Example 1: You have the following deposits at NBC and CWB entities before the merger.
Here’s what does and does not qualify for CDIC coverage:
About your CDIC coverage
Protecting your deposits
The Canada Deposit Insurance Corporation (CDIC) is a federal Crown corporation that contributes to the stability of the Canadian financial system. It provides deposit insurance against the loss of all or part of eligible deposits at member institutions in the event of failure. The CDIC covers certain eligible deposits in Canadian and foreign currency for up to CA $100,000 in each of CDIC’s insurance categories, and applies to deposits held in trust, joint accounts and registered and non-registered accounts.
Covered by CDIC
- Deposits in Canadian or foreign currency
- Term deposits, including Guaranteed Investment Certificates (GICs)
- Bank drafts and money orders
Not covered by CDIC
Stocks
Bonds
Mutual funds
Exchange-Traded Funds (ETFs)
Cryptocurrencies
What happens to my current CDIC coverage?
If two or more CDIC member institutions merge, insured deposits made at each institution before the merger continue to be insured separately up to $100,000 per depositor per category, as if the institutions had not combined, for two years after the merger, or until term deposits mature or are redeemed.
In other words, insured deposits by a client at Canadian Western Bank and National Bank of Canada before the joining of the two banks will continue to be insured separately.
This coverage applies for up to $100,000 per depositor per category for two years after the merger, or until term deposits mature or are redeemed. The amount of separate coverage is adjusted according to withdrawals from those deposits or the maturation or redemption of term deposits, as per CDIC regulations.
Please speak to your Relationship Manager for more information.
How new deposits are covered
Coverage for new deposits at National Bank after the joining of the two banks depends on the total deposits the client had at the member institutions before they merged. For example:
- If your total deposits in a category already exceeded $100,000 before the merger, then new deposits will not be insured by CDIC.
- If your total deposits in a category are still under $100,000, then new eligible deposits made at National Bank will be added and insured up to $100,000.
Examples of CDIC coverage
Explore several examples of how the joining of the two banks would affect CDIC coverage for our clients.
How coverage changes after a merger?
In this case, there are two CDIC member institutions coming together:
- National Bank of Canada (NBC), and
- Canadian Western Bank (CWB).
Insured deposits at each institution continue to be separately insured up to $100,000 per depositor per category, as if the institutions had remained separate legal entities for a period of 2 years after the merger, less any withdrawals made from those separate deposits, and as term deposits mature or are redeemed.
For ease of reference in the following examples:
- the pre-merger CWB savings account will be referred to as the NBC savings account (formerly CWB savings account) after the merger
- the pre-merger CWB GIC will be referred to as the NBC GIC (formerly CWB GIC) after the merger
| Before the merger: | After the merger: |
|---|---|
| $100,000 in NBC GIC maturing in 5 years | $100,000 in NBC GIC maturing in 5 years |
| $80,000 in CWB savings account | $80,000 in NBC savings account (formerly CWB savings account) |
| $20,000 in CWB GIC maturing in 1 year | $20,000 in NBC GIC (formerly CWB GIC) maturing in 1 year |
| CDIC Coverage: $200,000 | CDIC Coverage: $200,000 |
Before and after the merger, you have $200,000 in coverage ($100,000 per institution). The coverage continues as if NBC and CWB had not merged for a period of two years from the date of the merger, except any withdrawals from those deposits and for term deposits where coverage extends until maturity.
How does the coverage change in case of withdrawals, term deposit maturities and renewals, or new deposits?
Withdrawals, term deposit renewals/redemptions and new deposits made after the merger affect coverage. Let’s look at a few cases below.
Example 2: Soon after the merger, you make a $40,000 withdrawal from your NBC savings account (formerly CWB savings account).
Here’s what does and does not qualify for CDIC coverage:
| Before the $40,000 withdrawal: | After the $40,000 withdrawal: |
|---|---|
| $100,000 in NBC GIC maturing in 5 years | $100,000 in NBC GIC maturing in 5 years |
| $80,000 in NBC savings account (formerly CWB savings account) | $40,000 in NBC savings account (formerly CWB savings account) |
| $20,000 in NBC GIC (formerly CWB GIC) maturing in 1 year | $20,000 in NBC GIC (formerly CWB GIC) maturing in 1 year |
| CDIC Coverage: $200,000 |
CDIC Coverage: $160,000 |
Since you withdrew $40,000 from the NBC savings account (formerly the CWB savings account), you now have $160,000 in coverage.
