U.S. Bank Meltdown: These 2 Canadian Banks Are Safer (2024)

FAQs

Are Canadian banks safer than US banks? ›

Thankfully, experts say Canadian banks are significantly less vulnerable to failure than our neighbours' to the south, for many reasons, and your money in a Canadian bank will continue to be safe.

Conclusion. Keeping your money in a CDIC-insured bank and not going over $100,000 in account value protects your money. The Canadian banking system is so well-regulated that bank failure is unlikely. The assurance of a CDIC-insured bank can free you to find the right account for your financial needs.

Deposit insurance protects your savings if your financial institution fails. You don't have to apply or pay for deposit insurance. The Canada Deposit Insurance Corporation (CDIC) automatically insures your eligible deposits. This applies to deposits held at CDIC member institutions in Canada.

In particular, having more than one bank account can provide you with extra protection for your funds if you have more than the $100,000 CDIC insurance limit. Splitting your funds between banks can also give you access to extra features and benefits that you don't have at your current financial institution.

The government generally can't take money out of your bank account unless you have an unpaid tax bill (and before they go to that extreme, they will send you several notifications and offer you multiple opportunities to pay your outstanding taxes).

How safe is the money in your Canadian bank accounts? According to Wikipedia, there have been 43 bank failures since 1967, and none since 1996. So the answer is, very safe.

There has only been one bank failure so far in 2024. Republic First Bank (Philadelphia), which did business as Republic Bank, failed April 26. That was the first Federal Deposit Insurance Corp. (FDIC) bank to fail since Citizens Bank of Sac City, Iowa failed in November 2023.

Which bank is least likely to go bust? ›

The banks of greatest concern are Flagstar Bank and Zion Bancorporation, according to the screener. Flagstar Bank reported $113 billion in assets with a total CRE of $51 billion. The bank, however, only had $9.3 billion in total equity, making its total CRE exposure 553% of its total equity.

Your money is safe in a bank, even during an economic decline like a recession. Up to $250,000 per depositor, per account ownership category, is protected by the FDIC or NCUA at a federally insured financial institution.

“Canada's banks are tested and trusted. They're strong and durable, and we've seen that time and time again. Think of the last three external shocks—[the financial crisis of] '08-'09, the pandemic, 2023. Tested and trusted is our brand here,” says Labrèche.

If a lender collapses, your loan may be transferred to another institution, but you are still responsible for making payments. To protect yourself, make sure your contact information is up to date, keep copies of your statements, and continue making payments as usual.

Stringent regulations: Canada has a strong regulatory framework that requires banks to maintain high levels of capital and liquidity. This helps to ensure that banks can absorb losses and continue to operate even in difficult economic conditions.

Of the country's six biggest banks, National Bank of Canada has no exposure to office real estate in the U.S., while Bank of Nova Scotia's lending is minimal, filings showed.