People generally consider that money deposited in a bank is always safe as all banks or financial institutions are systematically managed. Perhaps, it’s not absolutely true. In today’s complex environment, anything can turn out to be worse. The money that you deposit in fixed deposit accounts also pertain risks. However, to counterbalance this risk, Deposit Insurance Scheme was introduced in Singapore. All the licensed banks in Singapore are supervised by a regulatory body called Monetary Authority of Singapore (MAS). MAS has come up with it to protect customers’ money. Mentioned below are major facts that you should know about the Deposit Insurance Scheme:
5 Facts on Deposit Insurance Schemes in Singapore
The Formation of Deposit Insurance Scheme
- The Singapore Deposit Insurance Corporation (SDIC) governs it Singapore. SDIC was set up under an act of parliament in Singapore the Deposit Insurance and Policy Owners' Protection Schemes Act 2011.
- This scheme was enhanced in the year 2011.
The coverage is based on per bank per person
- The insurance amount is up to S$50,000 per depositor per Scheme member.
- It guards non-bank depositors such as individuals, sole proprietorships, charities, companies, unincorporated entities, and partnerships, with a scheme member.
- Non-bank depositors with trust and client accounts can get insurance up to $50,000 per account.
- Every branch office will not insure deposits separately. All your accounts in various branches of the same bank will be aggregated and insured up to S$50,000.
- Money savings that come under CPF Investment Scheme and CPF Minimum Sum Scheme, are aggregated and insured separately up to $50,000, only if you are a Deposit Insurance Scheme Member.
- The joint account holders will get the funds distributed evenly and the total amount of insured deposits is then covered up to S$50,000.
SDIC provides other services
- SDIC is not a government body, rather it is a company. It was established in 2006.
- SDIC covers insurance policies like endowment plans, life insurances, medical plans, and individual annuities.
- It does not provide deposit insurance coverage for free, rather it charges premiums from financial institutions.
Features of Deposit Insurance Scheme
- All banks in Singapore provide the Deposit Insurance Scheme, except those that are exempted by MAS.
- The transaction must be in Singapore dollars and held in current/savings/fixed deposit accounts.
- It excludes certain deposits like structured and foreign currency deposits, investment products like unit trusts and shares.
- If your bank is merged with another one, if you had the insurance before the merger then, your deposit will be insured separately up to S$50,000 till one year after the legal date of the merger.
- You need not pay for the insurance coverage.
If Deposits exceed insurance amount
You can file a separate claim with the liquidator, in case if your deposited amount is more than the compensation provided by SDIC, in order to get the difference amount. But, you cannot ask for the amount that has already been compensated.