If a financial institution becomes insolventAn individual or company is insolvent if they are unable to pay their debts., some of the deposits it holds may be covered by AMF deposit insurance. This deposit insurance offers a maximum guarantee of $100,000 per person, per registered institution. 

Guaranteed deposits

What types of deposits are guaranteed?

Most types of deposits are guaranteed if they meet the required conditions. This includes:

  • Deposits in a chequing or savings account;
  • Term deposits such as certificates of deposit and guaranteed investment certificates (GICs);
  • Drafts, certified cheques and travellers’ cheques.

What are the conditions?

To be covered by the guarantee:

  • Deposits must be made and payable in Québec in Canadian currency.
  • Deposits with terms to maturity of over 5 years must be repayable, at the depositor’s request, after 5 years from the date of the deposit.
  • The financial institution must be registered with the AMF.

Some types of deposits are not guaranteed. For more information, consult the list of non-guaranteed deposits.

If the deposit is guaranteed, what amount is repaid?

The amount of the deposit and interest are repaid. The maximum guarantee is $100,000 per person, per institution. In the event of financial institutions’ simultaneous bankruptcy, a person who has guaranteed deposits in several institutions could receive a total repayment of over $100,000.

How do I know if my deposit is guaranteed?

When you make a deposit, your financial institution must tell you if it is guaranteed. The following statement must be included on the deposit document: “This is a deposit within the meaning of the Deposit Insurance Act.”

Remember to consider your $100,000 per-institution limit.

In addition, an institution must be registered with the AMF under the Deposit Insurance Act in order to solicit or receive deposits and must display the following official logo in a conspicuous place.

Guaranteed deposits when institutions amalgamate

How is deposit insurance affected when two financial institutions amalgamate?

In this case, specific rules apply:

  • When institutions registered with the AMF amalgamate;
  • If a registered institution or a bank buys the assetsThe assets of a person or a company are everything that belongs to them. These assets may be tangible (such as a computer or a building) or intangible (such as patents, trademarks or copyrights).

    Assets are the opposite of liabilities, which represent the debts of the person or company. 
    and assumes the liabilitiesA person’s or company’s liability is all of their debts.

    Current liabilities refers to a debt that must be paid back in a relatively short period of time (for example, an amount charged to a credit card), whereas non-current liabilities refers to a debt that is repaid over a longer period (such as a mortgage loan on a property).

    Liabilities are the opposite of assets which consist of tangible property (such as a building) and intangible property (such as copyrights). 
    of another registered institution or bank.

The AMF will continue to separately guarantee eligible deposits made with each of the institutions prior to the amalgamation. Each guarantee is valid until the deposit matures and is covered by its own limit of $100,000, per registered institution.

New deposits made in the amalgamated financial institution are guaranteed according to the same rules as with other deposits.

Example

Diane has a guaranteed deposit of $60,000 with registered institution A (matures on June 1, 2019) and a guaranteed deposit of $70,000 with registered institution B (matures on July 1, 2019). The two institutions amalgamate their operations on October 1, 2016.

  1. Diane’s deposits continue to be guaranteed by the AMF until maturity.
  2. After the amalgamation, Diane makes a new deposit of $20,000 in the amalgamated institution (institution AB).
    • Diane already has guaranteed deposits totalling over $100,000 in institution AB. This $20,000 deposit cannot be guaranteed by the AMF.
  3. When her $60,000 deposit matures, Diane renews it with amalgamated institution AB.
    • Diane still holds a guaranteed deposit of $70,000 with institution AB. Since the maximum amount is $100,000, only $30,000 will be guaranteed by the AMF (maximum of $100,000, less the $70,000 already guaranteed)

Separate deposit guarantees

Certain deposits are covered by separate guarantees:

For more information, see the section on separate guarantees.

Joint deposits

 A person can make a deposit in his or her own name and another deposit jointly with one or more other individuals.

  • Both deposits are protected by separate guarantees.
  • The guarantee limit of $100,000 applies to all deposits held jointly by the same persons at any registered institution.
  • Important condition: The institution’s records must specify that the deposit belongs to several individuals.

