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Way more than CDIC limit in Tangerine - Should I care ?

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Jun 14, 2016
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Way more than CDIC limit in Tangerine - Should I care ?

I have way more than the CDIC limit in Tangerine . Should I be concerned ?

What are the chances of anything happening to Tangerine ?

With Scotia Bank owning them and I think Tangerine has something like $ 40 + Billion in assets and 2 Million customers. What are the chances of them going under in a safe country and safe sound banking country like Canada.

I think Tangerine is TOO big to fail, and the government will and should bail them out in case of any trouble. Am I right ?
14 replies
Member
Oct 18, 2015
294 posts
209 upvotes
Vancouver, BC
Depending on how much is "way more", but couldn't you just open multiple accounts? Accounts are free and the CDIC limit is per account.
Deal Fanatic
Nov 22, 2015
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eyeball123 wrote: Depending on how much is "way more", but couldn't you just open multiple accounts? Accounts are free and the CDIC limit is per account.
CDIC limit is not per account. They insure eligible deposits up to $100K per depositor, per category.

He would need accounts at other financial institutions.
Deal Addict
Mar 8, 2013
2706 posts
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Don't know if you are right about too big to fail, but I wouldn't bet my savings on it when there are lots of alternatives.
Deal Addict
Oct 1, 2008
1998 posts
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Ottawa
superfresh89 wrote: CDIC limit is not per account. They insure eligible deposits up to $100K per depositor, per category.

He would need accounts at other financial institutions.
Or have a joint account at the same institution. In this case you can have for example two saving accounts: one where you are the sole holder + a joint account where you are the primary holder with someone as secondary holder.
Deal Fanatic
Aug 5, 2006
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Global Village
Tangerine is safer for amounts exceeding the CDIC limits than any brick and mortar banks with much higher operational expenses than them imo.
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Sep 9, 2012
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Oakville, ON
rfdm4g4g9 wrote: I have way more than the CDIC limit in Tangerine . Should I be concerned ?

What are the chances of anything happening to Tangerine ?

With Scotia Bank owning them and I think Tangerine has something like $ 40 + Billion in assets and 2 Million customers. What are the chances of them going under in a safe country and safe sound banking country like Canada.

I think Tangerine is TOO big to fail, and the government will and should bail them out in case of any trouble. Am I right ?
Not too big to fail. Feds/OSFI/CDIC would probably help "engineer" a takeover if they got close, but failing is a risk. It's very unlikely to happen, but if it does happen, then the result could be catastrophic if you exceed the CDIC coverage limits as you will lose money.

Would I personally worry about it? Depends on what you mean by "way over" and how much of your net worth this represents.
Deal Expert
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Jun 9, 2003
24798 posts
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Markham, ON
scoper wrote: Tangerine is safer for amounts exceeding the CDIC limits than any brick and mortar banks with much higher operational expenses than them imo.
lol...operational expenses usually won't result in failure of the bank in Canada (OSFI has too many ratios to allow that to happen for day to day business)...usually its a black swan event would lead to failure for banks in Canada.

Bank Swans aren't in the radar for capital stress testing...
Deal Addict
Feb 24, 2008
2018 posts
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I wish the Feds would just raise the deposit insurance amount. It's been at $100K for ever. Even in the US, I think it's $250K.
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Aug 8, 2012
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BC
rfdm4g4g9 wrote: I have way more than the CDIC limit in Tangerine . Should I be concerned ?

What are the chances of anything happening to Tangerine ?

With Scotia Bank owning them and I think Tangerine has something like $ 40 + Billion in assets and 2 Million customers. What are the chances of them going under in a safe country and safe sound banking country like Canada.

I think Tangerine is TOO big to fail, and the government will and should bail them out in case of any trouble. Am I right ?
Yes, you should care, but not because of the risk of failure ... because the interest rate sucks :)

Unless you've already maxed out CDIC limits at all the other alternatives ... 2.25% EQ for starters, lots of others here: official-rfd-thread-savings-accounts-up ... -a-698055/
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Deal Addict
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Mar 31, 2009
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I wouldn't worry about it, but I would take the opportunity to open an account at some other financial institution and put money there. Why not put $100,000 at EQ and take a higher interest rate, and benefit from having up to another $100,000 protected? Same logic, how about an Achieva account that pays more as well. Or Zag. Etc.

May as well get the extra protection when you can also make more interest. I can understand saying it's not worth it for a few bucks interest, but obviously the CDIC coverage concerns you a bit, so you may as well fix the problem when you'll actually be better off by doing so.

