Question

1. How do you think the deposit insurance from CDIC contributes to the wellbeing of Canadians? How can you become eligible?

Answer 1

The Canada Deposit Insurance Corporation (CDIC) is a Canadian federal Crown Corporation to provide deposit insurance to depositors in Canadian commercial banks and savings institutions. It provides insurance cover to its member institutions, which include federally regulated deposit taking institutions such as banks, trust companies, loan companies, and federal credit unions. CDIC is not a bank or a private insurance company, instead it is a corporation formed for the wellbeing of depositors for minimizing loss, it also contributes to the stability of the Canadian financial system by providing deposit insurance against the loss of part or all of eligible deposits held in each member institution up to a maximum of $ 100000 ( principal and interest combined ) in the event of failure.

To be eligible for CDIC insurance, deposits must be payable in Canada, in Canadian currency. Hence if it is recorded at a branch or office of a CDIC member institution in Canada, it is eligible for CDIC coverage. Eligible deposits for insurance cover under CDIC include savings accounts, checking accounts, term deposits with original terms to maturity of five years or less, debentures issued to evidence deposits by CDIC member institutions, money orders and bank drafts issued by CDIC members, and checks certified by CDIC members.