Example
Naomi made the following deposits in her name:

 

DEPOSIT AMOUNT
(including accrued interest)

AMOUNT
GUARANTEED

Chequing accounts

$3,000

$3,000

Savings accounts

$10,000

$10,000

Four-year term deposit

$95,000

$95,000

Total

$108,000

$100,000*

* coverage limit is $100,000.

Jean, Naomi’s husband, made the following deposits in his name:

 

DEPOSIT AMOUNT
(including accrued interest)

AMOUNT
GUARANTEED

Chequing accounts

$1,000

$1,000

Savings accounts

$10,000

$10,000

Four-year term deposit

$15,000

$15,000

Total

$26,000

$26,000

Naomi and Jean made the following deposits together:

 

DEPOSIT AMOUNT
(including accrued interest)

AMOUNT
GUARANTEED

Chequing accounts

$1,000

$1,000

Savings accounts

$10,000

$10,000

Six-year term deposit,
redeemable five years after the deposit date

$110,000

$110,000

Total

$121,000

$100,000*

* coverage limit is $100,000.

 In this example, Naomi is entitled to the guarantee of $100,000 twice:  

  • For the deposits made individually;

  • For the deposits made jointly, because they are covered by a separate guarantee. 

All of the deposits in this example satisfy the conditions (payable in Québec and in Canadian dollars, at an institution registered with the AMF).

Trust deposits

All deposits made by a trustee In 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 mandatary A mandatary is the person who carries out a mandate. For example, if an investor gives a lawyer a mandate to carry out a transaction on their behalf, then the lawyer is the mandatary and the investor is the mandator.for another person benefit from:

  • A guarantee that is separate from that for other deposits held. It will be in the name of the trustee or mandatary.
  • A guarantee that is separate from that for other deposits made by the beneficiary.
  • Important condition: The institution’s records must specify that there is a trust or mandate.

A trust depositA trust deposit is a deposit made to a bank account managed by a person (the trustee or account holder) on behalf of another person (a beneficiary).  can also have several beneficiaries. The trust or mandate and the breakdown of the deposit must be indicated in the registered institution’s records. Each beneficiary is then entitled to deposit insurance of a maximum amount of $100,000.

Example
Marie made the following deposits in her name:

 

DEPOSIT AMOUNT
(including accrued interest)

AMOUNT
GUARANTEED

Chequing accounts

$3,000

$3,000

Savings accounts

$10,000

$10,000

One-year term deposit

$65,000

$65,000

Total

$78,000

$78,000

Marie's daughter Laurence made the following deposits in her own name, payable in Québec in Canadian dollars, with the same institution registered with the AMF:

 

AMOUNT OF DEPOSITS
(including accrued interest)

AMOUNT
GUARANTEED

Savings accounts

$10,000

$10,000

Two-year term deposit

$15,000

$15,000

Total

$25,000

$25,000

Marie is the trustee for the following deposits (the beneficiary is clearly identified as being her daughter Laurence):

 

DEPOSIT AMOUNT
(including accrued interest)

AMOUNT
GUARANTEED

Five-year term deposit

$40,000

$40,000

In this example, Marie is entitled to the maximum guarantee of $100,000 twice:

  • for the deposits made in her name ($78,000)
  • for the deposits made in trust ($48,000)

All the deposits in this example satisfy the conditions (payable in Québec and in Canadian dollars, at an institution registered with the AMF).

Deposits in a Registered Retirement Savings Plan (RRSP)

The total of all guaranteed deposits held under one or more RRSPsAn RRSP, or Registered Retirement Savings Plan, is a registered account (an account with a bank or on-line broker, for example) in which investments can be made, the returns on which are not taxable as long as the money stays in the RRSP.

Investors who make contributions to their RRSP can deduct an equivalent amount from their taxable income (subject to certain conditions) and, as a rule, pay less tax.

However, when amounts are withdrawn from an RRSP, they must be added to taxable income.

The main purpose of an RRSP is to accumulate savings for retirement.  
(including locked-in retirement accountsA 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.) in the same name with a registered institution is guaranteed separately from all other deposits held by this person. The maximum amount covered under deposit insurance is $100,000.

