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Canadian Banks: Is My Money Safe?

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Upon landing in Canada, every immigrant will need a new bank account to manage day-to-day expenses and save for the future. An immigrant’s story of sweat, grime, toil, hero’s tour, and win are oftentimes tied to what can be staved off and saved in the bank. That’s what makes it worth the while.

The latest information from Citizenship and Immigration Canada (CIC) has it that new immigrants are expected to come into Canada with a minimum of $24,553 for a family of four, with $3,560 for each additional family member. At 300,000 immigrants coming in each year, clearly, immigrants bring enormous wealth to Canada from all over the world! But not all the funds go towards getting settled. A large chunk of it (sometimes as much as $20,000) finds its way into banking institutions as savings for projects and sometimes unforeseeable ventures.

That’s a lot of inflow into Canada annually. You cannot bring in such an enormous amount and not be concerned about its safety.

Bank failure is a recurring financial issue all over the world. It is mind boggling to say the least. No one wants a compromised or emptied egg nest. No one wants to wake up to a cruel reality.

Now, there are several what-ifs.

What if you wake up in the morning to hear that a bank has gone under…your bank?

What if your life savings ended up in such a bank?

Canada is not immune to bank failures. In fact, Canada has a history of 43 bank failures affecting more than two million depositors, immigrants inclusive, since 1967 when the Canada Deposit Insurance Corporation (CDIC) was formed.

But that’s where the bad news ends.

Enter The CDIC

The good news is: if you bank at a CDIC member institution, your deposits are safe!

In a podcast interview with The Immigrant Life, Peter Routledge, immediate past President and Chief Executive Officer of Canada Deposit Insurance Corporation (CDIC) reveals that the CDIC insures eligible deposits at each of its more than 80 member institutions (including all of Canada’s big banks) up to a maximum of $100,000 (principal and interest combined) per depositor, under seven different categories (savings in a single name, TFSA, joint savings account, RRSP, RRIF, Trust account per beneficiary, property tax accounts). The protection is separate for each category which means there is a way to go beyond the $100,000 limit legally.

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.

The CDIC reimburses depositors when a member institution fails. Eligible deposits include savings accounts, chequing accounts and term deposits such as Guaranteed Investment Certificates (GICs), Registered Retirement Savings Plan (RRSPs), Tax Free Savings Accounts (TFSAs) and Registered Retirement Investment Fund (RRIFs).

CDIC is there to protect depositors.

But Do I Have a Role to Play in The Safety of My Funds?

Yes! Bank with a CDIC-insured bank and stay informed.

The CDIC has been protecting Canadians’ deposits for over five decades, but many don’t know this. It is time to know!

Is your bank a CDIC-insured bank?

Canadians have a number of options to ensure their deposits are protected. In addition to federal deposit insurance protection under CDIC, each of Canada’s 10 provinces has a provincial deposit insurer that protects provincial credit unions.

It is important for Canadians to know about deposit protection and take steps to ensure their money is safe. Depositors have to be informed about CDIC’s member institutions, insured categories and limits. You cannot keep your funds at home. They must be banked. But where?

If your bank is a member of CDIC – and you can tell by the purple lock on the door, their website, their ATMs, even on their mobile banking app – then your money is protected.

The purple CDIC sticker on CDIC-insured banks
The safest place to keep your money is in a CDIC federal institution

As a depositor, you have nothing else to do.

CDIC protection is free and automatic: no need to sign any documents and CDIC will not ask for private data from any individual.

Take steps to ensure that your money is safe by becoming informed about deposit protection.

The safest place to keep your money is in a CDIC federal institution.

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.

Got any questions? Join us in the community to discuss more on how to secure your fund.

Written by Yinka Bakare.

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