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CDIC coverage
March 30, 2020
12:32 pm
semi-retired
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Hypothetical situation.I presently have a 5 year GIC ladder included in my Investorline account with BMO,each for 25,000$$.They are with 5 different FI's,all bought from Investorline.Now the question-CDIC covers 100,000 for a RRSP account.If BMO went kaput,would I only be covered for the 100,000 stated in CDIC coverage, or the full 125,000$ + interest with the 5 GIC,s at 5 different FI's held in my account.I hope I explained the situation well.

March 30, 2020
12:40 pm
Bill
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If BMO went kaput no problem, your investments are with each of the 5 fi's, they just happen to be kept in an Investorline account.

March 30, 2020
1:31 pm
Doug
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semi-retired said
Hypothetical situation.I presently have a 5 year GIC ladder included in my Investorline account with BMO,each for 25,000$$.They are with 5 different FI's,all bought from Investorline.Now the question-CDIC covers 100,000 for a RRSP account.If BMO went kaput,would I only be covered for the 100,000 stated in CDIC coverage, or the full 125,000$ + interest with the 5 GIC,s at 5 different FI's held in my account.I hope I explained the situation well.  

Bil's reply at post # 2 is both concise and on point. To expand on that specifically, you would be covered for the full $125,000 as you're only at $25,000 with each of those FIs. Even if you dealt with one or more of those FIs directly, you would still be covered for $125,000 through BMO InvestorLine because those deposits are held in the name of The Canadian Depository for Securities, Limited, in the name of your discount brokerage firm's carrying broker (non-registered accounts) or carrying broker's trustee (registered accounts) who, in turn, beneficially hold or custody those deposits for you. This is one of the huge advantages of holding deposits through a discount brokerage firm as you could have $100,000 (inclusive of funds on deposit and unpaid interest accrued) with as many different CDIC members as are available in your discount brokerage firm's online platform. This is separate for each of the different plan types and registrations (beneficial owners) as you have.

For example, one could hold:
- 25 x $100,000 GICs with 25 different FIs in a BMO InvestorLine non-registered account in their own name;
- 25 x $100,000 GICs with 25 different FIs in a BMO InvestorLine RRIF in their own name;
- 25 x $100,000 GICs with 25 different FIs in a BMO InvestorLine joint non-registered account in the name of themselves and their spouse;
- 25 x $100,000 GICs with 25 different FIs in a BMO InvestorLine TFSA in their own name;
- 25 x $100,000 GICs with 25 different FIs in a BMO InvestorLine TFSA in their spouse's name; and,
- 25 x $100,000 GICs with 25 different FIs in a BMO InvestorLine RRIF in their spouse's name;
Total CDIC Insured: $15 million
Total Number of T5s produced in a given year: 2 (one for self and one for spouse, with a summary of how the interest paid is broken down for each)

Separately, each of the customers would be protected by CIPF to $1 million in the event of the brokerage firm's insolvency or otherwise misappropriation of funds. Funds custodied in registered accounts for the brokerage firm would be separately protected.

Cheers,
Doug

March 30, 2020
2:08 pm
Bud
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someone suggested cdic couldnt cross reference across brokerage lines

March 30, 2020
2:42 pm
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Thankyou Bill & Doug for your informative answers on this subject.These types of questions come up when you are in self quarantine & have too much spare time on your hands.Thanks again & stay safe.

March 30, 2020
4:05 pm
GICinvestor
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semi-retired said
Hypothetical situation.I presently have a 5 year GIC ladder included in my Investorline account with BMO,each for 25,000$$.They are with 5 different FI's,all bought from Investorline.Now the question-CDIC covers 100,000 for a RRSP account.If BMO went kaput,would I only be covered for the 100,000 stated in CDIC coverage, or the full 125,000$ + interest with the 5 GIC,s at 5 different FI's held in my account.I hope I explained the situation well.  

Are all 5 FI’s CDIC covered? Any credit unions in the mix? My rule of thumb is to only invest principle of $85000 per FI. Eventually you may have to move some funds out of an FI if you have accumulation of interest over 10-15 years.

We are watching my wife’s mother’s GICs and her advisor said their system will not allow over $100,000 per FI. She has about 9 FIs, all CDIC and all interest swept out monthly. Not likely to lose if one went bad.

March 31, 2020
7:50 am
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GICinvestor said

Are all 5 FI’s CDIC covered? Any credit unions in the mix? My rule of thumb is to only invest principle of $85000 per FI. Eventually you may have to move some funds out of an FI if you have accumulation of interest over 10-15 years.

We are watching my wife’s mother’s GICs and her advisor said their system will not allow over $100,000 per FI. She has about 9 FIs, all CDIC and all interest swept out monthly. Not likely to lose if one went bad.  

Yes,all the FI's are CDIC insured.When I purchase a GIC,either registered or regular,I always calculate the total with interest included & make sure it comes in under the magic # of 100 GR.Thanks for checking.

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