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I just want to clarify the language about the CIDC principal and interest thing...

CDIC insures all your deposits, up to $100K at the moment, whether they were initial deposits or earned and added interest.

If the interest added to existing value exceeds $100K, the portion of interest+principal that exceeds $100K is NOT covered.

If you invest more into an existing Financial Institution class (non-reg, RRSP, TFSA, etc.) then amounts over $100K are NOT covered, though they may not be interest.

Does that make simple sense to everyone?
RetirEd

HermanH said
Thanks for the suggestion. My first annual maturity date is May, so I sent an e-mail message asking if it would be possible to change the instructions from compound to annual payment. No response, yet.  

CS sucks with these guys. In my experience there is always same person who is replying to my emails. His name is Andy. Eventually he will reply to your email.

There is no proration formula. What the uninsured deposits recover depends on what the recovery is from liquidating the deposit issuer.

If there is money left after all the liquidation expenses to give creditors back 10¢ of every dollar owed, then the uninsured deposits will get back just 10% of the owed principal and interest.

The Globe article referred to to start this thread is an example of the change in the general view in Canada re China since 2016, that's what's different.

I'd guess all you can count on is CDIC coverage, can't see how the government would take liability for losses in excess of CDIC limits.

Norman1 said
There is no proration formula. What the uninsured deposits recover depends on what the recovery is from liquidating the deposit issuer.

If there is money left after all the liquidation expenses to give creditors back 10¢ of every dollar owed, then the uninsured deposits will get back just 10% of the owed principal and interest.  

The dollar amount of recovery per depositor is prorated based on each depositor’s exposure. Someone who has 10x exposure gets 10x dollar amount, but yes % of recovery of original overexposure is the same which is based on the actual total loss at the end. That is still prorated in terms of dollar amount tho.

Loonie said
I don't understand your theory of proration, savemore.
Prorating would mean the depositor gets a percentage of their deposit back, less than 100%. This is not the way it works, although it may be the result if their deposit exceeds 100K.

They are guaranteed 100% of their deposit including interest to date of liquidation, to a maximum of 100K per category, and no more.

I think you know this? There seems to be some confusion over terminology?
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I am strictly talking about the portion over the CDIC limit which is what anyone should only be concerned about. Trying to remind those who believe they will 100% of the amount over the CDIC at default is not true. Their actual loss in $terms is prorated to their exposure over the CDIC limit, but given there is always some recovery, the recovered amount is distributed to the depositors in a prorated fashion based on their exposure over the limit,

I assume those who is 100% risk averse and demand CDIC protection already know the first 100k is 100% protected. They better do, if not, they need to google first and not come to a forum. I see this forum as personal finance 201, not 101.

But yeah we are talking about the same thing.

Back to WealthONE, decided to not place any money with them regardless of term. The rate differential simply does not warrant any potential, be it customer services or access of funds.

I am not sure why anyone is surprised.
Snow-washing Chinese money is a well established fact. But of course the regulator can’t go after the big banks, small one like wealth one is okay though.

Snow-Washing Dirty Money In Canada
According to the 2018 expert panel report on Combatting Money Laundering in BC Real Estate, money laundering activity is a rapidly growing issue in Canada. The industry, estimated to be worth $41.3 billion in 2015, grew 11.6% in only three years to an astounding $46.7 billion in 2018. In 2020, the Criminal Intelligence Service of Canada estimated that money laundering in the country is worth up to $113 billion per year.

In British Columbia, laundering is known to support transnational organized crime rings, including Mexican and Colombian cartels, and Asian and Middle Eastern organized crime syndicates. Criminal networks such as these are linked to illicit drug trafficking, terrorism, and human trafficking. As a member of NATO, the UN, and as an advocate of the rules-based international order, Canada has international commitments to combat the illicit drug trade and human trafficking, and support counter-terrorism efforts. Canada’s failure to prevent money laundering on its own soil not only affects Canadians; it affects countries across the world that are exposed to these transnational threats and goes against the spirit of international agreements Canada has pledged to uphold.
https://natoassociation.ca/snow-washing-dirty-money-in-canada/?utm_source=rss&utm_medium=rss&utm_campaign=snow-washing-dirty-money-in-canada

Here’s more of the same.
Transparency International has consistently ranked Canada near the bottom of the pack of all G20 countries due to its failure to meet G20 anti-money laundering commitments. And last summer, Raymond Baker’s Global Financial Integrity (GFI) — a Washington-based think-tank focused on corruption and money laundering — issued a report that underscores Ottawa’s many failures.
GFI’s report analyzed 35 cases in Canada involving $783 million in laundered funds over five years (which is a drop in the bucket considering that a 2019 RCMP report estimated that $46.7 billion was laundered in Canada in 2018 alone).

It found that about half the money laundered through Canadian real estate came from outside the country, with China accounting for nearly a quarter of the foreign funds. Of the domestic money laundered through real estate, well over half came from drug trafficking.
The top “facilitators” of the laundered money were lawyers (22.8 per cent), real estate agents (14.2 per cent) and developers (11.4 per cent). The top ways in which money was laundered included anonymous company structures (51.4 per cent), third-party accessories (45.7 per cent), mortgage schemes (34.2 per cent), private loans (17.1 per cent), renovations (5.7 per cent) and leasing schemes (5.7 per cent). Some also used the immigrant investor program and overvaluation of property schemes (overpaying to pay off the seller tax-free), according to the report.
https://theprovince.com/diane-francis/diane-francis-foreign-home-buyers-ban-money-laundering/wcm/ae7ff300-1837-487c-89b2-39aa6a7741d6

The issue with Wealth One isn’t just about “snow-washing” but about security and the fact that the founders were vulnerable to blackmailing by Chinese communists. And this isn’t the regulator but the government finally taking action.