CIDC limits: GICs within RRSP Brokerage Acct. | GIC discussions | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

sp_Feed Topic RSS sp_TopicIcon
CIDC limits: GICs within RRSP Brokerage Acct.
June 19, 2022
6:19 pm
AuntiD
Member
Members
Forum Posts: 3
Member Since:
June 9, 2022
sp_UserOfflineSmall Offline

Newbie Question: Goal: Within RRSP Brokerage Accounts, to keep within CDIC limits with multiple GIC's.
I have an EQ Bank account, with GIC $ in an RSP . IF i were to also buy an additional EQ GIC within an RRSP, offered through TD Direct Investing, would these 2 deposits be considered under the same 100K limit since they are both provided by EQ?

June 19, 2022
10:17 pm
HermanH
Member
Members
Forum Posts: 442
Member Since:
April 14, 2021
sp_UserOfflineSmall Offline

Yes, the 100K CDIC limit is aggregate for the issuing institution per class.

June 19, 2022
10:32 pm
blake
Member
Members
Forum Posts: 32
Member Since:
December 29, 2021
sp_UserOfflineSmall Offline

AuntiD said
Newbie Question: Goal: Within RRSP Brokerage Accounts, to keep within CDIC limits with multiple GIC's.
I have an EQ Bank account, with GIC $ in an RSP . IF i were to also buy an additional EQ GIC within an RRSP, offered through TD Direct Investing, would these 2 deposits be considered under the same 100K limit since they are both provided by EQ?  

Consider 85,000 or 90,000. If you invest 100,000 the interest would not be covered by CDIC, if things went south.

June 19, 2022
11:23 pm
AuntiD
Member
Members
Forum Posts: 3
Member Since:
June 9, 2022
sp_UserOfflineSmall Offline

Thank you for clarifying. So "issuing institution" in this case, is considered as EQ Bank, rather than the Direct Investing Brokers such as RBC, TD, etc.

June 19, 2022
11:33 pm
Norman1
Member
Members
Forum Posts: 5026
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Issuer would be Equitable Bank. EQ Bank is just a marketing name.

They would not be under the same $100,000 deposit insurance limit because the deposits are of different types and in different names.

Right now, the EQ Bank RRSP GIC would be an Equitable Bank RRSP-type GIC in the annuitant's name. The wording of the EQ Bank Retirement Savings Plan Agreement suggests the RRSP is a contract plan and not a trust.

The TD Direct Investing RRSP is an RRSP trust with trustee The Canada Trust Company. An Equitable Bank GIC in that RRSP would be an Equitable Bank regular GIC in the name of The Canada Trust Company, in trust for the RRSP trust.

CDIC: For Brokers and other financial professionals explains the situation with brokered deposits that are in nominee name.

June 20, 2022
2:52 am
savemoresaveoften
Member
Members
Forum Posts: 1322
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline

Norman1 said
Issuer would be Equitable Bank. EQ Bank is just a marketing name.

They would not be under the same $100,000 deposit insurance limit because the deposits are of different types and in different names.

Right now, the EQ Bank RRSP GIC would be an Equitable Bank RRSP-type GIC in the annuitant's name. The wording of the EQ Bank Retirement Savings Plan Agreement suggests the RRSP is a contract plan and not a trust.

The TD Direct Investing RRSP is an RRSP trust with trustee The Canada Trust Company. An Equitable Bank GIC in that RRSP would be an Equitable Bank regular GIC in the name of The Canada Trust Company, in trust for the RRSP trust.

CDIC: For Brokers and other financial professionals explains the situation with brokered deposits that are in nominee name.  

So any GIC held within a registered account with a bank owned discount broker would be held under a nominee name (in trust) ? And whether it’s covered or not depends on the setup it seems ?

June 20, 2022
7:30 am
AltaRed
BC Interior
Member
Members
Forum Posts: 1794
Member Since:
October 27, 2013
sp_UserOfflineSmall Offline

AuntiD said
Thank you for clarifying. So "issuing institution" in this case, is considered as EQ Bank, rather than the Direct Investing Brokers such as RBC, TD, etc.  

Brokerages are just agents, order takers, etc. They don't 'issue' anything nor are they listed members of CDIC.

June 20, 2022
8:36 am
Norman1
Member
Members
Forum Posts: 5026
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

savemoresaveoften said

So any GIC held within a registered account with a bank owned discount broker would be held under a nominee name (in trust) ? And whether it’s covered or not depends on the setup it seems ?

Yes, that will be the case if the RRSP account is organized as a trust, as it would be at TD Direct Investing and Scotia iTRADE.

