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Interest Payable on Certain Deposits By-Law (SOR/99-224)

Regulations are current to 2022-07-25

Interest Payable on Certain Deposits By-Law

SOR/99-224

CANADA DEPOSIT INSURANCE CORPORATION ACT

Registration 1999-05-19

Interest Payable on Certain Deposits By-Law

The Board of Directors of the Canada Deposit Insurance Corporation, pursuant to paragraph 11(2)(g)Footnote a and subsection 14(2.51)Footnote b of the Canada Deposit Insurance Corporation Act, hereby makes the annexed Interest Payable on Certain Deposits By-law.

May 18, 1999

Interpretation

 The definitions in this section apply in this By-law.

Act

Act means the Canada Deposit Insurance Corporation Act. (Loi)

interest termination date

interest termination date means

  • (a) in the case of interest referred to in subsection 14(2.3) of the Act, the date of the commencement of the winding-up;

  • (b) in the case of interest referred to in paragraph 14(2.5)(a) of the Act, the date of the payment by the Corporation; and

  • (c) in the case of interest referred to in paragraph 14(2.5)(b) of the Act, the date of the commencement of the winding-up. (date d’arrêt)

Application

 This By-law applies to deposits referred to in subsection 14(2.51) of the Act.

Prescribed Indexes and Reference Points

 Variable indexes and reference points that are ascertainable and numerically measurable are hereby prescribed for the purpose of paragraph 14(2.51)(d) of the Act.

Determination of Interest

 Subject to sections 5 to 7, the interest accruing and payable in relation to a deposit shall be determined, as of the interest termination date, in accordance with the provisions of the deposit contract between the depositor and the member institution.

  •  (1) Where the term of a deposit contract extends beyond the interest termination date and not all of the information necessary for the calculation of interest is available by that date, the interest accruing and payable in relation to the deposit, other than interest that is payable on or before that date, shall be determined as follows:

    • (a) if the contract does not provide for periodic interest calculations, the interest is to be determined using the following formula:

      A × B (C ÷ D)

      where

      A
      is the principal amount,
      B
      is the rate of interest determined by reference to
      • (i) where the contract provides that the rate of interest is to be determined by reference to the change, on one or more dates after the interest termination date, in an index or reference point specified in the contract, the increase or decrease — as contemplated by the contract — in that index or reference point between the first day of the term of the contract and the interest termination date, or

      • (ii) where the contract provides that the rate of interest is to be determined by reference to the value, on one or more dates after the interest termination date, of an index or reference point specified in the contract, the value of that index or reference point on the interest termination date,

      C
      is the number of days in the term of the contract that have elapsed as of the interest termination date, and
      D
      is the total number of days in the term of the contract;
    • (b) if the contract provides for periodic interest calculations and the interest termination date occurs before the first interest calculation date specified in the contract, the interest is to be determined using the following formula:

      E × F (G ÷ H)

      where

      E
      is the principal amount,
      F
      is the rate of interest determined by reference to
      • (i) where the contract provides that the rate of interest is to be determined by reference to the change, on one or more dates after the interest termination date, in an index or reference point specified in the contract, the increase or decrease — as contemplated by the contract — in that index or reference point between the first day of the term of the contract and the interest termination date, or

      • (ii) where the contract provides that the rate of interest is to be determined by reference to the value, on one or more dates after the interest termination date, of an index or reference point specified in the contract, the value of that index or reference point on the interest termination date,

      G
      is the number of days in the term of the contract that have elapsed as of the interest termination date, and
      H
      is the number of days from the first day of the term of the contract up to the first interest calculation date specified in the contract; and
    • (c) if the contract provides for periodic interest calculations and the interest termination date occurs on or after the first interest calculation date specified in the contract, the interest is the sum of

      • (i) the amount of any interest that, in accordance with the contract, is to be calculated on or before the interest termination date but is not payable until after that date, and

      • (ii) where the interest termination date does not coincide with an interest calculation date specified in the contract, the amount of interest determined using the following formula:

        I × J (K ÷ L)

        where

        I
        is the principal amount as of the preceding interest calculation date specified in the contract,
        J
        is the rate of interest determined by reference to
        • (A) where the contract provides that the rate of interest is to be determined by reference to the change, on one or more dates after the interest termination date, in an index or reference point specified in the contract, the increase or decrease — as contemplated by the contract — in that index or reference point between the preceding interest calculation date specified in the contract and the interest termination date, or

        • (B) where the contract provides that the rate of interest is to be determined by reference to the value, on one or more dates after the interest termination date, of an index or reference point specified in the contract, the value of that index or reference point on the interest termination date,

        K
        is the number of days that have elapsed from the preceding interest calculation date specified in the contract up to the interest termination date, and
        L
        is the number of days from the preceding interest calculation date specified in the contract up to the next interest calculation date specified in the contract.
  • (2) Interest shall not be determined in accordance with subsection (1) where the deposit contract provides for the payment of a minimum amount of interest that exceeds the amount which would be payable under that subsection, or where it provides for the payment of a maximum amount of interest that is less than the amount which would be payable under that subsection.

 Except where a minimum amount of interest is payable under the deposit contract, no interest is payable in relation to a deposit if

  • (a) the index or reference point specified in the contract has not come into existence by the interest termination date and the contract fails to provide for the substitution of an alternative index or reference point; or

  • (b) the index or reference point specified in the contract no longer exists on the interest termination date, the contract fails to provide for the substitution of an alternative index or reference point, and not all of the information necessary for the calculation of interest is available by that date.

 In determining the interest accruing and payable in relation to a deposit, no account shall be taken of any provision of the deposit contract that provides, whether by way of penalty or otherwise, for a reduction in the amount of interest payable in the case of early withdrawal.

Coming into Force

 This By-law comes into force on the day on which it is registered.

 
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