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Email this7:56 am
May 9, 2012
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I am trying to work out the rules around CDIC and I was hoping to get some confirmation from the folks on this outstanding forum.
The CDIC page (http://www.sadc.ca/en/about-di.....fault.aspx) indicates deposits in a joint account are insured up to $100K. However, if a couple creates separate single named accounts they could insure up to $100K each. If a couple were to create separate single named accounts and a joint account then they could insure up to $300K at a single institution. Is this correct?
Is this a simple way of getting around the $100K limit or are there issues I should be aware of (e.g. the bank may prevent these multiple accounts)?
12:03 pm
February 17, 2013
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Heddie said
I am trying to work out the rules around CDIC and I was hoping to get some confirmation from the folks on this outstanding forum.The CDIC page (http://www.sadc.ca/en/about-di.....fault.aspx) indicates deposits in a joint account are insured up to $100K. However, if a couple creates separate single named accounts they could insure up to $100K each. If a couple were to create separate single named accounts and a joint account then they could insure up to $300K at a single institution. Is this correct?
Is this a simple way of getting around the $100K limit or are there issues I should be aware of (e.g. the bank may prevent these multiple accounts)?
According to link you supplied, yes, you can have 3 separate accounts with CDIC coverage at the same institution. If you want ALL your eggs in one basket, you could open up a TFSA and RSP account each and have up to 700,000 coverage combined. The rules seem fairly straight forward. I have never heard of any bank refusing multiple accounts to skirt CDIC limits. I'm sure they don't care. Personally, I believe that if we get into a situation where CDIC has to start covering after a total collapse, the insurance will be far short of 100K per account, if any at all. If we get to that point, look for the 4 horsemen of the apocalypse.
6:57 pm
October 21, 2013
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I believe Rick is correct.
One thing you might want to bear in mind is that all non-registered deposits in one name or joint names come under the one umbrella. In other words, if you, as an individual or jointly, have 10K in a savings account, 10K in a chequing account, and GICs worth 85K on maturity, you are beyond the 100K limit.
When buying GICs, use the maturity value to count to your maximum.
In addition, some banks have more than one insured entity within them, so that you can multiply the coverage by having your money in more than one of these. Of those that offer higher rates, only Oaken has this, to my knowledge, in the form of Home Bank and Home Trust. I believe the "Big Banks" all have this capability.
Bear in mind too that some credit union systems have greater coverage.
No worries about the banks not allowing it. They all pay premiums for this insurance. However, Oaken will proactively inform you about it but the others won't. The others seem to believe that they are invincible and that you would never need it and shouldn't worry yourself about it. At TD, they obviously thought I was nuts for insisting on spreading out my money between TDBank and TD Mortgage Co., but they did it.
10:10 am
December 20, 2016
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2:07 pm
September 11, 2013
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Nehpets, here's an example to be found at that link: "Let’s say you have $200,000 in a savings account. One way to maximize your CDIC coverage, assuming you’re married, would be to simply transfer $100,000 of the total into a joint chequing account at the same financial institution. Granted, you would not receive much, if any interest on the chequing portion, but with one simple action you would have made sure that the entire $200,000 was government-backed."
It's not entirely clear who "you" is (one spouse? both?) or why this is the advice given, but wouldn't it be better to have two savings accounts earning interest, one in each spouse's name? Or one in one spouse's name and the other joint? It's erroneous to imply moving money from a savings into a chequing account has anything to do with increasing a depositor's insured amount, the only relevant point is that the accounts need to be held in different names.
I prefer to go to the horse's mouth, it's fairly easy to understand the info here:
http://www.cdic.ca/en/about-di.....fault.aspx
4:40 pm
December 20, 2016
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Bill said
Nehpets, .....wouldn't it be better to have two savings accounts earning interest, one in each spouse's name? Or one in one spouse's name and the other joint? It's erroneous to imply moving money from a savings into a chequing account has anything to do with increasing a depositor's insured amount, the only relevant point is that the accounts need to be held in different names.
You are quite right, Bill. I overlooked that comment when reading the article, and the advice seems to be wanting for clarity.
As a side benefit to this thread, however, earlier comments did underscore the importance of determining the maturity amount of a GIC as opposed to the invested amount, when dealing with GIC deposits close to 100K.
I've added a formula to my own spreadsheet to compute the projected GIC maturity amounts, and in doing so discovered one that exceeded 100K at maturity.
The good news, in that particular case, is that it would only go over the 100K after January 1, 2018, when DICO maximum increases to 250K.
The GIC in question is with an Ontario credit union.
A useful lesson learned from the insights of Forum members.
Stephen (Nehpets is the Forum username (my name spelled backwards) , as Stephen was already taken when I registered..
Please write your comments in the forum.