What CIPF does is insure against the partial or entire loss of the GIC holding itself from the account, e.g. the brokerage going insolvent and the asset itself disappearing, and/or malfeasance such as theft of the GIC from the account. It does not insure the 'value' of the GIC, just as CIPF does not insure the 'value' of a stock holding.

Example of a stock holding: Say you hold 200 shares of stock X in your brokerage account, the value of which varies daily in the stock market. What CIPF does insure your holding of those 200 shares in event some insider stole some, or all, of them or they had been inappropriately used as collateral for the brokerage's debt in insolvency.

Limits are $1M ➡️ https://www.cipf.ca/cipf-cover.....f-coverage

Dean

Norman1 said
That's correct.

Going through a client name deposit broker doesn't multiply CDIC coverage. The GIC's bought directly and via client name deposit brokers are all registered in the same client name at the issuer.

CIPF insurance covers any shrinkage of the GIC at Scotia iTRADE. There is still CDIC coverage for the nominee name GIC held by Scotia iTRADE for failure of the issuer to honor the GIC.  

Thanks Norman...

Going through a client name deposit broker doesn't multiply CDIC coverage. The GIC's bought directly and via client name deposit brokers are all registered in the same client name at the issuer.

CIPF insurance covers any shrinkage of the GIC at Scotia iTRADE. There is still CDIC coverage for the nominee name GIC held by Scotia iTRADE for failure of the issuer to honor the GIC.

There is usually different branding for the direct-to-consumer GIC's. So, one won't be able to purchase a Tangerine-branded GIC through GIC Wealth or Scotia iTRADE. Instead, one would purchase an Oaken GIC, issued by Home Trust, directly and a Home Trust GIC via GIC Wealth or Scotia iTRADE.

Norman1 said
GIC Wealth Management is a broker of client name deposits. They don't hold the GIC's. The GIC's are in the client's name and not in GIC Wealth Management's name. Cheques are made out to the GIC issuer and not to GIC Wealth Management.

That's different from brokers of nominee name deposits, like Scotia iTRADE and BMO InvestorLine. Those brokers hold the GIC's as the GIC's are in the broker's name, not in the client's name. Those brokers need insurance, like CIPF, to cover losses in case the broker fails.  

Thanks Norman. So, for clarity...

1. If I own a $100k TNG GIC an buy a $100k TNG GIC via GIC Wealth Mgmt, I have $100k CDIC Coverage on $200k?

2. If I own a $100k TNG GIC an buy a $100k TNG GIC via SB iTrade, I have $100k CDIC Coverage on my TNG $100k and $100k CIPF coverage on SB's TNG 100k?

That's different from brokers of nominee name deposits, like Scotia iTRADE and BMO InvestorLine. Those brokers hold the GIC's as the GIC's are in the broker's name, not in the client's name. Those brokers need insurance, like CIPF, to cover losses in case the broker fails.

Those financial institutions they broker for, have CDIC coverage.

Dean

If I own $100k of Tangerine GICs and buy $100k of GICs from GIC Wealth Mgmt which happen to be Tangerine GICs, I'm only CDIC covered for half my Tangerine GICs.

Correct?

gicbits said
I've seen a few ads from them and their website - https://gicwealth.ca/ - says they are covered by CDIC but when I check if GIC Wealth Management is covered on the CDIC website - https://www.cdic.ca/depositors.....s-covered/ - they are not found.

I'm wondering if this is a scam or if they have a parent company that is covered by CDIC insurance.  

Legit? Yes and they are included in the GIC Table @ https://www.highinterestsaving.....gic-rates/, at the bottom in the Brokers section.

I believe that as brokers, they "sell" GIC's from FIs that are CDIC (<=$100k) or FSRA (<=$250k) covered.

I'm wondering if this is a scam or if they have a parent company that is covered by CDIC insurance.

For a five-year bond, a $1 per $1,000 commission will reduce the yield to maturity around 0.1%/5 = 0.02%. The impact is quite substantial for a 60-day bond: around 0.1% / (60/365) = 0.6%.

That's likely why Scotia iTRADE was quietly not charging any commission on small buy orders of short term bonds.

Also, money in US treasury bills is not considered to be "on deposit". Maturing bills will trigger a capital disposition and foreign exchange capital gains/losses even when they are rolled over to newer US treasury bills.

Bonds are one area where the discount brokerages have not 'given in' yet on reduced, i.e. $0-10 commissions, perhaps because there is little to zero fintech competition. It is a bit of a PITA because I assume they make something off the Bid-Ask spread.