Who rates banks for safety?

Q – Do you know of an organization that rates the safety of Canadian banks and credit unions? – J.-L. R.

A – The rating of bonds or preferred shares issued by banks is a measure of the safety of the underlying company. All five major banks receive a rating of AA (low) on their deposits and senior debt from the Dominion Bond Rating Service. That’s about as high a rating as a corporation can expect. The Province of Ontario, by comparison, gets a straight AA rating.

However, I could not find any ratings for credit union debt on the DBRS Web site and I do not know of any organizations that rate them for safety. Credit union deposits are covered by a form of deposit insurance, however, with maximum limits that may exceed the CDIC coverage that the banks provide. – G.P.