What's safer being over deposit insurance or spread out tiny CUs | General financial discussion | Discussion forum

Not all assets are covered by CDIC, but I assume that's not what you are referring to. In today's digital age, there is really no reason to restrict yourself to one 'big bank'. For safety and/or diversifying, you probably want a brick and mortar FI, an online bank/CU with ATMs in your city, and another in a different province. That way you should always be able to pay bills, get cash, etc.

I'd go for the small DICO CUs, all other factors being equal - which they may not be.
I like small banks too.
I figure they could be the canaries in the coal mine.
Realistically, though, your GICs are stuck until they mature, no matter where they are.

I invest in Ontario CUs because this is where I live. I think it would be a lot easier to get my money out of an FI in the province in which I live, if push came to shove - and easier for POAs and executors too. I have money in MB too because they offer some features I can't get here, including unlimited coverage.

Most, if not all, provincial economies are vulnerable to something-or-other. But Ontario is the largest; and when it falls, they will all suffer.

The Big Banks may or may not be safer, but I just can't bring myself to settle for such crappy rates. The main advantage of Big Banks, from what I can see, is that they have more international exposure - for better or worse, of course. If you truly believe they are safe, then you'd be better off buying their stock.
(Rick - I believe it was preferred shareholders who were going to be on the hook for bank defaults.)

The bigger the FI, the more varied risks it can afford to take, and some higher risks, but those risks, individually, forma a very small part of their business. It can be compared to the CPP, which invests in all kinds of things that I personally would find scary, but they are big enough that it only forms a small part of their portfolio, so it's OK for them, I guess. This is both good and bad.