Deposit Insurance in Canada Canadians have always been pragmatic and far-seeing people and as such, they have established a state-run body to insure their hard-earned deposits against possible financial risks. These have become quite probable since the outbreak of the global financial crisis. The Canadian Deposit Insurance Corporation is a state-run risk management body whose members are some of the biggest and most respected financial institutions in the country – the big banks and middle size banking institutions, credit card companies, etc. Structure and Organization Being neither an insurance company nor a bank, CDIC was founded with a decision of the federal government in 1967. Its main function was to protect the deposits of Canadian citizens or permanent residents that are entrusted to members of the Corporation in the event they go bankrupt. Canadian citizens do not need to sign an insurance agreement with CDIC, as their savings become automatically insured once they open a deposit account with some of the CDIC members across the country. Bank institutions, in turn, fund deposit insurances in the form of premiums that are payable for each insured deposit held in them. What kinds of deposits are insured by CDIC? It is important to know that not all savings made in Canada qualify for this type of insurance. The Canadian Deposit Insurance Corporation takes care of savings and checking accounts, guaranteed investment certificates or any other term deposits whose term of maturity is five years or less, as well as certified cheques, travellers' cheques, money orders, bank drafts issued by any of the Corporation’s members, and accounts holding realty taxes on mortgage properties. On the other hand, CDIC does not cover stocks and mutual funds, guaranteed investment certificates or other term deposits with a term of maturity longer than five years, as well as state bonds and treasury bills. Note that the CDIC insurance does not cover financial instruments or deposit accounts in US dollars or any other foreign currency. Finally, the CDIC insurance does not cover any deposits made with financial institutions that are not members of the Canadian Deposit Insurance Corporation. Where are your savings insured by CIDC? While most of the largest banks in Canada are members of the Canadian Deposit Insurance Corporation, there are certain financial institutions that are not CDIC members, such as some credit unions and caisses populaires, foreign banks' branches based in Canada, as well as a number of Canadian chartered banks. If you hold deposits with credit unions and caisses populaires, you may rely on provincial deposit insurance programs, while the Canadian branches of foreign banks, and the Canadian chartered banks that are not members of the Canadian Deposit Insurance Corporation are required to promptly inform their customers of the fact that their savings are not covered by CDIC insurance. It is best to always ask whether your savings are covered by CDIC, if you are looking for a greater degree of security. If a CDIC member fails, and it has happened in the past, you will receive up to $100,000 Canadian dollars of your deposited money back. The following Canadian banks are members of CDIC – Royal Bank of Canada, Bank of Montreal, TD Bank, CIBC, and Scotiabank. (Note that CDIC has many more members, and the banks we list are just an example).