors were reimbursed for their insured deposits.
One reason for this success is due to the strict regulations that govern Canadian banks and other financial institutions. These regulations ensure that these organizations are well-capitalized and operate with sound business practices which reduces the risk of failure.
Another reason for CDIC's success is due to its strong relationships with other regulators both in Canada and internationally. CDIC works closely with other federal and provincial regulators to ensure that the financial system remains stable and resilient.
CDIC is also a member of the International Association of Deposit Insurers (IADI) which allows it to share best practices with other deposit insurers around the world. This helps CDIC stay up-to-date on emerging risks and trends in the financial industry.
In conclusion, CDIC plays an important role in protecting Canadians' deposits and maintaining stability in Canada's financial system. Its success over the past 50 years is a testament to its strong governance, strict regulations, and close relationships with other regulators both domestically and internationally. If you are looking for a safe place to keep your money, make sure your financial institution is a member of CDIC so that your deposits are insured up to $100,000 per account category.