CDIC aims to increase awareness

The Canada Deposit Insurance Corporation (CDIC) has launched a national public awareness campaign, primarily to remind Canadians that eligible deposits are now covered up to $100,000. This amount was raised from $60,000 in the 2005 federal budget.

“It’s simple: Canadians need to know the facts about deposit insurance so they can make informed financial decisions,” said CDIC president and chief executive officer Guy Saint-Pierre. “We are stepping up our efforts to inform consumers about the new $100,000 coverage limit.”

CDIC provides insurance against deposits in member institutions, such as banks and trust companies. Still, a surprisingly high number of people are unclear as to exactly what is — and perhaps more importantly what is not — covered by CDIC.

According to a study of Canadians who had not completed high school, more than half incorrectly believed that mutual funds are CDIC-insured. And nearly two-thirds mistakenly thought that mutual funds held by a bank are either fully or partially insured.

One-third believed incorrectly that stocks are CDIC-insured. And only 40% knew that their Canadians dollar savings accounts are insured by CDIC.

CDIC is a federal crown corporation, created in 1967. There have been 43 financial institution failures since it was formed. The last was in 1996 when Calgary-based Security Home Mortgage Corporation closed its doors. About 2,600 Canadians had deposited $42 million in the firm. All but $10,000 of the deposits were insured and CDIC paid back all insured deposits within three weeks of Security Home Mortgage’s closure.

(11/25/05)

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.