Are Your Deposits in Canadian Banks and Credit Unions Insured?

Ask MoneySense

We live in Ontario, and with recent banking issues in the U.S. we’re worried about our savings and investments.

Our money is split among three banks, mostly in GICs and high‑interest savings accounts.

We know the Canada Deposit Insurance Corporation (CDIC) insures up to $100,000 per bank, but our TFSAs at one bank exceed that amount.

What would you recommend?

—Mrs. B

Understanding the risk of exceeding deposit limits at Canadian banks

The collapse of Silicon Valley Bank in March — ultimately taken over by the U.S. Federal Deposit Insurance Corporation — reminded many Canadians that bank failures can happen, and that uninsured deposits are vulnerable. SVB’s failure highlighted two primary problems: poor interest‑rate risk management and very high levels of uninsured deposits. Bank failures like that can prompt concern about contagion and a broader loss of confidence in the financial system.

In Canada, bank failures are rare. Over the past century, only two domestic banks — Northland Bank and Canadian Commercial Bank — failed, both in 1985. Today, most deposits at member banks are protected by the Canada Deposit Insurance Corporation (CDIC), which provides limited insurance on eligible deposits.

How CDIC coverage works

CDIC insures eligible deposits at each member institution up to $100,000 per category. Eligible deposit types typically include bank chequing and savings accounts, guaranteed investment certificates (GICs) and term deposits. Crucially, the $100,000 limit applies per CDIC member and per deposit category, which means your total protected amount can be larger than $100,000 depending on how your accounts are structured.

Deposits held only in your name (for example, personal chequing and savings accounts).
Deposits held in more than one person’s name (for example, joint accounts).
Deposits held in trust, where protection applies for each beneficiary.
Deposits held in a tax‑free savings account (TFSA).
Deposits held in a registered retirement savings plan (RRSP).
Deposits held in a registered retirement income fund (RRIF).
Deposits held in a registered education savings plan (RESP).
Deposits held in a registered disability savings plan (RDSP).

Because protection is separated by type, a single bank can effectively provide more than $100,000 in coverage if you hold accounts across different categories. For example, a savings account, a TFSA and an RRSP at the same CDIC member could be insured separately, offering up to $300,000 in total protection.

Multiple issuers under one brand

Some large banking groups operate multiple legal entities that each qualify for CDIC coverage. For instance, Royal Bank of Canada lists several distinct entities such as Royal Bank Mortgage Corporation, Royal Trust Company and RBC Investor Services Trust — each one can carry its own CDIC protection. That structure can allow clients to obtain additional coverage within the same overall banking group, depending on how their accounts are held and which entity issues the deposit product.

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When your deposits are at risk

In your situation, Mrs. B, having more than $100,000 in a TFSA with a single issuer means part of those funds could be uninsured if that issuer failed. The first step is to speak with your financial institution to determine whether multiple CDIC‑member entities within the same banking group hold your TFSA deposits. If multiple issuers cover those deposits, you may already have more protection than it appears.

If that isn’t the case, consider these options: spread your TFSA deposits across other CDIC member institutions, move some funds into different covered account categories, or diversify into other suitable investments. If you withdraw funds from a TFSA and plan to redeposit them, remember TFSA contribution room is only restored on January 1 of the following year, so avoid inadvertent overcontributions.

What CDIC does not insure — and alternative protections

CDIC does not insure investments such as mutual funds, stocks, bonds, exchange‑traded funds (ETFs) or cryptocurrencies. For investment products held at brokerages and investment dealers, protection may instead come from the Canada Investor Protection Fund (CIPF). CIPF covers “property” held by a member firm on behalf of a client if the member firm becomes insolvent, but it does not protect against market losses.

CIPF provides limits such as:

Up to $1 million combined for general accounts (cash accounts, margin accounts and TFSAs).
Up to $1 million combined for registered retirement accounts (RRSPs, RRIFs and similar plans).
Up to $1 million combined for RESPs where the client is the plan subscriber.

For joint accounts, each account holder is protected for their proportionate interest up to the applicable general account limit.

Credit union deposit insurance

Credit unions use different deposit insurance arrangements that vary by province. In Ontario, for example, deposits at member credit unions are insured by the Deposit Insurance Reserve Fund (DIRF) up to $250,000 for most accounts, while registered accounts such as TFSAs and RRSPs have unlimited protection through the DIRF. Several provinces offer unlimited coverage for credit union deposits in the event of a failure, so it’s important to check the rules that apply where your credit union operates.

Practical steps to reduce risk

To protect larger cash balances, consider these straightforward steps:

Confirm CDIC membership and the legal issuer of each deposit product with your bank.
Spread deposits across multiple CDIC member institutions or across different account categories to maximize insured amounts.
Review whether your bank operates multiple subsidiaries that each carry CDIC coverage.
Consider diversifying investments into accounts or products covered by CIPF if appropriate for your risk profile.
Before moving money, check TFSA contribution rules to avoid accidental overcontributions and lost contribution room.

If your funds are held with one of the largest Canadian banks, a failure would be widespread news and a significant event for the economy. While that is unlikely, maintaining an awareness of deposit insurance rules and organizing accounts to match your tolerance for risk is a practical way to manage exposure.