Friday, March 20, 2015

Deposit Insurance Coverage for Ontario Credit Unions

Anna Procio
Estate and Administration Officer
People often ask who protects their deposits at a credit union. In Ontario the answer is The Deposit Insurance Corporation of Ontario (DICO). This agency of the Province of Ontario was establish via provincial legislation in 1977 and provides deposit protection for all eligible deposits held at Ontario credit unions.

DICO is responsible for ensuring that all the credit unions it insures operate in accordance with sound business and financial practices – this includes regular audits of credit unions by DICO auditors. All credit unions in Ontario are required to display the official sign of DICO which confirms that deposits are insured.

To be eligible for deposit insurance protection, you must be a member of a credit union.
Eligible deposits held at different credit unions are separately insured. Eligible deposits held at different branches of the same credit union are combined for the purposes of determining the maximum insurance coverage.

DICO insures Canadian currency deposits payable in Canada including:
-       savings and chequing accounts;
-       term deposits including index-linked term deposits;
-       guaranteed investment certificates;
-       deposits in registered saving plans.

DICO does NOT insure:
-       mutual funds;
-       membership shares;
-       patronage, investment or preferred shares issued by a credit union;
-       foreign currency deposit accounts;
-       contents of safety deposit boxes;
-       securities held for safe keeping

The maximum basic protection for eligible deposits is $100,000 (principal and interest combined) per member in each credit union. DICO provides separate coverage up to a maximum of $100,000 for each of the following types of eligible deposits:

  • Deposits held jointly in the name of two or more persons – Deposits you own with someone else are insured separately from deposits in your own name, provided the records of the credit union identify the name and address of each joint owner.

  • Deposits held in trust for one or more beneficiaries – Deposits held in trust accounts are insured separately from deposits owned by the trustee or the beneficiary. If a trust deposit has more than one beneficiary, the portion owned by each beneficiary must be identified on the credit union’s records. The credit union’s records must identify the name and address of each trustee and each beneficiary. Each beneficiary’s portion is insured up to $100,000.

  • Deposits held in registered plans such as RRSPs, RRIFs, RESPs, TFSA (all deposits in registered savings plans are fully insured) – Deposits held in registered savings plans (RRSP, RRIF, RESP, TFSA) are separately insured from the deposits held in other accounts. All deposits made to register savings plans are fully insured with no limit on the maximum amount.

  • Deposits held in the name of corporation, partnership or association


Who pays for Deposit Insurance?

Each credit union is assessed a premium for the deposits it holds. This premium is paid to DICO.

What happens if a Credit Union amalgamates with another credit union?

If your savings at both credit unions total less than $100,000 then you are not affected. If the amalgamation results in your total insurable deposits with the new credit union exceeding the $100,000 maximum, special rules apply:
·      term deposits remain insured until maturity;
·      demand deposits remain insured until withdrawn;
·      all deposits in registered savings plans remain fully insured until withdrawn.

What happens if a credit union goes out of business?

In the case of a credit union closing its doors, DICO will inform insured depositors in writing explaining when and how they will receive payment. DICO ensures that payments for deposits are made as soon as possible or upon maturity. The payment includes principal and interest up to $100,000 for each separately insured deposit account, except for those deposits in registered savings.

How do I apply for deposit insurance?

You don’t have to apply for deposit insurance. Deposit insurance, to a maximum of $100,000 applies automatically to the combined total of all deposits, plus an unlimited amount for deposits in each individual registered savings plan.

If you would like more information, please call me or visit the DICO website at You can also request the brochure titled “Your Deposits are Protected” from one of our branches.

Anna Procio
Estate and Administration Officer
Ukrainian Credit Union Limited
416-763-5575 x200

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