How CDIC insurance keeps your savings safe

You might already have insurance for your car or your house. But did you know that you have insurance on the money you hold in the bank? Best of all, it’s free!

With Manulife Bank, your eligible deposits are insured for a maximum of $100,000 in each insured category (don’t worry, we’ll go over what this means soon!)

That’s right – Manulife Bank is a member of the CDIC. This means your eligible deposits are automatically insured – so you don’t need to apply, sign up, or opt in to take advantage of this coverage.

What is the CDIC, anyways?

The CDIC, or Canada Deposit Insurance Corporation, is a Crown corporation that protects customers’ eligible deposits held at many Canadian banks and other financial institutions. As a member, Manulife Bank pays premiums to the CDIC to make sure that your eligible deposits are kept safe if our bank ever were to fail.

As of 2020, there are over 80 banks and other financial institutions that are CDIC members. If you’re a customer of another bank and you’re curious about whether they’re a CDIC member, check this list on CDIC's website

Three things you need to know about your deposit insurance

1. Understand what types of deposits are eligible

Lucky for us, the CDIC makes things simple! Here’s what they cover as of April 30, 2020:

  • Savings and chequing accounts (held in Canadian and foreign currencies)
  • Guaranteed Investment Certificates (GICs)

And they don’t cover:

  • Mutual funds
  • Stocks
  • Bonds
  • Cryptocurrencies

This means that eligible deposits in what we call our ‘deposit products’ are covered. This includes:

Positive balances held in our mortgage accounts – such as Manulife One, Manulife One for Business, and Manulife Bank Select – are also eligible for coverage.

2. Understand your limits

We mentioned before that your eligible deposits are covered for a maximum of $100,000 for each insured category. This $100,000 includes principal and interest.

There are actually seven categories that are each eligible for up to $100,000 in coverage. They are:

  • Deposits you own by yourself
  • Joint deposits that you own with someone else
  • RRSP (Registered Retirement Savings Plan) deposits
  • RRIF (Registered Retirement Income Fund) deposits
  • TFSA (Tax-Free Savings Account) deposits
  • Deposits held in trust
  • Deposits held in mortgage property tax accounts

To show you how this works, we’ll use this example provided by the CDIC:

If you have an RRSP that includes:

  • $ 40,000 in a one-year GIC ✓
  • $ 50,000 in a two-year term deposit ✓
  • $ 50,000 in stocks and bonds ✗
  • $ 80,000 in mutual funds ✗

$90,000 of the $220,000 would be covered by CDIC.

How come? Well, the GIC and term deposit are eligible deposits held within an RRSP. As we mentioned before, eligible deposits within one category are insured for up to $100,000.

CDIC insurance doesn’t cover stocks, bonds or mutual funds, so the remaining $130,000 held in those investments wouldn’t be covered.

Want to learn more about how these categories work? Check out this breakdown.

3. Calculate your coverage

Now that you know what kinds of deposits are eligible, and you understand how the limits to CDIC’s deposit insurance coverage work – you’re ready to calculate your coverage!

Not a fan of math? No problem. To make this easy, the CDIC has created a handy calculator that you can use to figure out the maximum coverage you’re eligible for. And if you have any extra questions about CDIC insurance or you’re looking for a deeper dive, check out the CDIC’s website.