Deposit Insurance For Your Bank Savings Deposits And Interests In Singapore

Deposit Insurance For Your Bank Savings Deposits And Interests In Singapore

In Singapore, the first $20,000 net of liabilities in your bank savings deposits of full banks or financial instituions are insured by the government under the Deposit Insurance Scheme.

Many people keep money in the savings account for daily living expenses — money to pay for groceries, school fees, utilities, phone bills et cetera, before the next pay cheque comes in. With effect from 1 April 2007, $20000 is now insured against the bank going belly up and losing your hard earned cash.

Only money deposited in Singapore dollars and maintained with branch offices of full banks and finance companies in Singapore are covered.

The effect of netting means that any loan owing to a failed bank or finance company by a customer is offset against the amount of deposits belonging to the same customer before deposit insurance is paid out.

As an example, assume you have $45,000 in your savings account and a $30,000 outstanding car loan with the same bank. Your net deposit with the bank after offsetting the loan amount is $15,000.This $15,000 net deposit is insured under deposit insurance.

Now, if you have $45,000 in your savings accounts and a $20,000 loan with the bank, the amount insured is capped at $20,000 although the deposit net of liability with the bank is $25,000.

Deposits are not insured separately in each branch office of a bank or finance company. This means that all your eligible accounts maintained with different branches of a bank or finance company are aggregated and insured up to $20,000 net of your liabilities to the same bank or finance company.

Money held in bank deposits under the CPF Investment Scheme are separately insured up to $20,000.

Only those in Singapore dollars placed in savings accounts, fixed deposits, current accounts and deposits under the CPF Investment Scheme are covered.

Foreign currency deposits, structured deposits and investment products like shares, unit trusts are excluded.

The Singapore Deposit Insurance Corporation (SDIC) administers the deposit insurance scheme in Singapore.

More information on deposit insurance and the SDIC can be found at the SDIC website.