Deposit Insurance & Policy Owners' Protection Schemes Regulations 2011

Deposit Insurance & Policy Owners' Protection Schemes Regulations 2011

The Monetary Authority of Singapore introduced the Deposit Insurance and Policy Owners' Protection Schemes (Deposit Insurance) Regulations 2011 recently.

In summary, with effect from 1st May 2011, Singapore dollar denominated deposits placed with a DI (Deposit Insurance) scheme member in Singapore are insured for up to $50,000.

The DI Scheme members are:

Full Banks
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
BANGKOK BANK PUBLIC COMPANY LIMITED
BANK OF AMERICA, NATIONAL ASSOCIATION
BANK OF CHINA LIMITED
BANK OF EAST ASIA LTD
BANK OF INDIA
BANK OF TOKYO-MITSUBISHI UFJ, LTD
BNP PARIBAS
CIMB BANK BERHAD
CITIBANK NA
CITIBANK SINGAPORE LIMITED
CREDIT AGRICOLE CORPORATE & INVESTMENT BANK
DBS BANK LTD
FAR EASTERN BANK LTD
HL BANK
HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
ICICI BANK LIMITED
INDIAN BANK
INDIAN OVERSEAS BANK
JPMORGAN CHASE BANK, N.A.
MALAYAN BANKING BHD
MIZUHO CORPORATE BANK LTD
OVERSEA-CHINESE BANKING CORPN LTD
PT BANK NEGARA INDONESIA (PERSERO) TBK
RHB BANK BERHAD
SINGAPORE ISLAND BANK LIMITED
STANDARD CHARTERED BANK
STATE BANK OF INDIA
SUMITOMO MITSUI BANKING CORPORATION
UCO BANK
UNITED OVERSEAS BANK LTD

Finance Companies
HONG LEONG FINANCE LIMITED
SING INVESTMENTS & FINANCE LIMITED
SINGAPURA FINANCE LTD

Note: Full banks are licensed to transact the whole range of banking business which includes deposit taking, the provision of cheque services and lending. On the other hand, finance companies focus on providing small-scale financing, including instalment credit for motor vehicles. Both full banks and finance companies are permitted to take Singapore dollar retail deposits.

Deposit insurance scheme membership may change without notice.

Amount insured under the DI Scheme:

In the event a DI Scheme member fails, all insured deposits placed with that member, except for deposits under the CPF Investment Scheme and CPF Minimum Sum Scheme, are aggregated and insured up to S$50,000. If you are a sole proprietor, your personal eligible accounts will be aggregated with the eligible accounts of your sole proprietorship(s). Trust and client accounts held by non-bank depositors are insured up to S$50,000 per account, without aggregation.

Deposits are not insured separately in each branch office of a DI Scheme member i.e. all your eligible accounts maintained with different branches of a DI Scheme member are aggregated and insured up to S$50,000.

(source: Singapore Deposit Insurance Corporation)

The Team

Singapore Savings Account Rates.

Expiry of Government Guarantee on Deposits

Expiry of Government Guarantee on Deposits

We highlight news on the expiry of government guarantee on deposits. Subject to limits, not all money kept in Singapore bank savings accounts will be guaranteed by the government from the first of January 2011.

This update is obtained from Monetary Authority of Singapore site.

"On 16 October 2008, the Singapore Government announced that it would guarantee all Singapore Dollar and foreign currency deposits of individuals and non-bank customers in banks, finance companies and merchant banks until 31 December 2010.

1. Why is the Government guarantee not extended beyond 31 December 2010? What is the impact?

The Government guarantee was an extraordinary measure in response to blanket guarantees by other jurisdictions in the region, to ensure a level international playing field for financial institutions in Singapore. It was a precautionary step as Singapore's financial system remained stable and sound during the global financial crisis, reflecting its strong fundamentals.

In light of improving financial market conditions, Singapore's financial system is not expected to be materially affected when the hitherto unused Government guarantee on non-bank deposits expires on 31 December 2010.

2. What happens after the guarantee expires? Are depositors still protected?

The expiry of the guarantee will not affect the operation of Singapore's deposit insurance scheme. Small depositors will continue to be protected under the scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC).

Consumers should always exercise discretion in their choice of financial institutions, and products and services, whether or not there are explicit protection schemes."


Amount insured under the Deposit Insurance Scheme Singapore (source from SDIC) :

"In the event a Scheme member fails, all of your eligible accounts with that member, except for deposits under the CPF Investment Scheme, are aggregated and insured up to S$20,000, net of your liabilities to the member, such as loans.

Deposits are not insured separately in each branch office of a Scheme member i.e. all your eligible accounts maintained with different branches of a Scheme member are aggregated and insured up to S$20,000 net of your liabilities to the member.

Moneys held in bank deposits under the CPF Investment Scheme (CPFIS) are separately insured up to S$20,000."

The Team

Singapore Savings Account Rates.

Deposit Insurance Scheme Coverage To Be Raised

Deposit Insurance Scheme Coverage To Be Raised

According to MAS announcement of 3 September 2010, the deposit insurance scheme coverage to be raised for individuals from a limit of $20000 to $50000, likely by the year 2011.

The deposit insurance scheme scope of coverage will also expand to include non-bank depositors like sole proprietorships and partnerships.

Currently, 100% of an individual's bank deposits, like money kept in savings accounts and fixed deposits, are guaranteed by Government and insured against a bank going bankrupt. However this insurance coverage will expire at the end of 2010.

