Should you be worried about the health of Canadian Banks?
In March when Silicon Valley Bank, Signature Bank, and Credit Suisse closed within 3 days of one another, many were left in a panic wondering what was going on. Jeffrey Schwartz Executive Director of Consolidated Credit Canada is here to answer the important questions and put any lingering fears to rest.
In the middle of March, over just three days, two banks in the United States failed. First, there was Silicon Valley Bank in California. Then Signature Bank in New York. Three days after that, Credit Suisse failed in Switzerland.
So, what’s going on here? More importantly, do you need to worry about it?
The answer is simple: No! You don’t have to worry. Not at all. This isn’t the beginning of a scary trend. Bank failures are rare. In fact, in Canada, no bank has failed since 1985. Before that, you’d have to go all the way back to 1923 to find a Canadian bank that went out of business.
To put this in perspective, no Canadian bank failed during the Great Depression, World War II, or the Great Recession. And in those rare times they do fail? You’re protected.
The Canada Deposit Insurance Corporation, or CDIC, guarantees you’ll get your money back if a bank fails. It covers up to $100,000 per account. You don’t even have to do anything. No paperwork. No phone calls. The CDIC automatically returns any money you had in the failed bank – up to $100,00, which is more than most of us have in any single bank account.
In the United States, their CDIC is called the FDIC. It guaranteed the deposits for account holders in the Signature and Silicon Valley banks.
I’ve been asked by worried people if they should do something, since so many banks are failing in the span of just a few days. My advice has been: Do nothing. Unless you have over $100,000 in a single bank account, don’t let this coincidence distract you from saving and budgeting.
Canadians need to focus on their own money, so THEY don’t fail. Consolidated Credit can help. We offer a free debt analysis when you call one of our trained experts. From there, we’ll give you all the options so your finances will never fail.