What happens to my money if a bank fails in Canada?
CDIC either arranges a transfer of deposits to a healthy institution or pays depositors directly, and you don’t file a claim. Insured non-registered deposits are paid by cheque mailed in the days after closure; registered deposits move to another institution. Amounts above $100,000 per category and investments are not insured. The last CDIC member failure was in 1996.
Who steps in
- OSFI supervises and intervenes early
As the prudential regulator, OSFI monitors capital and risk and can require action long before a failure. - CDIC resolves the failing member
CDIC is the resolution authority for its members. It can arrange a transfer of deposits to a healthy institution or pay depositors directly. - Insured depositors are made whole
Eligible deposits up to the limits are protected. You don’t file a claim.
What you would receive, and when
| Money | What happens |
|---|---|
| Insured non-registered deposits | CDIC says cheques start to be mailed in the days following the member’s closure. It doesn’t publish a fixed number of days. |
| Insured registered deposits (RRSP, TFSA, FHSA, etc.) | Take longer: they must be moved to another institution that offers the same registered plan, to protect the tax status. |
| Deposits above the limit | Not insured; recovery depends on what is left in the failed institution. |
| Investments (stocks, ETFs, mutual funds, crypto-assets) | Never CDIC-insured. Other protections, such as investor protection funds for investment dealers, may apply depending on where they are held. |
Credit unions and ATB
A provincial credit union would be handled by its province’s regulator and deposit insurer, under that province’s limits — unlimited in British Columbia, Alberta, Saskatchewan and Manitoba; $250,000 for non-registered deposits in Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador; $100,000 per category in Quebec. ATB Financial deposits are guaranteed by the Government of Alberta. See deposit insurance by province.
How often do Canadian banks fail?
Rarely. CDIC lists 43 member failures, from 1970 to 1996. The most recent was Security Home Mortgage Corporation in 1996. CDIC says the failures it has handled affected more than two million depositors, and no one lost any insured deposits.
Would a big bank be handled differently?
Yes. OSFI designates six domestic systemically important banks (D-SIBs): Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada and Toronto-Dominion Bank. For these banks only, CDIC has a bail-in power: certain preferred shares and unsecured debt the bank issued can be converted into common shares to recapitalize it.
CDIC states that customers’ deposits are not bailed in, and that chequing accounts, savings accounts and GICs would not be affected. Bail-in also doesn’t reduce CDIC deposit protection.
Who pays for deposit insurance?
Member institutions do. CDIC’s funding framework is a deposit protection fund plus premiums paid by member institutions, set through its Differential Premiums System. You pay nothing, and coverage is automatic.
Worked example: what one depositor would get back
An illustration with round numbers. Sam has the following at a CDIC member that fails:
| What Sam had | Amount | Insured | How it reaches him |
|---|---|---|---|
| Chequing and savings in his name | $130,000 | $100,000 | Cheque by mail |
| Joint savings with his partner | $40,000 | $40,000 | Cheque by mail |
| TFSA GIC | $50,000 | $50,000 | Transferred to a new institution he picks |
| Mutual funds bought at the branch | $20,000 | $0 from CDIC | Not a deposit; other protection regimes may apply |
Sam’s insured deposits total $190,000. The $30,000 above his single-name limit is uninsured, and any recovery depends on what is left in the failed institution. Interest counts toward the limit and is calculated up to the date the bank closes.
What happens to my bills, pay and loans?
- Automatic payments stop. CDIC says automatic payments from the failed member’s accounts will not be processed. It recommends opening an account at another institution, redirecting your income there and contacting your creditors.
- Your loans don’t disappear. For money you owe the failed institution, such as a mortgage or loan, you make arrangements with the court-appointed liquidator. New credit has to come from another lender.
- Cheques come by regular mail. CDIC pays single-name and joint deposits by cheque through Canada Post, can’t give a tracking number, and can’t move non-registered deposits electronically to another bank.
- Registered plans move rather than pay out. You choose a new institution offering the same plan type, and it starts the transfer with the liquidator. CDIC works with the Canada Revenue Agency so the tax status is protected, and contacts these depositors directly.
