**This is a sponsored post written by me on behalf of Canada Deposit Insurance Corporation. All opinions are my own.
The Canada Deposit Insurance Corporation (CDIC) is a federal Crown corporation that was created in 1967 to provide deposit insurance for Canadians. Although a Canadian bank hasn’t failed since 1996, many Canadians are still worried about their money. I don’t blame them, if you’ve got money in a bank, you want to ensure that you’ll get it back in the rare event that they become insolvent.
That’s where CDIC comes in. Their role is to ensure Canadians get their money back in a timely manner if their bank fails. Many Canadians have some understanding of how CDIC works, but there are some changes coming later this year and in 2021 that will affect you.
To help educate you about CDIC, play the following quiz. As an added incentive, you can win a $500 Air Canada gift card if you leave a comment below. Be sure to read the contest details below before you enter. Now let’s learn about CDIC.
#1) What is the coverage limit per category at CDIC?
- A – $50,000
- B – $100,000
- C – $500,000
- D – $1,000,000
The answer is B, $100,000. CDIC protects up to $100,000 (including principal and interest) per deposit category. What that means is that you actually get additional coverage since there are 7 categories including joint accounts with a spouse, joint accounts with a parent, Tax-Free Savings Accounts and Registered Retirement Saving Plans. This is per member so if you were to spread out your accounts, you could easily get even more protection with CDIC.
#2) Are foreign currencies covered by CDIC?
- A – Yes
- B – No
The answer is B, No. Although foreign currencies are currently not covered by CDIC, that all changes come April 30th, 2020 when they will be protected. The same $100,000 limit per category still applies and your foreign currency must be deposited at a CDIC member. One thing to note, as of April 30th, 2020, travellers’ cheques will no longer be covered by CDIC, but who uses those anymore?
#3) How many Canadian banks have failed since CDIC was introduced?
- A – 3
- B – 12
- C – 29
- D – 43
The answer is D, 43. This may be shocking to some people since CDIC currently has 86 members, but here’s the thing, not one dollar under CDIC protection was lost to these failures. In the event a bank fails, CDIC will step in right away and reimburse your money up to 100k per eligible category.
#4) What are some types of accounts covered by CDIC?
- A – Tax-Free Savings Accounts and Registered Retirement Saving Plans
- B – Registered Education Savings Plans and Registered Disability Savings Plans
- C – All of the above
The answer is C, all of the above. Eligible deposits in Tax-Free Savings Accounts and Registered Retirement Saving Plans, as well as those in Registered Education Savings Plans and Registered Disability Savings Plans that are structured as a trust, are covered.
#5) What type of investments are covered by CDIC?
- A – Stocks
- B – Bonds
- C – Mutual funds
- D – Guaranteed Investment Certificates
- E – All of the above
The answer is D, Guaranteed Investment Certificates (GICS). Investment products such as bonds, mutual funds, stocks and cryptocurrency are not covered by CDIC. Your GICs and other term deposits with original terms to maturity of five years or less are covered. As of April 30, 2020, there will be extended coverage of eligible deposits with terms greater than 5 years.
#6) Is it easy to find out if your deposits are covered by CDIC?
- A – Yes
- B – No
The answer is A, Yes. When you walk into a physical branch that’s a CDIC member, they’ll have a big purple CDIC sticker displayed on their door. This purple logo is also displayed on member financial institution websites and in their banking apps. You can also check the CDIC website to see if your financial institution is a member. Note that sometimes they’re listed under their parent company. For example, Oaken Financial falls under Home Trust Company and Home Bank. CDIC also has an online estimator to help you calculate your coverage.
Contest: Win a $500 Air Canada gift card
Share what you learned about CDIC in the comments for a chance to win a $500 Air Canada gift card. Ensure your comment is made by March 23, 2020. The winner will be announced on March 25, 2020.
Check out the CDIC website to get more info about the upcoming changes to deposit insurance.
Contest terms & conditions:
- Open to Canadians only
- A comment must be left in the comments below
- One entry per email
- Contest ends March 23, 2020
Win $10,000 in travel vouchers
Now that you’ve learned a little bit about CDIC and commented for the chance to win a $500 Air Canada gift card, you’ll want to play CDIC’s Rain or Shine? Financial Challenge where $10,000 in travel vouchers are up for grabs! Head to the site now to test your financial literacy skills. While doing so, you’ll earn entries for the contest. The game is currently live and runs until March 31, 2020, but don’t wait, head there now!