First-Home Savings Account Added to CDIC Coverage

Summary#

This is the By-law Amending the Canada Deposit Insurance Corporation Co-owned and Trust Deposit Disclosure By-law (SOR/2023-38). It adds the new first-home savings account type to the list of “special income arrangements” for deposit insurance record-keeping so that those accounts can receive separate CDIC coverage. The change took effect around April 1, 2023 (see below for exact start rule).

What it does#

• Adds this item to the by-law’s definition of “special income arrangement”: a Tax-Free First Home Savings Account referred to in subsection 5(3.1) of the schedule to the Act.
• Aligns the by-law with a change made by the Fall Economic Statement Implementation Act, 2022 to the Canada Deposit Insurance Corporation Act that created the new category in the law.
• Says the amendment comes into force on April 1, 2023, or on the day the by-law is registered if that is later.

Who's affected#

• CDIC member institutions (for example, banks and federally regulated credit unions) — they must record the account type on depositor records so deposits get appropriate insurance treatment.
• Depositors who use a first-home savings account — their deposits in that account will be treated as a separate insured category under CDIC rules.
• It is unclear from the notice whether any particular institutions will need to change systems immediately; the text says the amendment itself does not create new regulatory costs beyond the underlying law change.

Why it matters#

• Deposits in the newly named first-home savings account will be eligible for separate deposit insurance treatment. That can affect how much coverage an individual has across multiple accounts.
• The change is mostly technical and follows a parliamentary amendment. For most people it won’t change day-to-day banking, but it matters to anyone using a first-home savings account and to institutions that must label accounts correctly for insurance purposes.