Watch for scams
CDIC says it does not ask for financial, personal or confidential information by telephone, email or fax. Fraudsters sometimes pose as CDIC staff, and some non-members have falsely claimed to be members. CDIC does not protect against losses from fraud, scams or theft; report those to the Canadian Anti-Fraud Centre.
Common mistakes
- Thinking you must file a claim. CDIC’s process is automatic.
- Keeping your only account at one institution. A second account elsewhere means pay and bills can keep moving while CDIC mails cheques.
- Assuming products sold in a bank branch are deposits. Mutual funds, stocks, bonds and ETFs are not CDIC insured.
- Leaving an old mailing address on file. Cheques go by regular mail.
What to keep on hand, just in case
- A recent statement for each account and GIC, so you can check the amounts CDIC pays.
- A note of which accounts are single-name, joint, in trust or registered.
- The legal name of each institution, not just the brand you see in the app.
- Your employer’s payroll contact and a list of billers, so you can redirect payments quickly.
How to be ready
- Keep each category at each member under the limit, or accept the risk knowingly. The deposit insurance calculator shows where you stand.
- Make sure joint and trust accounts list every owner and beneficiary on the institution’s records — coverage depends on it.
- Know which brands share a member, using the CDIC member list.
- Keep your contact details current so a payment can reach you.
Insurance protects deposits, not investments. A TFSA full of ETFs at a bank is still an investment account.
A worked example
Worked example — a household with four deposits at two CDIC members
| Deposit | Amount | Protected | Not protected |
|---|---|---|---|
| Member A: Own name | $130,000 | $100,000 | $30,000 |
| Member A: TFSA | $45,000 | $45,000 | $0 |
| Member A: Joint (You + partner) | $80,000 | $80,000 | $0 |
| Member B: Own name | $60,000 | $60,000 | $0 |
Total $315,000; protected $285,000; not protected $30,000. Try your own deposits in the deposit safety tool.
What this means for you
Failures are rare — the most recent CDIC member failure was in 1996 — so the aim is simple preparation, not alarm. A few habits would turn a failure into an inconvenience rather than a crisis.
- Keep each category under the limit
Insured deposits are paid without a claim. Money above $100,000 per category at one member is not insured, and recovery depends on what is left. Check where you stand in the deposit insurance calculator. - Keep a second account elsewhere
Automatic payments from a failed member stop, and insured deposits arrive by cheque. An account at another institution lets your pay and bills keep moving in the meantime. - Keep your address current
CDIC pays by cheque through regular mail and can’t give a tracking number, so an old address on file slows everything down. - Keep simple records
A recent statement for each account and GIC, a note of which are single-name, joint, in trust or registered, and the legal name of each institution.
Expect registered plans such as a TFSA or RRSP to take longer: you choose a new institution offering the same plan, and it arranges the transfer. Loans and mortgages don’t disappear; you make arrangements with the court-appointed liquidator. And be wary of anyone claiming to be from CDIC who asks for your banking details by phone or email — CDIC says it doesn’t do that.
Frequently asked questions
Has a Canadian bank failed recently?
Failures are rare. This guide explains the legal process rather than predicting any event.
Do I need to apply to CDIC if my bank fails?
No. CDIC says no claim needs to be filed for insured deposits.
What if I have more than $100,000 at one bank?
Only up to $100,000 per category is insured. Amounts above that are uninsured and depend on what can be recovered.
Can my deposits at a Big Six bank be bailed in?
No. CDIC says bail-in applies only to certain preferred shares and unsecured debt of D-SIBs, and that chequing, savings accounts and GICs would not be affected.
Is my mortgage cancelled if my bank fails?
No. CDIC says you make arrangements with the court-appointed liquidator for money you owe the failed institution.
Will CDIC pay me electronically?
Not for regular deposits. CDIC says single-name and joint deposits are paid by cheque sent by regular mail, and registered deposits are transferred to a new institution you choose.
When did a CDIC member last fail?
1996. CDIC lists 43 member failures, the last being Security Home Mortgage Corporation.
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