In Québec, the Deposit Institutions and Deposit Protection Act ensures that you won’t lose your money if your financial institution ever goes bankrupt.
What is it?
Your deposits are protected up to a maximum of $100,000 per category of deposit, per authorized deposit institution, including principal and accrued interest.
Deposits that are protected
Deposits of money, the most common of which are:
- deposits held in chequing accounts and savings accounts
- term deposits and Guaranteed Investment Certificates (GICs)A guaranteed investment certificate (GIC), also called a certificate of deposit or term deposit, is a security indicating that an investor has lent money to a financial institution. GICs earn interest.
- drafts and certified cheques
For your deposits to be protected, they must meet certain conditions. They must:
- be made and payable in Québec
- be in Canadian dollars
Deposits that are not protected
Because they do not meet the conditions for a deposit of money, some savings products are excluded from deposit protection. For example:
- sharesA share, also referred to as stock, is an equity security that entitles you to an ownership interest in a company.
The company can distribute a portion of its earnings to shareholders by paying them a dividend.
The shares of companies listed on an exchange are bought and sold at the exchange.
When a company ceases to operate, the proceeds from the sale of its assets are used to pay its debts and taxes, and the rest of the money is distributed to shareholders., mutual fundsA mutual fund is made up of money that is pooled by several investors and used on their behalf by a manager to buy shares, bonds or other securities in line with the fund’s objectives. , bondsA bond is a security issued by governments and companies through which an investor lends money to the issuer.
In general, the government or company promises to pay the investor interest at a fixed rate and at certain intervals (for example, 2% per year). Interest is normally paid twice a year. At maturity, the government or company pays back a predetermined amount that is called the face value. The face value is usually $1,000.
There are several types of bonds:
Stripped bondReal return bondConvertible bondSavings bondRetractable bondUnsecured bondEtc. , debenturesA debenture is a fixed-income investment, similar to bonds, except that debentures are generally not backed by specific assets. Also called unsecured bond., mortgage-backed securitiesA mortgage-backed security is a type of security tied to a mortgage.
A mortgage loan (a loan secured by a mortgage) is a mortgage-backed security. and units/shares or other equity securities
- Treasury billsA treasury bill is a short-term investment guaranteed by a government. It reaches maturity within a year at most. At maturity, the government pays out a greater amount than the amount invested.Un bon du Trésor est un placement à court terme garanti par un gouvernement. L'échéance est d'au maximum un an. À l'échéance, le gouvernement rembourse une somme plus élevée que la somme investie.
- life insurance contracts and segregated fundsA segregated fund is a fund issued by insurers. It is similar to a mutual fund, but has additional guarantees. For example, capital may be reimbursed in the event of death, even if your investments have declined in value.
Some products may be eligible for other protection programs, such as the Canadian Investor Protection Fund (CIPF) This link will open in a new window, Assuris This link will open in a new window and the financial services compensation fund.
Your money is safe
Many financial institutions, including financial services cooperatives, are authorized by the AMF to solicit and receive your deposits in Québec. Check the Register – Insurers, deposit institutions and trust companies to find out if your institution is authorized to solicit or receive deposits in Québec.
A financial institution whose deposits are protected by the AMF displays the official logo.
Your financial institution must tell you about the features of the deposit protection provided by the AMF before opening a deposit account or giving you a document evidencing receipt of your deposit of money. For example, your financial institution could give you a copy of the brochure “Your deposits are protected. That’s a guarantee!”.
For greater clarity, if your deposit institution is eligible for the deposit protection provided by the AMF, the documents it provides evidencing receipt of your funds must contain the following statement: “This is a deposit of money within the meaning of the Deposit Institutions and Deposit Protection Act”.
YOUR MONEY IS SAFE
Your deposits with deposit institutions displaying this sticker inside or at the entrance to their premises are protected by the AMF.
How are deposits repaid?
If an institution goes bankrupt, the AMF will repay the protected deposits. Most deposits will be repaid within 7 business days following the bankruptcy.
The repayment of protected deposits is automated, with the AMF issuing a cheque using data received from the institution. With certain exceptions, depositors do not need to contact the AMF or provide supporting documents in order for their protected deposits to be repaid.
The repayment of transaction account deposits will be given priority, so that you receive the funds you need for your daily activities as quickly as possible.
The maximum amount is set at $100,00 per category of deposits made per person, per authorized deposit institution, and includes the principal and accrued interest.
For example, if you hold a $95,000 investment with a single institution and it earns $7,000 in interest for a total of $102,000, the protection provided by the AMF will be $100,000.
Another example: If you make three eligible $50,000 deposits with three different authorized deposit institutions, each deposit, or a total of $150,000, will be protected.
Amalgamation of several authorized institutions
If authorized deposit institutions amalgamate (for example, Desjardins caisses), your deposits that were protected with the former institutions will continue to be protected with the new institution as if no amalgamation had taken place.
For example, if you hold an $80,000 deposit with institution A and a $40,000 deposit with institution B and the two institutions amalgamate, the amount protected will be $120,000 until the deposits reach maturity or are withdrawn.
