CDIC Insurance for Canadian Business Banking: Complete Protection Guide

When it comes to running a business, there’s nothing worse than uncertainty about where your money sits or whether it’s protected. That’s why understanding Canadian Deposit Insurance Corporation (CDIC) insurance on business accounts is essential.

For most Canadian companies, deposit insurance provides peace of mind that the funds in their account will still be there if their financial institution fails. But coverage isn’t always as straightforward as it seems. Between coverage limits, excluded products and non-member institutions, it’s easy to make assumptions that could leave your business exposed.

Here’s a CFO-worthy deposit insurance guide: everything you need to know about CDIC deposit protection, how it works and what options businesses have to keep funds safe (and growing).

What is CDIC insurance for business accounts?

The CDIC is a federal Crown corporation established in 1967. Its purpose is simple: to protect deposits held at member financial institutions if they fail. Think of CDIC deposit protection as Canada’s behind-the-scenes safety net, ensuring that when a bank wobbles, depositors don’t need to. 

Membership in CDIC includes all of Canada’s major banks and several smaller trust and loan companies. Coverage is automatic and free: you don’t need to sign up, register or pay a dime. As soon as you deposit eligible funds in a CDIC member institution, your coverage kicks in automatically.

In addition to protecting deposits, CDIC serves as Canada’s bank resolution authority, meaning it has the power to step in when a member institution is in trouble and manage the process to prevent widespread financial fallout. This is part of why Canada’s banking system is so stable.

So while you might not think much about business banking insurance on a day-to-day basis, CDIC plays a huge role in maintaining confidence in Canada’s financial system. It’s the kind of background hero you don’t notice until you really, really need it.

How CDIC insurance works

Let’s take a closer look at how this system works to protect Canadians. CDIC coverage automatically insures up to $100,000 per depositor, per insured category, per member institution. That’s the key formula to remember.

Here’s how that plays out in real life. If your business has a $100,000 savings account and a $100,000 GIC at the same CDIC member bank, only $100,000 of that combined total is protected. But if you hold $100,000 at one CDIC bank and another $100,000 at a different member bank, both are fully insured, and each relationship is treated separately.

It’s also worth noting that CDIC covers deposits in both Canadian and foreign currencies, which helps businesses manage cross-border operations. 

In the unlikely event that a CDIC member institution fails, the process is designed to be automatic, fast and stress-free. You don’t have to file a claim or wait months for a resolution. CDIC reimburses insured deposits, often within a matter of days, either through direct payments or by transferring your accounts to another stable institution.

And the system works. According to the CDIC, the corporation has handled 43 financial institution failures since its inception in 1967, protecting the deposits of millions of Canadians. And the fact that there hasn’t been a single failure since 1996 says a lot about the strength of both CDIC and Canada’s regulated banking environment.

For business owners and CFOs, that track record matters. It’s one less thing to worry about when managing cash flow and payroll, because if the unthinkable happens, CDIC has your back.

A key element in responsible financial management, deposit insurance helps maintain trust and stability in Canada’s economy, keeping small and mid-sized businesses confident in their ability to grow. As finance pros know, protecting cash money is table-stakes preparation, not paranoia. 

Which deposits are covered (and not covered)

Not all money is treated equally under CDIC rules, so whether you’re relying on traditional business accounts or business account alternatives, it’s wise to examine your coverage. The type of account, and even the institution it’s in, can make or break your protection.

Covered business deposits include:

• Chequing and savings accounts held at CDIC member institutions
• Term deposits and GICs with an original term of five years or fewer
• Money orders, drafts and certified cheques issued by CDIC members
• Certain debentures issued by CDIC member loan companies

That’s a solid list, but there are a few important exclusions that trip people up. Building familiarity with which types fall into which category is helpful.

Business deposits not covered under CDIC:

• Mutual funds, stocks, bonds and ETFs
• Cryptocurrencies or other digital assets
• Contents of safety deposit boxes
• Losses due to fraud or theft
• Deposits at non-member institutions

Here’s where things get interesting.

Businesses sometimes assume that “money in the account” automatically means “money that’s insured.” But that’s not the case if your deposits are held with a fintech platform or payment service provider that isn’t a CDIC member. (Many modern platforms, like Float, work with CDIC-member Scotiabank to ensure funds are held securely. But not every provider does, so it’s worth confirming how yours operates.)

If you’re unsure, check CDIC’s online member list or contact the provider directly to see if they partner with one. Funds held through a CDIC member bank receive the same level of CDIC protection as deposits held directly with that institution.

Coverage limits and categories

The standard coverage limit of $100,000 per depositor, per insured category, per institution may seem simple. The real strategy, however, lies in how you organize your accounts.

CDIC recognizes nine separate categories of deposits:

1. Deposits held in one name
2. Joint deposits
3. Deposits held in trust
4. Registered Retirement Savings Plans (RRSP)
5. Tax-free Savings Accounts (TFSA)
6. Registered Education Savings Plans (RESP)
7. Registered Disability Savings Plans (RDSP)
8. Registered Retirement Income Funds (RRIF)
9. First Home Savings Accounts (FHSA)

Each category is insured separately. That means if you (or your business) hold deposits in multiple categories, you could be eligible for multiple layers of $100,000 protection at a single bank.

For businesses, that might mean separating operating funds, trust accounts and client deposits. An accounting firm holding funds in trust for clients could qualify for coverage in both the “business” and “trust” categories. This effectively doubles protection under one roof.

For larger organizations or those managing multi-currency operations, spreading deposits across several CDIC member institutions can extend insured coverage even further.

