Canadian Money Forum banner

1 - 16 of 16 Posts

·
Registered
Joined
·
792 Posts
Discussion Starter #1
Not sure how I missed this.....

foreign currency deposits are now included. 5 year limits on GICs no longer applies. Travellers cheques excluded.

more changes coming in 2022.


 

·
Registered
Joined
·
118 Posts
That is so interesting... it seems there is no year limit at all, I wonder how that will change the GIC market. I could see GICs up to 10 years, but will we see greater than that? What will people running 5-year GIC ladders do when they can now go up to X years?

Hopefully the 2022 changes will be about increasing the $100k limit. edit: Reading their FAQ, looks like that's not in the cards :confused:
 

·
Registered
Joined
·
774 Posts
Good catch and I missed it as well. Have to give this some thought but I only see one institution offering it (Equitable) with a 2.70% rate. Also it does not appear to be offered by BNS itrade and presumably other brokers. Anyone have any further info?
 

·
Registered
Joined
·
4,550 Posts
Not sure how I missed this.....

foreign currency deposits are now included. 5 year limits on GICs no longer applies. Travellers cheques excluded.

more changes coming in 2022.
...
... such as?

I'm guessing all the deposits-taking financial institutions are raking in record profits to support CDIC with some of these additional coverages such as on "foreign currency deposits" with the presumption not just for US$? I can't see the additional coverages being provided for free. Interesting implementation during interesting times.
 

·
Registered
Joined
·
792 Posts
Discussion Starter #5
... such as?

I'm guessing all the deposits-taking financial institutions are raking in record profits to support CDIC with some of these additional coverages such as on "foreign currency deposits" with the presumption not just for US$? I can't see the additional coverages being provided for free. Interesting implementation during interesting times.

Change to deposit protectionEffective date
Summary of Changes to Deposit Insurance Coverage
Expanded coverage of eligible deposits held in foreign currenciesApril 30, 2020
Extended coverage of eligible deposits with terms greater than 5 yearsApril 30, 2020
Elimination of coverage for travellers’ cheques (travellers’ cheques are no longer issued by CDIC member institutions)April 30, 2020
Separate coverage for up to $100,000 in eligible deposits held under Registered Education Savings Plans (RESPs)April 30, 2022
Separate coverage for up to $100,000 in eligible deposits held under Registered Disability Savings Plans (RDSPs)April 30, 2022
Removal of separate coverage for deposits in mortgage tax accounts (these deposits will be combined with eligible deposits in other categories such as savings in one name)April 30, 2022
New requirements for deposits held in trusts, including nominee brokered deposits that enhance CDIC’s ability to extend protection to these deposits and reimburse them quickly after a CDIC member failure.
 

·
Registered
Joined
·
4,550 Posts
^ Okay, thanks. I didn't look closely enough on the 2022 future years given the date of all those are April 30th.
 

·
Registered
Joined
·
1,706 Posts
I noticed EQBank is offering terms up to 10y (@2.7%). I think the longer terms showed up recently with the CDIC change.

Personally, I feel like above 5y is too long a time horizon, particularly at crummy rates. I went ahead and renewed a tranche of GICs at Oaken for 2.3% which is the best 5y rate I could find. I am not sure how 5y became the magic term, but I suspect it was popular before the advent of CDIC. It'd be interesting if it's documented somewhere how they established the original policies.
 

·
Registered
Joined
·
792 Posts
Discussion Starter #8
I noticed EQBank is offering terms up to 10y (@2.7%). I think the longer terms showed up recently with the CDIC change.

Personally, I feel like above 5y is too long a time horizon, particularly at crummy rates. I went ahead and renewed a tranche of GICs at Oaken for 2.3% which is the best 5y rate I could find. I am not sure how 5y became the magic term, but I suspect it was popular before the advent of CDIC. It'd be interesting if it's documented somewhere how they established the original policies.
 

·
Registered
Joined
·
16,672 Posts
Very interesting changes.

I hold TDB8152 at my brokerage, which is a USD savings account deposit with TD Bank. Do you think the CDIC now covers a USD currency ISA like this one?
 

·
Registered
Joined
·
792 Posts
Discussion Starter #10
Very interesting changes.

I hold TDB8152 at my brokerage, which is a USD savings account deposit with TD Bank. Do you think the CDIC now covers a USD currency ISA like this one?
I would think it would be covered under the same limits and restrictions as 8150 and the other Cdn $ deposit issuers.
 

·
Registered
Joined
·
12,414 Posts
They really ought to increase limit to $250k like FDIC. $100k is not a lot of money anymore, and even decidedly middle-class people might find themselves scurrying to different banks like a squirrel with an acorn to spread their deposits around.
 

·
Registered
Joined
·
792 Posts
Discussion Starter #13
They really ought to increase limit to $250k like FDIC. $100k is not a lot of money anymore, and even decidedly middle-class people might find themselves scurrying to different banks like a squirrel with an acorn to spread their deposits around.
most banks have multiple issuers don’t they? For example, TD8150 can be purchased under 4 separate entities giving you 400k in coverage. and double that if held In RSP and Non-reg. Adding a spouse would also give another set of coverage for each separate entity.
yes, the amount is low by today’s standards, but I’d think you could easily safeguard $1 million Non-reg by using 2 or 3 Institutions.....or perhaps 1 institution if you’re creative with account ownership. Sole accounts for you, sole accounts for your partner, joint accounts.......would allow you to triple the coverage.
 

·
Registered
Joined
·
547 Posts
Very interesting changes.

I hold TDB8152 at my brokerage, which is a USD savings account deposit with TD Bank. Do you think the CDIC now covers a USD currency ISA like this one?
It does, however be mindful that TDB8150 and TDB8152 are the same issuer, so your coverage limit is still $100000 for the combined total of these two.
 
1 - 16 of 16 Posts
Top