CDIC Goes further than you think - Small businessess from 1 to 80 employees outsource your payroll management to us and let us worry about your payroll processing.
RSS Follow Become a Fan

Delivered by FeedBurner

Recent Posts

Tax changes to expect when you’re expecting
2016 Tax Tips for 2015 Filing Year
From Proprietorship to Corporation - When is the Best Time to Incorporate?
Tax Specialists Brief your Clients About CRA Fraud And E-Mail Scams
Bank of Canada cuts rates again

Most Popular Posts

Help your teenager build credit responsibly
Being an Executor of an Estate
Student Line of Credit
Principal Residence Exemption


aliko nutrition store- isotonix
aliko payroll services
canada revenue news and videos
canadian news
Cross border Tax
Disability awareness and Benefits for disabled
estate planning
Home Car Insurance
Income Splitting Strategies in Retirement
kids and money -set your children up for financial success
life insurance
on line safety tips
online safety tips
Real Estate - Investments / Retirement
Retirement planning
Save your money
small business planning
Tax Information for Students
tax news
tax planning
Tech news


January 2016
July 2015
May 2015
April 2015
February 2015
December 2014
November 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013

powered by


CDIC Goes further than you think

CDIC Goes further than you think
CDIC Goes further than you think
Written by Jim Yih
Back in 2005, conservative investors who appreciated the good old GIC had lots to celebrate because after 22 years, Canada Deposit Insurance Corporation (CDIC) raised the insured limit from $60,000 to $100,000.
CDIC insures most, but not all savings. CDIC covers:
·         savings accounts and chequing accounts
·         GICs or other term deposits with an original term to maturity of 5 years or less
·         money orders, certified cheques, travellers’ cheques and bank drafts issued by CDIC members
·         accounts that hold realty taxes on mortgaged properties
CDIC does not cover:
·         mutual funds and stocks
·         GICs and other term deposits with a date to maturity of more than 5 years
·         bonds
·         Treasury bills
·         Money market funds
·         US dollar or other foreign currency accounts
In order for the funds to be covered by CDIC, the financial institution must be a member of CDIC. To see if the institution you are dealing with is a CDIC member, visit the CDIC website.
So what does the $100,000 cover?
One of my readers, Bill and Andrea, posed a scenario where they received and inheritance of $750,000. They wanted to keep this money safe and secure and out of the markets. If they wanted to ensure that 100% of the money would be guaranteed by CDIC, did they have to spread the money out among 7 or 8 different financial institutions?
The thing to keep in mind is CDIC coverage is not only on a per institution basis but also on a per insurable category basis. You see, the problem with spreading the money out among a number of institutions is there can be more tracking, more paperwork and less bargaining power for rates.
One of the options they have is to open up a number of different eligible accounts even within the same institution. Here’s an example:
Invest $100,000 into a savings account in Bills name
Invest $100,000 into a savings account in Andrea’s name
Invest $100,000 into a savings account in a joint name account
Invest $100,000 into GICs in Bill’s name
Invest $100,000 into GICs in Andrea’s name
Invest $100,000 into GICs in joint name
Invest $10,000 into a TFSA in Bill’s name
Invest $10,000 into a TFSA in Andrea’s name
In this case, Bill and Andrea would effectively be covered for $320,000 invested because the Savings and GICs are considered the same insurable category as defined by CDIC.
Other eligible accounts include RRSPs, RRIFs, and trust accounts.
Theoretically, you could have over up to $500,000 dollars covered under one single institution.
Multiple entities
Some institutions also have multiple entities which also creates greater coverage. For example, Royal Bank (RBC) also has Royal Royal Bank Mortgage Corporation, Royal Trust Company and Royal Trust Corporation of Canada
Theoretically, with four institutions you could invest $1.3 million in each entity under 13 different accounts and be covered under CDIC up to $5.2 million dollars.
By utilizing different accounts and different related entities, you can really increase the CDIC coverage within the same institution. If you have a significant amount of money, be sure to shop around your options. There may be benefits keeping it all within one financial institution but there may also be advantages spreading the money around to different institutions.

0 Comments to CDIC Goes further than you think :

Comments RSS

Add a Comment

Your Name:
Email Address: (Required)
Make your text bigger, bold, italic and more with HTML tags. We'll show you how.
Post Comment