There is coverage. The question is whether there is separate coverage. If not enough info is provided to the GIC issuer, then it will just be a single $100,000 limit shared by the client GIC's in all the broker's RRSP accounts.

June 20, 2022
9:13 am
blake
Member
Members
Forum Posts: 32
Member Since:
December 29, 2021
sp_UserOfflineSmall Offline

AuntiD said
Thank you for clarifying. So "issuing institution" in this case, is considered as EQ Bank, rather than the Direct Investing Brokers such as RBC, TD, etc.  

And do keep in mind that a broker is receiving at least .25% to handle the GIC. And in some cases you will do better, percentage wise, by not using a broker.

June 21, 2022
6:28 pm
COIN
Member
Members
Forum Posts: 647
Member Since:
March 15, 2019
sp_UserOfflineSmall Offline

One side comment. They really need to raise the CDIC limit. That $100,000 limit was set many years ago and should now be increased to at least $250,000.

June 22, 2022
5:01 am
savemoresaveoften
Member
Members
Forum Posts: 1322
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline

COIN said
One side comment. They really need to raise the CDIC limit. That $100,000 limit was set many years ago and should now be increased to at least $250,000.  

I see the problem of that being the CDIC members will now pay 2.5x insurance premium than they are currently paying. And that cost will pass thru in the form of higher fee, and will affect the lowest income sector (the ones that pays the most fee.) It will have no impact on me and many others on this site, but we are not the majority. So its a balancing act (the average person dont have $100k sitting in GIC or bank account I would imagine)

June 22, 2022
5:29 am
Bill
Member
Members
Forum Posts: 3081
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

In my entire life I'm not sure I've met anyone who has mentioned to me the CDIC limit problem, guess it affects almost no-one, not a public issue at all. Though it does seem absurd for RRIFs and RRSPs, what do people who are market-averse and only want GICs do - have various, small registered accounts all over the place? Or is the premise either that there are very few of those people or, based on interest rates for decades, that those folks won't have large balances anyway?

June 22, 2022
7:30 am
COIN
Member
Members
Forum Posts: 647
Member Since:
March 15, 2019
sp_UserOfflineSmall Offline

"what do people who are market-averse and only want GICs do - have various, small registered accounts all over the place?"

Yes, they scatter their hard earn funds over several different institutions to maximize the deposit guarantees. Even more so now after the Home and Pace debacle.

June 22, 2022
11:01 am
AuntiD
Member
Members
Forum Posts: 3
Member Since:
June 9, 2022
sp_UserOfflineSmall Offline

Bill said
In my entire life I'm not sure I've met anyone who has mentioned to me the CDIC limit problem, guess it affects almost no-one, not a public issue at all. Though it does seem absurd for RRIFs and RRSPs, what do people who are market-averse and only want GICs do - have various, small registered accounts all over the place? Or is the premise either that there are very few of those people or, based on interest rates for decades, that those folks won't have large balances anyway?  

My question re: CDIC limit was more specifically asking about limits per or provider/bank. For example: If I purchase an EquitableBank RSP GIC through TD Direct Brokerage, and also hold an account at EQ and buy an RSP GIC directly through Equitable Bank, would CDIC ultimately consider these 2 GIC's as separate (CDIC 200k Limit)? Or would CDIC consider EQ being singular source under the 100K limit. If that's the case, I would be careful to not choose an EQ Bank GIC through TD Direct Investing, in order avoid going over the CDIC limit.

June 22, 2022
11:26 am
HermanH
Member
Members
Forum Posts: 442
Member Since:
April 14, 2021
sp_UserOfflineSmall Offline

I am currently in a similar situation with WealthOne. I purchased 100K in GICs directly with them. Now, a GIC broker is also offering GICs issued WealthOne. Unfortunately, I am already at my limit with WealthOne. So, any additional GIC purchases from the broker would put me over the 100K limit for non-registered funds with WealthOne. The fact that the GICs are being sold by a broker on behalf of WealthOne does not increase the CDIC limits for non-registered deposits. The same limitation would apply to the $100K coverage for RRSP deposit limits.

June 22, 2022
12:20 pm
Norman1
Member
Members
Forum Posts: 5026
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

That depends on how the broker places the GIC.

As the CDIC page describes, the broker can register the GIC directly in the name of the client (in-client-name) or the broker can register the GIC in the broker's name in trust for the client (in-nominee-name).

There can be multiplication of CDIC coverage with the in-nominee-name case.

Please write your comments in the forum.