This is where it pays to think like a CFO, making the most of Canadian business deposit insurance while diversifying categories and institutions. You’ll protect every dollar, even as balances grow. Translation: don’t put all your eggs (or operating funds) in one financial basket.

What happens if a bank fails

A bank failure sounds dramatic, and it absolutely is—but for depositors, CDIC’s process is designed to minimize disruption.

When a CDIC member institution runs into trouble, CDIC steps in. They ensure depositors retain access to their insured funds as quickly as possible. The most common approach is a transfer of deposits to another healthy member institution, often overnight, so customers wake up to business as usual.

In some cases, CDIC may create a bridge bank, which is a temporary institution that holds deposits and maintains normal operations while the failed bank is wound down. This prevents chaos for customers, employees and vendors who rely on those funds.

If neither option is feasible, CDIC issues a direct payment to insured depositors, typically within days, not weeks or months.

For small businesses, that kind of quick turnaround can mean the difference between meeting payroll or facing an operational crisis. The protection isn’t just about avoiding loss. It helps to maintain stability and trust in a system that businesses depend on every single day.

This ability to act swiftly reinforces the confidence that Canadian business deposit insurance aims to provide, ensuring that no company has to hit pause on operations because of a bank failure.

And yes, it’s comforting to know that while your favourite streaming service might occasionally go down for “maintenance,” your bank account won’t.

Limitations and exclusions for business accounts

While CDIC protection is a significant safeguard, it has limitations that are particularly relevant for growing businesses.

For starters, that $100,000 cap can feel small once your company begins holding larger balances for payroll, supplier payments or working capital. A single account holding $500,000 in cash reserves would only have one-fifth of its funds insured under CDIC rules.

Coverage also applies only to CDIC member institutions and partners, not to credit unions, foreign bank branches or fintechs without CDIC member partnershipsthat don’t hold deposits directly. Provincial credit unions, for instance, are insured separately under their respective regional frameworks (like the Financial Services Regulatory Authority (FSRA) in Ontario or the Autorité des marchés financiers (AMF) in Quebec), each with its own rules and limits.

It’s also important to remember that CDIC doesn’t protect you against losses from fraud, market fluctuations or currency changes. Its sole focus is protecting eligible deposits if a member institution fails.

So while CDIC is an important layer of protection, it’s not a catch-all guarantee. Businesses still need sound financial management practices like strong internal controls, diversified accounts and real-time visibility into where money sits to minimize risk. It’s also helpful to implement strategies for healthy working capital management in Canada.

Bottom line: CDIC insurance on business accounts is your seatbelt, not your airbag. It’s great protection, but you still need to drive carefully.

Float’s protection advantage

Float isn’t a bank, and that’s by design. We’re a FINTRAC-registered Money Services Business (MSB) that safeguards business funds through two complementary layers of protection. 

Protection layer 1: Trust accounts

When you deposit into a Float Business Account, your CAD and USD funds are held at Scotiabank in a dedicated trust account under your business’s name. These funds are legally separate from Float’s own assets, which means that even in the unlikely event Float ceased operations, your money would remain fully yours and accessible.

Float is a registered Payment Service Provider (PSP) with the Bank of Canada under the Retail Payment Activities Act (RPAA). This designation ensures that Float meets strict regulatory standards for safeguarding customer funds.

When you deposit into a Float Business Account, your CAD and USD balances are held in a dedicated trust account at Scotiabank under your business’s name. In accordance with RPAA requirements, these funds are legally segregated from Float’s own operating accounts. This means 100% of your money remains yours and fully accessible, even in the unlikely event that Float ceased operations. This is your primary layer of protection.

Protection layer 2: CDIC coverage

We’ve partnered with Scotiabank to offer CDIC insurance, Canada’s federal standard for deposit protection. Eligible deposits held in Float Business Accounts are insured through Scotiabank’s Canada Deposit Insurance Corporation (CDIC) membership, up to $100,000 CAD total, combined across both CAD and USD balances.

While Float itself isn’t a CDIC member institution, this partnership ensures your deposits benefit from the same protection offered through one of Canada’s largest banks. 

We also maintain SOC 2 Type II certification, meaning our security controls and data practices are independently audited and verified. From encryption to operations, Float’s infrastructure meets strict standards for safeguarding sensitive financial information. 

And because transparency is non-negotiable, you’ll always know where your funds are held and how they’re protected, right down to your current balance and interest earned.

Beyond protection, you’ll earn up to 4 % interest on balances over $25,000 (CAD or USD) up to $1 million. You’ll also earn 1 % cashback on monthly card spend over $25,000. There are no lock-ups or complex terms, and withdrawals are processed in as little as two to five business days.

Together, these safeguards combine the institutional security of a major Canadian bank with Float’s modern tools and flexibility, giving businesses confidence that their money is both protected and productive.

Learn more about Float

Get a 10-minute guided tour through our platform.

See a Demo

The takeaway: Safe money is smart money

Understanding CDIC insurance for business accounts helps you make smarter decisions about where company funds belong.  

Traditional CDIC coverage remains the cornerstone of Canada’s financial system, but it has its limits. Businesses with higher balances, multi-currency accounts or a need for real-time visibility can benefit from Float’s two-layer protection model: trust-based fund separation plus CDIC insurance through Scotiabank. 

The result? A secure, compliant and transparent platform where your funds stay safe, earn competitive returns and support your operations seamlessly. 

Because the best kind of protection keeps your money safe and helps it grow. It might even make your finance team smile.

---

Written by