Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Memo To File
RE: 212(1)(b)(iii)(D)
I had Jeff Crew of the Research Division of the office of the Superintendent of Financial Institutions (reports to Minister of Finance) do some research for me to ascertain what exactly is an "amount deposited" with a bank to which the Bank Act applies Mr. Crew confirmed the following:
- Deposits with a bank are unsecured, i.e. depositors rank as general creditors, rather than as secured or preferred creditors.
- Each deposit ranks pari passu, rather than being subordinate to, all other unsecured deposits (bank debentures under section 132 of the Bank Act, in contrast, are subordinate in right of payment to deposits).
- There are essentially three categories of deposit, as reflected by items 1, 2 and 3 of the Liabilities section of Schedule J, which is the Consolidated Return of Assets and Liabilities filed by a bank with the Superintendent of Financial Institutions: Item 1 - Deposits payable on demand, Item 2 - Deposits payable after notice, and Item 3 - Deposits payable on a fixed date.
- There is no time limit for which a deposit may remain outstanding; e.g. a G.I.C. or other deposit instrument could exceed 5 years in term and still be reported as an Item 3 deposit as long as it ranks pari passu with other unsecured deposits (contrast with section 132 bank debentures which must have a term no less than 5 years but which are subordinate to deposits).
- Not all deposits are covered by C.D.I.C. insurance. Examples of amounts not insured:
- all amounts deposited by a particular depositor with a particular institution that exceed $60,000.
- deposits with fixed terms exceeding 5 years.
- foreign currency deposits or amounts deposited with a branch outside Canada
- Most, but not all, deposits are taken into account in determining the bank's reserves.
- Any amount not reported in items 1, 2 and 3 of the Liabilities section of Schedule 3 is not a deposit.
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1987
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1987
Email this Content