CIDC limits: GICs within RRSP Brokerage Acct. | GIC discussions | Discussion forum

AuntiD said
Newbie Question: Goal: Within RRSP Brokerage Accounts, to keep within CDIC limits with multiple GIC's.
I have an EQ Bank account, with GIC $ in an RSP . IF i were to also buy an additional EQ GIC within an RRSP, offered through TD Direct Investing, would these 2 deposits be considered under the same 100K limit since they are both provided by EQ?  

Consider 85,000 or 90,000. If you invest 100,000 the interest would not be covered by CDIC, if things went south.

Issuer would be Equitable Bank. EQ Bank is just a marketing name.

They would not be under the same $100,000 deposit insurance limit because the deposits are of different types and in different names.

Right now, the EQ Bank RRSP GIC would be an Equitable Bank RRSP-type GIC in the annuitant's name. The wording of the EQ Bank Retirement Savings Plan Agreement suggests the RRSP is a contract plan and not a trust.

The TD Direct Investing RRSP is an RRSP trust with trustee The Canada Trust Company. An Equitable Bank GIC in that RRSP would be an Equitable Bank regular GIC in the name of The Canada Trust Company, in trust for the RRSP trust.

CDIC: For Brokers and other financial professionals explains the situation with brokered deposits that are in nominee name.

AuntiD said
Thank you for clarifying. So "issuing institution" in this case, is considered as EQ Bank, rather than the Direct Investing Brokers such as RBC, TD, etc.  

Brokerages are just agents, order takers, etc. They don't 'issue' anything nor are they listed members of CDIC.

AuntiD said
Thank you for clarifying. So "issuing institution" in this case, is considered as EQ Bank, rather than the Direct Investing Brokers such as RBC, TD, etc.  

And do keep in mind that a broker is receiving at least .25% to handle the GIC. And in some cases you will do better, percentage wise, by not using a broker.

COIN said
One side comment. They really need to raise the CDIC limit. That $100,000 limit was set many years ago and should now be increased to at least $250,000.  

I see the problem of that being the CDIC members will now pay 2.5x insurance premium than they are currently paying. And that cost will pass thru in the form of higher fee, and will affect the lowest income sector (the ones that pays the most fee.) It will have no impact on me and many others on this site, but we are not the majority. So its a balancing act (the average person dont have $100k sitting in GIC or bank account I would imagine)

"what do people who are market-averse and only want GICs do - have various, small registered accounts all over the place?"

Yes, they scatter their hard earn funds over several different institutions to maximize the deposit guarantees. Even more so now after the Home and Pace debacle.

I am currently in a similar situation with WealthOne. I purchased 100K in GICs directly with them. Now, a GIC broker is also offering GICs issued WealthOne. Unfortunately, I am already at my limit with WealthOne. So, any additional GIC purchases from the broker would put me over the 100K limit for non-registered funds with WealthOne. The fact that the GICs are being sold by a broker on behalf of WealthOne does not increase the CDIC limits for non-registered deposits. The same limitation would apply to the $100K coverage for RRSP deposit limits.

I just called GIC Direct to ask about brokers purchasing GICs in-client-name to extend CDIC coverage and learned that there are limitations. I would have to register with their IPC brokerage service (more regulated) and pay $15 / GIC. For non-reg products, I would not pay annual fees, but had to have a min. 500K with the IPC brokerage. Also, the GIC rate offered (4%) was less than the GIC Direct 4.32% offering. I think it significant to note the difference between brokerage and GIC broker(age).