The AMF does not guarantee the following investments held in RRSPs:

  • Foreign currency deposits
  • 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. 
  • 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.
  • 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 bond
    Real return bond
    Convertible bond
    Savings bond
    Retractable bond
    Unsecured bond
    Etc. 
  • 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..

Example
Pierre made the following deposits in his name:

 

DEPOSIT AMOUNT
(including accrued interest)

AMOUNT
GUARANTEED

Chequing accounts

$3,000

$3,000

Savings accounts

$10,000

$10,000

One-year term deposit

$65,000

$65,000

Subtotal

$78,000

$78,000

One-year term deposit
in his RRSP

$25,000

$25,000

Five-year term deposit
in his LIRA

$80,000

$80,000

Subtotal

$105,000

$100,000*

Total

$183,000

$178,000

* coverage limit is $100,000.

In this example, Pierre is entitled to the maximum guarantee of $100,000 twice:

  • for deposits outside an RRSP ($78,000)
  • for deposits in an RRSP ($100,000)

All the deposits in this example satisfy the conditions (payable in Québec and in Canadian dollars, at an institution registered with the AMF).

Deposits in one or more Tax-Free Savings Accounts (TFSA)

The total of all guaranteed deposits held under one or more TFSAA TFSA is a “Tax-Free Savings Account.” It is a savings vehicle (like an RRSP) that allows deposited funds to grow tax-free. This money can be invested in shares, bonds, guaranteed investment certificates or other types of savings or investments.

Making contributions to a TFSA will not entitle you to any tax deductions. However, when you withdraw the money from the TFSA, you will not pay any taxes.

A TFSA lets you save for any reason you choose (buying a home, car, etc.). 
s in the same name, at the same registered institution, is guaranteed separately from all other deposits held by this person, to a maximum of $100,000.

The AMF does not guarantee the following investments held in TFSAs:

  • Foreign currency deposits
  • 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. 
  • 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.
  • 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 bond
    Real return bond
    Convertible bond
    Savings bond
    Retractable bond
    Unsecured bond
    Etc. 
  • 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.

Example
Mehdi made the following deposits in his name:

 

DEPOSIT AMOUNT
(including accrued interest)

AMOUNT
GUARANTEED

Chequing accounts

$3,000

$3,000

Savings accounts

$10,000

$10,000

One-year term deposit

$85,000

$85,000

Subtotal

$98,000

$98,000

Term deposit held
in Mehdi's TFSA

$10,000

$10,000

Total

$108,000

$108,000

In this example, Mehdi is entitled to the maximum guarantee of $100,000 twice:

  • for his regular deposits ($98,000)
  • for deposits in a TFSA ($100,000)

Deposits held in a Registered Retirement Income Fund (RRIF)

The total of all guaranteed deposits held under one or more RRIFA 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. 
s is guaranteed separately from all other deposits held by this person. This includes Life Income FundsA 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. 
, which are a particular type of RRIF, in the name of one person, in the same registered institution. The maximum amount covered under deposit insurance is $100,000.

As with RRSPs and TFSAs, the AMF does not guarantee the following investments held in RRIFs:

  • Foreign currency deposits
  • 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. 
  • 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.
  • 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 bond
    Real return bond
    Convertible bond
    Savings bond
    Retractable bond
    Unsecured bond
    Etc. 
  • 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.

Example
Judith made the following deposits in her name:

 

DEPOSIT AMOUNT
(including accrued interest)

AMOUNT
GUARANTEED

Chequing accounts

$3,000

$3,000

Savings accounts

$10,000

$10,000

One-year term deposit

$25,000

$25,000

Subtotal

$38,000

$38,000

Three-year term deposit held in her RRSP

$95,000

$95,000

One-year term deposit held in her RRIF

$105,000

$100,000

Subtotal

$200,000

$195,000

Total

$238,000

$233,000

In this example, Judith is entitled to the maximum guarantee of $100,000 three times:

  • for deposits held in an investment vehicle ($38,000)
  • for deposits held in an RRSP ($95,000)
  • for deposits held in a RRIF ($100,000)