CDIC

CDIC stands for the Canadian Deposit Insurance Corporation, a Canadian federal Crown corporation established to protect depositors. Its primary purpose is to provide deposit insurance for eligible Canadian-dollar deposits held at member financial institutions, helping maintain public confidence in the financial system during failures of insured banks or credit unions.

CDIC coverage is up to 100,000 per insured category per member institution. Insured categories include deposits held by individuals, deposits in joint accounts, deposits held in certain trusts, and deposits held in registered plans such as RRSPs, RRIFs, and TFSAs. Eligible deposits generally include chequing and savings accounts and certain term deposits, including GICs, issued by CDIC-member institutions.

Deposits that fall outside CDIC coverage include foreign currency deposits, mutual funds, stocks, bonds, and other investment products, as well as deposits held at non-member institutions or accounts that exceed the insured limits. CDIC protection applies to Canadian-dollar deposits at member institutions, not to non-deposit investments.

In the event of a member institution’s failure, CDIC pays insured deposits up to the applicable limit automatically, and depositors typically do not need to file a claim. CDIC operates independently of individual banks, with funding derived from premiums paid by member institutions rather than from tax dollars.

CDIC’s governance and operations are defined by the CDIC Act. It promotes financial stability by providing a predictable framework for recovering insured deposits and by communicating coverage rules and recovery processes to the public.