BACKGROUND:

In February 2002, EKOS Research Associates Inc. conducted the "CDIC Awareness Survey." This telephone survey is conducted annually to enable Canada Deposit Insurance Corporation (CDIC) to track the impact of its public awareness and education program. CDIC will use the survey findings to refine directions for this program.

The objectives of the public awareness and education program are to increase awareness and knowledge of CDIC and deposit insurance, including what financial products are and are not eligible for deposit insurance protection.

1,100 Canadian adults took part in the survey. The final report of the survey findings was released in April 2002.

KEY FINDINGS:

Awareness of Deposit Insurance / CDIC
When Canadians were asked whether their savings would be protected against loss if their financial institution were to fail, 39 per cent indicated yes, completely, and a further 23 per cent indicated they would be partially protected. One in four, however, were unsure if their savings would be protected.

60 per cent of Canadians indicated they were aware of CDIC. This marks an increase of 6 per cent from 2001, and the highest level of awareness of CDIC in the past five years.

Knowledge of Deposit Insurance / CDIC
63 per cent of those surveyed could not name an insured financial product on their own.

Among those who did cite specific financial products covered by CDIC, 22 per cent mentioned savings accounts, 13 per cent chequing accounts, 12 per cent GICs, and 10 per cent term deposits.

For eligible products, the prompted approach – "are the following products insured by CDIC?" – yielded an awareness level of 60 to 70 per cent. This is consistent with levels for the past few years.

There has been improvement in the overall level of awareness about the fact that mutual funds are not covered by deposit insurance. Although 37 per cent were unsure whether mutual funds are insured by CDIC, there has been improvement in the overall level of awareness that they are not insured, with 32 per cent of respondents correctly stating that mutual funds are not eligible. This is an eight-point gain from last year.

When asked whether mutual funds would be insured if they were purchased through a CDIC member institution, one in four respondents said no, while the remaining were split between those who were unsure (36 per cent) and those who incorrectly stated that the money would be insured (36 per cent).

Respondents who were unable to come up with any insured financial products on their own were prompted on their awareness of which products are not eligible for deposit insurance – with the following results: 48 per cent correctly stated that stocks are not insured, 15 per cent for bonds, and 37 per cent for foreign currency accounts.

For more information about what products are covered, 60 per cent said they would ask an employee of a financial institution. The second major source identified was CDIC, either through its 1-800 inquiries service (17 per cent) or its Web site (13 per cent).

The maximum basic protection financial consumers can have with any one CDIC member institution is $60,000, including principal and interest. 29 per cent of Canadians (29 per cent) correctly cited this maximum amount – a slight increase from 2001.

Attitudes Toward Deposit Insurance
Measures of attitudes toward deposit insurance indicate that Canadians are concerned about the security of their money. A strong majority, 87 per cent, stated that the security of their money should a financial institution fail was a highly important factor in selecting where to do their personal banking.

80 per cent of respondents agreed that individuals have a responsibility to find out whether their deposits are insured against loss.

Approximately one in two Canadians indicated that they have thought about whether or not their deposits are insured against loss.

Informing Canadians
About half of Canadians stated that the responsibility for informing the public about deposit insurance should be shared among the federal government, the banking industry in general and the institution where deposits are held.

The survey results indicate that there is no single most trusted source for information about deposit insurance. While one in four stated they would trust the government the most, a similar proportion (22 per cent) indicated they would trust the member financial institutions. However, 47 per cent said they would prefer a partnership between the government and member institutions for providing information about deposit insurance.

32 per cent would prefer to receive additional information by printed information in the mail, 15 per cent by printed information from member institutions, 14 per cent from a financial advisor, 14 per cent from the CDIC 1-800 inquiries service, 13 per cent on the CDIC Web site, and 9 per cent from financial institution employees.

Banking Profile of Canadians
Banking using technology such as Internet, telephones or Automated Teller Machines (ATMs) at a branch has become nearly ubiquitous. Eight in ten Canadians use ATMs and four in ten report doing telephone banking. One in four Canadians does some banking over the Internet.

There has been a steady increase in the proportion of Internet bankers, from 15 per cent in March 2000 to 25 per cent in March 2002. Telephone banking has increased very little over this same period, from 29 per cent to 31 per cent.

The survey also found that the majority of Canadians bank in person – that is, using a teller – at least once a month. The proportion of those who do not do any banking in person is slightly higher among Internet bankers (41 per cent). It is interesting to note that almost 1/3 (32%) had not banked using a teller in the previous month.

The main reasons why people go into a bank to do their personal banking are to deposit funds (35 per cent), withdraw funds (28 per cent) and to pay a bill (19 per cent).

Nine out of ten Canadians have a chequing account and a large proportion (68 per cent) also have a savings account.

Mutual funds are the most common type of financial and investment product owned by Canadians (37 per cent). GICs are next at 23 per cent.

FURTHER INFORMATION:

A federal Crown corporation established in 1967, CDIC insures over $339 billion of deposits at member banks, trust companies and loan companies. To be eligible for insurance, deposits must be in Canadian currency, payable in Canada, and repayable on demand or no later than five years from the date of deposit.

For more information about CDIC and deposit insurance, please call the CDIC inquiries service at 1-800-461-CDIC (1-800-461-2342), or check the CDIC Web site at www.cdic.ca.


Last modified : 2 May 2002