Example 3: One year after the merger, one of your GICs mature.
Here’s what does and does not qualify for CDIC coverage:
| Before the 1-year GIC matures: | After the 1-year GIC matures: |
|---|---|
| $100,000 in NBC GIC maturing in 5 years | $100,000 in NBC GIC maturing in 5 years |
| $40,000 in NBC savings account (formerly CWB savings account) | $40,000 in NBC savings account (formerly CWB savings account) |
| $20,000 in NBC GIC (formerly CWB GIC) maturing in 1 year | Maturity amount of $20,000 NBC GIC (formerly CWB GIC) |
| CDIC Coverage: $160,000 |
CDIC Coverage: $140,000 |
Now that your one-year NBC GIC (formerly CWB GIC) has matured, you have $140,000 in coverage since CDIC coverage stops as term deposits mature.
Example 4: 15 months after the merger, you make a new deposit of $70,0000 in your NBC savings account (formerly CWB savings account).
Here’s what does and does not qualify for CDIC coverage:
| Before the deposit of $70,000 in the savings account: | After the deposit of $70,000 in the savings account: |
|---|---|
| $100,000 in NBC GIC maturing in 5 years | $100,000 in NBC GIC maturing in 5 years |
| $40,000 in NBC savings account (formerly CWB savings account) | $40,000 in NBC savings account (formerly CWB savings account) |
| New deposit of $70,000 after the merger | |
| CDIC Coverage: $140,000 |
CDIC Coverage: $140,000 |
Your new $70,000 deposit in the NBC savings account (formerly CWB savings account) is not covered as it was made after the merger. Only the existing $40,000 in the NBC savings account (formerly CWB savings account) is covered.
Example 5: 18 months after the merger, you withdraw $15,000 from your savings account.
Here’s what does and does not qualify for CDIC coverage:
| Before the $15,000 withdrawal from the savings account: | After the $15,000 withdrawal from the savings account: |
|---|---|
| $100,000 in NBC GIC maturing in 5 years | $100,000 in NBC GIC maturing in 5 years |
| $40,000 in NBC savings account (formerly CWB savings account) | $25,000 in NBC savings account (formerly CWB savings account) |
| $70,000 new deposit after the merger | $70,000 new deposit after the merger |
| CDIC Coverage: $140,000 |
CDIC Coverage: $125,000 |
The new post-merger $15,000 withdrawal decreases the coverage, and only $25,000 in the NBC savings account (formerly CWB savings account) is now covered.
Example 6: Two years after the merger, CDIC 2-year post-merger coverage stops.
Here’s what does and does not qualify for CDIC coverage:
| Before the post-merger coverage stops: | After the post-merger coverage stops: |
|---|---|
| $100,000 in NBC GIC maturing in 5 years | $100,000 in NBC GIC maturing in 5 years |
| $25,000 in NBC savings account (formerly CWB savings account) | $25,000 in NBC savings account (formerly CWB savings account) |
| $70,000 new deposit after the merger | $70,000 new deposit after the merger |
| CDIC Coverage: $125,000 |
CDIC Coverage: $100,000 |
Since grandfathering is no longer relevant is this scenario, the coverage now only extends to one deposit insurance limit of $100 000 as per the category ''Deposits held in one name''. With your 5-year NBC $100 000 GIC, you already have the maximum coverage possible ($100,000).
Example 7: About 2 years and 4 months after the merger, you inherit $150,000 from your grand-father and wish to invest the whole amount in GICs. While you may have already reached the maximum CDIC coverage for NBC, there may be other options to maximize your coverage. We recommend speaking to a financial advisor or your relationship manager.
How is the coverage impacted two years after the merger?
Two years after the merger, the CDIC coverage ceases, as if NBC and CWB had not merged.
Do you have questions about CDIC coverage?