But the actual risk isn't really a concern IMO. I bet there are a lot of millionaires who have a lot more than $100,000 sitting in accounts, and they don't have trouble sleeping at night worrying about whether or not Scotia bank/tangerine is going to fail lol.
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Mar 25, 2012
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Kelowna
rfdm4g4g9 wrote: I have way more than the CDIC limit in Tangerine . Should I be concerned ?

What are the chances of anything happening to Tangerine ?

With Scotia Bank owning them and I think Tangerine has something like $ 40 + Billion in assets and 2 Million customers. What are the chances of them going under in a safe country and safe sound banking country like Canada.

I think Tangerine is TOO big to fail, and the government will and should bail them out in case of any trouble. Am I right ?
Personally, I don't concern myself with CDIC limits (other than, perhaps, with small-ish institutions like Peoples Trust Company in case I'd stay within my limits). Tangerine Bank is owned by Scotiabank Group but, keep in mind, its CDIC insurance is not part of Scotiabank's - they pay separate premiums. In terms of institution failure, I don't think the regulators would allow Tangerine to fail without Scotiabank absorbing those deposits in full of its subsidiary. And, in terms of any of the "Big 5" failing, if that ever happened (it won't), we'd be in dire economic trouble like something we've never seen. Best not speculate on this extremely unlikely scenario in an attempt to "stir the pot," so to speak. :)

That said, remember that you can effectively have more than $100,000 with a single institution through a myriad of ways:

(a) $100,000 in non-registered savings/GIC in one's own name
(b) $100,000 in a non-registered savings/GIC joint with a spouse*
(c) $100,000 in a TFSA savings/GIC in one's own name**
(d) $100,000 in an RRSP or RRIF (depending on age) savings/GIC in one's own name***
(e) $5000 held in a mortgage property tax account for a mortgage you hold with your spouse at a CDIC member financial institution

Result: $405,000 is still CDIC insured

* This can be further increased by having a separate, joint savings/GIC with your son or your daughter or your second cousin once removed or by having three parties on the depositor as each one of those becomes a new "depositor" in CDIC's view.
** This is something I learned as, when TFSAs were first introduced, my understanding was that CDIC included them as part one's non-registered deposits in one's own name. It seems to be separate insurance limits like RRSPs or RRIFs, which would be positive and make sense.
*** Technically, you could have a separate RRSP and RRIF with $100,000 each if you're under age 71; however, this would be likely be inadvisable as the RRSP would need to be converted to a RRIF by Dec. 31st in the year in which you turn 71 and thereby affect things like minimum annual withdrawal, your income taxation level and, potentially, your OAS clawback.

Further, there's one other element - deposits held "in trust" for someone else; however, CDIC cautions this "is complicated" and recommends speaking with your financial and legal advisor, as applicable.

And furthermore, in cases where an institution uses one common banking platform but has several CDIC members for which it wholly owns, you could still have extra CDIC coverage per depositor as they simply code your GIC or term deposit or savings account with that institution but still shows up within a common online banking profile, assuming you've opted to share your personal information with their relevant affiliates/subsidiaries. Example: $100,000 in a 5-year GIC in one's own name with The Bank of Nova Scotia and $100,000 in a 5-year GIC in one's own name with Scotia Mortgage Corp would be fully CDIC insured.

Tangerine Bank and Scotiabank products would be CDIC insured separately but, because they sell different products and use different platforms, would be inaccessible from the same platform.

Make sense? Good. :)

Cheers,
Doug
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Oct 7, 2007
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It sounds like you do care and that is why you are asking. You will get every opinion on the RFD website about whether to care or not. I think you should protect it if the money is important to you. Do you have to take a chance? I am thinking you don't so spread it around. The contract with CDIC is for $100k maximum so if you care about the amount invested over $100k invest accordingly. Otherwise, if you are okay with losing the rest then go ahead. I highly doubt that anything will happen to amounts invested at Tangerine BUT I am not interested in having to work that much longer to cover any losses due to a failure in the banking system. A lot of people that keep their money in cash or term deposits as opposed to stocks is because they want to preserve their capital. So, by definition, such people are low-risk. The biggest failure I fear is some catastrophe caused by the (dare I say it) "real estate bubble" that we have going on here in Canada. Agencies outside Canada keep warning us to get our house in order (no pun intended) but our governments keep saying "no bubble here". If it all comes to an end, there won't be any warning. It will just domino and then we will be at the mercy of whatever our government decides. If other non-Canadian governments have behaved badly after the fact, what are the chances that Canadian savers will have any say in what happens when a financial crisis hits?

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