It’s possible to get back up to $800,000, but it’s not so simple!
Basically it depends how much you have in each account and kind of instruments. The Canada Deposit Insurance Corporation (CDIC) has eight deposits account categories –
- Single account
- Joint deposits
- Tax-free savings account (TFSA)
- Registered retirement savings plan (RRSP)
- Registered retirement income fund (RRIF)
- Registered education savings plan (RESP);
- Registered disability savings plan (RDSP)
- Trust accounts
Theoretically, you get the coverage up to 100k in each account. So it’s possible to have coverage of $800,000 by CIDC.
However this coverage only includes cash in savings and chequing accounts, Guaranteed Investment Certificates (GICs) for less than 5 year term and some term deposits. Your investment in stocks, bonds, mutual funds, ETFs, cryptocurrencies are not included in this protection.
Example, how the coverage calculated
For example, in your one account if you hold $50,000 cash, $80,000 in GIC’s and $150,000 in mutual funds and stocks. CIDC will only guarantee $100,000 out of the total $280,000 amount even though your cash and GIC amount is insured, because maximum return guarantee for one account is $100,000.
How to plan better?
Have multiple accounts in case your amount is exceeding over $100,000 even if it’s a registered account such as RRSP or TFSA.
Also, it’s always a good idea to have your investment account in different institutes since most investment products are not covered by CDIC. So in case one bank or institute goes bust you don’t lose it all.
Trust accounts are also a good option as up to $100,000 coverage is provided to each beneficiary. For example if there 3 beneficiaries there will be $300,000 coverage for that account.
Not all banks are the same!
Be extra careful with Chartered Banks as they have some special privileges. These banks can convert a depositor’s money over $100,000.00 to bank shares without any consent from depositor’s. And it’s often seen when times are tough on banks for liquidity their bank shares are almost worthless as no one wants them.