Deposits made with the new institution following the amalgamation will be protected to the extent that your combined pre-amalgamation and post-amalgamation deposits do not exceed $100,000. For example, if you hold $120,000 in pre-amalgamation deposits and you make a new $10,000 deposit, the new deposit will not be protected, since the $100,000 limit will have already been reached.
Individuals (including minors)
The protection applies to all deposits belonging to an individual that are held with the same institution. For example, the protection applies to accounts that are held by:
- you personally
- you and a sole proprietorship owned by you. A firm’s registration in the Registre des entreprises (REQ) This link will open in a new window contains information about its legal form A sole proprietorship does not create a legal person separate from its owner. The deposits of the sole proprietorship and those of its owner, even if they are made to separate accounts, are combined when calculating the maximum deposit protection amount
- you personally and all the accounts for which you are the account owner. For example, if you’re the signatory on the transaction account (account owner) of an association, the association’s deposits and your deposits, even if they are made to separate accounts, are combined when calculating the maximum deposit protection.
A legal person is constituted under a law and has a legal personality separate from that of its owner or owners. An entreprise’s registration in the Registre des entreprises (REQ) This link will open in a new window contains information about its legal form.Examples of legal persons include companies constituted under a Québec law, including the Business Corporations Act, or cooperatives constituted under the Act respecting financial services cooperatives. There are also other forms of legal persons, such as non-profit organizations.
Groups of persons
The deposit protection limit applies to all jointly owned deposits with the same authorized deposit institution. The institution’s records must indicate that the deposit is owned by more than one person. For example:
- you and your spouse own a joint account
- you and your fellow partners own a joint account for your firm. A firm’s registration in the Registre des entreprises (REQ) This link will open in a new window contains information about its legal formGroups of persons include general partnerships, limited partnerships and joint ventures (undeclared partnerships). A partnership is not a legal person separate from its members (owners). It is established by individuals who agree to operate a business and share in its profits.
Protection that is calculated by category of deposits
Your deposits of money made with an authorized deposit institution are protected up to a maximum of $100,000 in each of the following categories:
- your combined total deposits in non-registered accounts (chequing or transaction account, savings account, term deposit or GIC)
- your combined total deposits in one or more Registered Retirement Savings Plans (RRSPs), including deposits in a Locked-In Retirement AccountA Locked-In Retirement Account (LIRA) is generally used for investing money coming from a Supplemental Pension Plan (SPP). The income generated by the investments in a LIRA is not taxable as long as it remains in the LIRA. To move money out of a LIRA, it must either be transferred to a Life Income Fund (LIF) or used to buy a life annuity from an insurance company. (LIRA)
- your combined total deposits in one or more Tax-Free Savings Accounts (TFSAs)
- your combined total deposits in one or more Registered Retirement Income FundsA Registered Retirement Income Fund is a plan that allows participants to defer taxes on investment income. The funds held in a RRIF are usually transferred from an RRSP.
Unlike with an RRSP, participants in a RRIF must withdraw a minimum amount each year (as with a LIRA).
Amounts withdrawn are taxable, as with an RRSP. (RRIFs), including deposits in a Life Income FundA Life Income Fund (LIF) is a fund whose purpose is to provide income for the rest of a participant’s lifetime.
The holder of this type of fund is required to withdraw a minimum amount of money every year, without exceeding the limit.
Funds invested in a LIF are often derived from an employer’s pension plan (Supplemental Pension Plan).
As with an RRSP:
Investment income earned in a LIF is not taxable as long as it remains in the fund.Amounts withdrawn are taxable. (LIF)
- the combined total deposits that are jointly held by you (joint deposits)
- the deposits you make as a trusteeIn the context of a trust, the trustee is the person who undertakes to hold and administer the assets in the trust on behalf of one or more other individuals or companies. or as an administrator of the property of othersAn administrator of the property of others is a person who manages property on behalf of another person. For example, an investor instructs his or her lawyer to perform a transaction on his or her behalf. where the existence of the trust or form of administration is noted in the records of the institution.
In this case, in addition to the protection for the other deposits that they might hold with the institution, each beneficiary of a trust or each person whose property is administered is entitled to deposit protection up to a maximum of $100,000.
The mere fact that a depositor entrusts management of a deposit to someone else—under a power of attorney or a mandate in anticipation of incapacity (protection mandate), for example—does not result in an additional $100,000 in protection for that depositor. For the depositor to benefit from separate protection, the funds must be managed in connection with a business activity or a liquidation.
- The amounts deposited and set aside for the payment of property taxes (including school and municipal taxes) when received by an authorized deposit institution for a mortgaged property.
Documentation and tools
- Your deposits are protected. That's a guarantee! (pdf - 790 KB)This link will open in a new windowUpdated on 12 August 2019
- Deposit Insurance in Québec 1967 to 2017 (pdf - 3 MB)This link will open in a new windowUpdated on 12 October 2017
- Choosing Investments! (pdf - 1 MB)This link will open in a new windowUpdated on 6 October 2016