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HomeFinanceSave MoneyAre You Jittery That Your Bank May be Cash-strapped?

Are You Jittery That Your Bank May be Cash-strapped?

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Are you aware that in the unlikely occurrence that a CDIC-insured bank fails here in Canada, a depositor needs to fear no loss?  CDIC is Your Ready Financial Firefighter, poised to tackle the problem quickly without you even feeling any of the heat.

How CDIC Protects Your Deposits

According to Peter Routledge, the former President and CEO of CDIC, if your bank runs aground CDIC will take one of these steps to ensure you do not lose your money:

  • Assist with the sale of a troubled bank
  • Take over the bank until a buyer can be found
  • If the institution is entirely unhealthy, it would be wound up and depositors would be reimbursed

In each of the 3 steps above, depositors are fully protected by CDIC.

See the video recording of the interview with Peter Routledge below:

This interview was recorded in June 2021 when Peter Routledge was still serving as President and CEO of CDIC. He is now the former President and CEO.

When Calgary-based Security Home Mortgage Corporation ran into troubled waters, some $42 million in deposits were involved. Depositors panicked. But the anxious moments were short lived. Fortunately, the bank was CDIC-insured. Customers’ eligible deposits were protected up to $60,000, per separate insured category. Coverage was free and automatic, with no one having to apply or file a claim for it. Automatic payment was made for all insured deposits within just 3 weeks. 

That was 25 years ago. Today, CDIC can now pay out depositors in just a few days – within 7 days average processing time. Deposits are also now insured up to $100,000 in each of the following categories:

  • Savings and chequing accounts in your name alone.
  • Savings and chequing accounts in your name and another’s.
  • Trust accounts (coverage is $100,000 per beneficiary in the same account).
  • Your tax-free savings accounts (TFSA)
  • Your Registered Retirement Savings Plan (RRSP).
  • Your Registered Retirement Income Fund (RRIF).
  • Your Mortgage Tax Account

In April 2022, more changes will be introduced to modernize and strengthen deposit protection including the addition of separate categories for Registered Education Savings Plans (RESPs) and Registered Disability Savings Plans (RDSPs).

The CDIC Trump Card

Canada has a really well respected financial/banking system and CDIC is central to it. It adds to the stability of Canada’s financial system. In the last five decades, CDIC has protected more than $26 billion in insured deposits across 43 failed institutions. That is the core of its existence and that will always be the case. CDIC offers peace of mind.

CDIC is a Crown Corporation created by Parliament in 1967. It has tools and powers to resolve all member banks, from the smallest to the biggest. The corporation is equipped with a modern set of flexible resolution tools to protect Canadians’ hard-earned money and thereby aid in the stability and growth of the country’s financial system.

A healthy financial system is simply this: the more deposits made, the more liquid the economy is. More funds will then be readily available to Canadians to finance loans and projects. CDIC wants you to know you are covered. Their purple sticker is their identity. It speaks of protection. It speaks of stability. It is an assurance that your deposits can be around for the long haul.

Withdrawal limits are a kind of protection for customers

Your Bank Is Not Cash-strapped

Several people have reported not being able to immediately access cash above $5,000. It’s been a major scare among immigrants, leading to the setting off of a certain unhealthy alarm. 

It is not anything to worry about. Listen to Mr. Peter Routledge as he explains that setting withdrawal limits like that is nothing unusual, because Canada is a cashless economy. In Canada, any withdrawal request that is $5,000 and above may require an advance notice to the bank. It does not mean there are issues with the bank. It really implies that the bank is being responsible. 

Withdrawal limits are a kind of protection for customers. So, relax! The safest place to keep your money is in a CDIC-insured bank. CDIC offers you peace of mind. They’ve got you covered.

As long as your bank is CDIC-insured, your money is safe. But it’s important to note that not all deposits are covered by CDIC. Stocks, bonds and mutual funds, for example, are not protected by CDIC. A good thing to do is learn about deposit protection and spread the good word. Should you need to make an inquiry or talk to someone about your fears, make use of CDIC’s contact avenues.

For General Enquiries: 1-800-461-2342 
TTY service: 1-613-943-6456 | Email: info@cdic.ca

For Media Enquiries: 1-613-943-4395
Email: media@cdic.ca

For CDIC Member Institutions: 
Email: members@cdic.ca

Take steps to ensure that your money is safe by becoming informed about CDIC’s member institutions, insured categories, and limits. Talk to your financial advisor or ask about CDIC where you bank or invest. 

The safest place to keep your money is in a CDIC-insured bank.

Listen to the audio recording of the interview with Peter Routledge here:

This interview was recorded in June 2021 when Peter Routledge was still serving as President and CEO of CDIC. He is now the former President and CEO.

There’s so much to discuss to ensure you succeed in Canada. Join us in the community as we discuss the safety of our money and other topics of interest. 


Written by Yinka Bakare.

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