The new enhanced scheme will protect the majority of small depositors with $50000 or less.


Detailed Monetary Authority of Singapore response is quoted below:

Singapore, 3 September 2010

The Monetary Authority of Singapore (MAS) has issued our responses to feedback received from the public consultation on the proposed enhancements to the Deposit Insurance (DI) Scheme in Singapore, which was published on 25 February 2010.

2 MAS had proposed enhancements to the Scheme to enhance protection for depositors. We received useful feedback from consumers and the industry. After careful consideration, we have decided to proceed with the proposals to expand the scope of coverage to insure deposits of other non-bank depositors such as sole proprietorships and partnerships, and to raise the DI coverage limit from S$20,000 to S$50,000 per depositor per Scheme member.

With these changes, 91% of depositors under the Scheme will be fully insured. This meets our objective of providing adequate coverage for small depositors, while preserving the incentives for large depositors to exercise market discipline, and keeping costs to Scheme members manageable.

3 MAS intends to consult on proposed legislative amendments in the later part of this year, with a view to implementing the revised Scheme in early 2011.

4 The current study formed part of MAS’ regular review with the Singapore Deposit Insurance Corporation , to ensure that the Scheme which was first implemented in 2006, continues to be relevant. The Scheme is independent of the Government guarantee on deposits which expires on 31 December 2010.

The Team

Singapore Savings Account Rates.

Singapore Guarantees All Savings, Fixed, Current, SRS, Bank Account Deposits

Singapore Guarantees All Savings, Fixed, Current, SRS, Bank Account Deposits

The Government of Singapore has announced that it will guarantee all Singapore dollar and foreign currency deposits of individual and non-bank customers in banks, finance companies and merchant banks licensed by the Monetary Authority of Singapore (MAS).

This guarantee will run from now until 31 December 2010, according to the MAS and the Ministry of Finance.

It will be backed by $150 billion worth of Government reserves.

Other countries that have such government guarantees are:

• Australia
• New Zealand
• some European nations
• Hong Kong
• Malaysia

Guaranteed deposits are:

• Savings accounts
• fixed deposits accounts
• current accounts
• bank accounts under the Supplementary Retirement Scheme (SRS)

Unprotected deposit accounts are:

• structured products
• any deposit that is pledged, charged or secured as collateral

source: MAS and MOF Joint Statement

Singapore Savings Account Depositors Protected

Singapore Savings Account Depositors Protected

In The Straits Times published 23 September 2008, Ms Angelina Fernandez, Director (Communications) of the Monetary Authority of Singapore (MAS) assured Singapore savings account depositors that their savings in their Singapore savings accounts are protected.

Here is a quote from the MAS letter for Singapore Savings Account Rates readers:

"Under the deposit insurance scheme, administered by the Singapore Deposit Insurance Corporation (SDIC), an individual's Singapore dollar current, savings and fixed deposit accounts with a full bank or finance company in Singapore have an aggregate coverage of up to $20,000 per institution. This coverage fully insures more than 80 per cent of individual depositors in Singapore and is within international norms of 80 to 90 per cent."

Does this mean your $20000 in a Singapore savings account is totally safe? How about the robustness of the Singapore Deposit Insurance Corporation (SDIC) which is also an insurance company? Given that even a huge insurance company like AIG has also buckled under financial strain, how is a depositor to know if this SDIC will not buckle?

You may want to refer to SDIC at their website for details on their structure and board members for some reassurance. The Singapore Deposit Insurance Corporation (SDIC) administers the Deposit Insurance Scheme in Singapore. It has a 6-member board and they are accountable to the Minister in charge of MAS. SDIC collects premiums from participating banks annually to maintain a fund that will be used to compensate depositors if required.

Read more at SDIC site.

More information at Monetary Authority of Singapore (MAS).

Thank you for reading Singapore Savings Account Rates.

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.

Deposit Insurance Scheme, Singapore Launch

Deposit Insurance Scheme, Singapore Launch

Source: Monetary Authority Of Singapore

On 28 March 2006, the Monetary Authority of Singapore (MAS) and the Singapore Deposit Insurance Corporation (SDIC) announced that the deposit insurance scheme will commence on 1 April 2006. This follows the enactment of the Deposit Insurance Act in 2005.

2. From 1 April, the deposit insurance scheme will compensate individuals and charities for the first $20,000 of their Singapore dollar deposits in standard savings, current and fixed deposit accounts, net of liabilities, in the event that their bank or finance company fails.

3. The scheme compensates depositors through a fund built up from contributions by full banks and finance companies. Full banks and finance companies will pay their first premium contributions into the fund on 3 April 2006.

4. SDIC, a separate entity incorporated as a company limited by guarantee under the Companies Act, will administer the deposit insurance scheme and manage the deposit insurance fund.

5. SDIC Chief Executive Officer, Ooi Sin Teik, said: "The deposit insurance scheme is designed to safeguard the savings of small depositors. The scheme represents another layer of protection to complement the role of prudent bank management and MAS supervision."

"Although Singapore is well respected for the stability and robustness of its financial sector, experience elsewhere has shown that having an explicit guarantee in place will provide certainty and confidence to depositors."

Mr Ooi added that the SDIC is in the process of publishing a consumer guide on deposit insurance to be distributed through bank branches. It is also setting up a website to inform and educate the public on the scheme.