Is EQ bank safe in Canada?
- Asked By
- Updated On:29-Nov-2022
- Replies:1
Short Answer
Yes, it is safe to open an account with EQ bank and park your funds there. Let's dig into some more details why this Canadian bank is deemed safe for its account holders.
Detailed Answer
What is EQ Bank?
EQ bank was incorporated in 2016 as the first alternative to traditional banking in Canada. It was launched by Equitable bank, one of Canada’s challenger banks. The motto of the bank is to reconstruct traditional banking in a smarter way. The bank now has over 1000 employees who are striving to achieve this.
Is EQ bank safe in Canada?
EQ bank is a part of Equitable bank. This Equitable bank was established 50 years ago and has more than $45 billion worth assets under management.
EQ bank itself has nearly $7 billion assets under management.
EQ bank and Equitable bank are together a part of Canada Deposit Insurance Corporation (CDIC). CDIC is an independent body that was founded in 1967 by the Canadian parliament. This authority promises to compensate the banking customers, if their associated bank fails due to insolvency of lack of liquidity. It works out like an insurance cover and the banks have to pay insurance premiums to be a part of CDIC.
The coverage offered by CDIC is $100,000 per insured, per account holder/depositor. Please note that we have mentioned that the coverage is up to $100,000, which means it is the maximum and not the absolute compensation.
Please note that CDIC covers only default of banks and not loss of money because of fraudulent activities.
What does CDIC cover?
- Savings account
- Chequing account
- Term deposits
- Guaranteed Investment Certificate
- Money order
- Bank draft
- Certified cheque
- US dollar account
What does CDIC not cover?
- Shares
- Bonds
- Exchange traded funds
- Crypto
- Mutual funds
EQ Bank - Practical User case
Imagine John has the following accounts with EQ:
Savings Account Plus: $10,000
Joint Savings Plus Account with spouse: $150,000
TFSA invested in shares, bonds, ETFs and mutual funds: $50,000
Total: $210,000
Now let’s see how much CDIC will compensate for
Savings Account Plus: $10,000
Joint Savings Plus Account with spouse: $100,000
TFSA invested in shares, bonds, ETFs and mutual funds: $0
Total: $110,000
Safety of EQ Bank in Canada
We can infer that your deposits in EQ banks will be safe and secure. If you are someone who is very concerned, you may opt only for those deposits that are covered by CIDC and not invest more than $100,000 in such accounts.
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Discussion (0)
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