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I'm a writer and personal finance expert from Halifax, Nova Scotia. I write about saving, budgeting, and debt.

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How Deposit Insurance Gave Me the Confidence to Bank Online

This post is in partnership with the Canada Deposit Insurance Corporation.

Tell me if this sounds familiar: as a child, your parent brings you to your local bank to open up a savings account. It’s a safe place to put your birthday money, allowance, and yard sale proceeds. The account would swell slowly, the balances updated in your little stamp book, and eventually, you’d empty it out for a big purchase. In my case, I would raid my savings account for riding camp every summer. Five blissful days of riding lessons, barn chores, and s’mores.

I kept that account with that same local bank through middle school and high school. In university, I opened a chequing account to go with the savings account, again heading into my local bank branch to do my banking business.

It wasn’t until I graduated from university and started paying attention to things like banking fees that I considered switching to an online bank. At the time, the concept of banking purely online, with no brick and mortar option, was a little unnerving. So was the idea of using a bank that wasn’t one of the household names. How would I know my money was safe?

In situations like these, I often turn to the internet for reassurance, and I found comfort when I stumbled upon the Canada Deposit Insurance Corporation (CDIC) website. CDIC is a federal Crown corporation created by Parliament to help protect the financial stability in Canada by offering deposit insurance. If your bank or financial institution is a CDIC member, your deposits are protected up to $100,000 per insured category (there are seven categories).

As a new graduate up to her eyeballs in debt, that seemed like more than enough to cover my deposits (and still is), and a quick check of their member list made me feel instantly better about stashing my cash with an online bank. If the worst were to happen, my money would be insured.

Remember those seven categories I mentioned? Each category receives separate coverage, meaning that eligible deposits in TFSAs are protected separately from those in RRSPs, or from those in joint or personal accounts. So the $100,000 per category threshold is more than enough for most Canadians, which is why I never hesitate to recommend to friends and family that they switch to an online bank to save on fees if they know they are CDIC members. I can’t count the number of times I’ve told people that I use a purely online bank and, when naming the bank, have had people dismiss the idea, thinking the institute is untrustworthy – simply because it’s not one of the Big Five.

I’ve heard things like:

  • “What if the bank goes under? Where does your money go?”
  • “Aren’t you afraid your money will just disappear into cyberspace?”
  • “I’d rather stick with (insert popular brick and mortar bank here), sure they charge fees, but I trust them.”

It’s at this point in the conversation that I bring up the fact that there is a handy little organization called CDIC and that, thanks to them, we don’t have to worry about banks going under or money disappearing into cyberspace – do people even say cyberspace anymore?

I start by explaining what that membership entails and how the coverage works, and then I encourage friends and family to consult the member list because they’ll find reputable organizations – including the ones I recommend – on it. I also suggest that people check out the list of products CDIC does NOT cover (because not everything is protected) so that they have ample information to make their decision.

It’s been years since I made the switch to my first online bank, and since then I’ve opened up accounts at two other online banks. For both, the first thing I did was look them up on the CDIC membership list. To me, belonging to the CDIC adds a key layer of security that I need to feel comfortable working with them. After that, I do all of the standard research about fees and interest rates, but that CDIC membership is my very first, and more important litmus test.

Did you know about CDIC protection before today? Does it make you feel better about online banking? I want to know!


  1. I’ve never really spent any time thinking about it, but now I want to learn more… I know that all my money is in banks that are members, and I know that my total isn’t nearly close enough to the maximum to worry, but they have a fun calculator tool on their website to see what your coverage is… I might spend some time going through that just for fun!

    And I totally bank with an online bank… But I never really had any concerns about it.

    • Jordann says:

      That’s good! Now that I’ve been doing it for years I don’t give it a second thought and I’m always surprised when people express distrust because I’ve been doing it so long without issue. When I first switched over though, I admit I was a little concerned about things like customer service and getting bank drafts. All matters turned out to be much easier than I thought though.

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