Your guide to BC Credit Union Deposit Insurance
PEACE OF MIND THROUGH SECURITY
PREFACE
The Credit Union Deposit Insurance Corporation (CUDIC), a government corporation, was established in 1958 to protect credit union members against the loss of deposits held by British Columbia credit unions. CUDIC’s responsibility is to administer and operate a deposit insurance fund. The Financial Institutions Commission (FICOM), an agency of the Government of British Columbia, is responsible for administering CUDIC and for administering the regulation of financial institutions operating in the province.
ARE MY DEPOSITS SAFE?
CUDIC guarantees that money on deposit and money invested in non-equity shares will be repaid up to a maximum of $100,000 per ‘separate deposit’ in each credit union. Accrued interest and declared and unpaid dividends are included in this coverage. See paragraph four for what constitutes a separate deposit. All credit unions in the province have deposit insurance coverage with CUDIC.
HOW IS DEPOSIT INSURANCE OBTAINED?
Deposit insurance applies automatically to money on deposit and money invested in non-equity shares with a credit union. It is not necessary to apply for deposit insurance. It is mandatory that all credit unions pay premiums to insure all deposits with them up to the prescribed limits.
WHAT IS GUARANTEED?
CUDIC guarantees that if a credit union fails to pay money on deposit or money invested in non-equity shares, the amount in default will be repaid by CUDIC to a maximum of $100,000 for each separate deposit.
Each of the following is treated as a ‘separate deposit’:
- The aggregate of all deposits that are shown in the records of the credit union as trust accounts and deposited in trust for the benefit of the same beneficiary whether or not the identity of the beneficiaries are disclosed in the records of the credit union.
- The aggregate of all deposits that are shown in the records of the credit union as joint accounts to the credit of the same joint depositors.
- The aggregate of all deposits that are shown in the records of the credit union as registered retirement savings plans under the Income Tax Act (Canada) to the credit of the same depositor.
- The aggregate of all deposits that are shown in the records of the credit union as registered retirement income funds under the Income Tax Act (Canada) to the credit of the same depositor.
- The aggregate of all deposits that are not referred to in paragraphs (a) to (d) above that are credited to the same depositor in the records of the credit union.
WHAT IS THE MAXIMUM DEPOSIT INSURANCE COVERAGE?
The maximum deposit insurance coverage provided by CUDIC is $100,000 per separate deposit, per credit union.
Example:
Two credit union members obtain deposit insurance protection by making insurable deposits at the same credit union as follows:
WHAT IS THE DEPOSIT INSURANCE COVERAGE FOR JOINT ACCOUNTS?
The maximum deposit insurance is $100,000 for the combined total of the deposits held jointly by the same joint deposit holders in the same credit union.
WHAT IS THE DEPOSIT INSURANCE COVERAGE FOR RRSP’S AND RRIF’S?
The maximum deposit coverage for all deposits shown in the records of the credit union as RRSP’s or RRIF’s is $100,000 for each type of plan.
IF I HAVE DEPOSITS IN SEPARATE BRANCHES OF THE SAME CREDIT UNION, IS EACH DEPOSIT INSURED SEPARATELY?
No. The deposit insurance guarantee applies to the combined totals of your deposits in any one credit union. For example, if you have an insurable RRSP account with one branch and another insurable RRSP account with a second branch of the same credit union, the combined total of both RRSP’s would be insured to a maximum of $100,000.
IF I HAVE DEPOSITS IN SEPARATE CREDIT UNIONS, IS EACH DEPOSIT INSURED SEPARATELY?
Yes. The deposit insurance guarantee is on a per separate deposit, per credit union basis.
WHAT IS THE EXTENT OF THE GOVERNMENT’S FINANCIAL BACKING?
In the unlikely event that the deposit insurance fund is unable to meet its obligations, the provincial government is empowered to guarantee any borrowings necessary to meet the fund’s commitments. In this way, the deposit insurance fund functions as the primary protection for members’ deposits.
HOW DOES BC CREDIT UNION DEPOSIT INSURANCE COMPARE TO THE DEPOSIT INSURANCE PROVIDED FOR THE BANKS AND TRUST COMPANIES?
Both are provided by government corporations and have similar rules for determining when deposits are covered separately. For credit unions, deposits are protected to a maximum of $100,000 per separate deposit, compared to $60,000 for banks and trust companies. Also for credit unions, insured deposits are neither restricted to Canadian currency nor to term deposits of five years or less.
WHAT IS NOT COVERED BY THE DEPOSIT INSURANCE GUARANTEE?
Credit union equity shares and investments such as mutual funds or RRSP equity plans are not covered by the deposit insurance guarantee.
HOW ARE DEPOSIT INSURANCE CLAIMS PAID? HOW LONG DO I HAVE TO WAIT TO GET MY MONEY?
Deposit insurance payments are made as soon as possible after CUDIC becomes obligated to make payments to depositors. The exact length of time depends on how quickly the depositor responds to CUDIC’s written request for confirmation of deposits. As soon as confirmation is received, the cheque will be issued.
In the case of registered plans, CUDIC attempts to make arrangements to transfer the insured funds to a successor trustee, which would be another credit union.
The information contained on this web page is presented in summary form for you convenience and should not be relied upon as a complete explanation of deposit insurance coverage. Reference should be made to the Financial Institutions Act and Regulations.
Additional information may be obtained from a V.P. Credit Union manager or by contacting:
Credit Union Deposit Insurance Corporation
c/o Financial Institutions Commission
Suite 1900, 1050 W. Pender Street
Vancouver, BC
V6E 3S7
Tel. 604-660-2947
Fax. 604-660-3170
Rev. December 1991
NO CREDIT UNION MEMBER HAS LOST AN INSURED DEPOSIT IN A BC CREDIT UNION SINCE THE CREDIT UNION DEPOSIT INSURANCE CORPORATION WAS CREATED IN 1958.
