ST Explains: What does hike in insurance coverage on bank deposits to $100,000 mean for you?

SINGAPORE – From April 1, the insurance coverage on your Singapore-dollar denominated deposits with retail banks and finance companies will be raised to $100,000, from $75,000 previously,This means that in the event a bank or finance company fails, your money is protected up to an aggregate limit of $100,000 per depositor.You would have heard this before from your banker: “Your money with the bank is guaranteed up to $75,000.”This essentially is the Deposit Insurance Scheme.

SDIC said the premiums are charged to member institutions as a percentage of the amount of insured deposits they hold.According to MAS, annual premiums are between 2.5 basis points and 8 basis points of the insured deposit base. The amount of Singapore-dollar denominated deposits held with DI Scheme members has grown since the coverage limit was last raised in April 2019 to $75,000.

Singapore dollar deposits that are eligible for protection under the DI Scheme include savings and current accounts, fixed deposits and monies placed under the Supplementary Retirement Scheme .For example, an individual has $150,000 in aggregate with Bank A, which failed.As for joint accounts, each joint account holder’s share of the joint account is combined with other deposits held in his or her own name. The aggregate amount of deposits is insured up to $100,000.

For instance, a sole proprietor has $50,000 in his savings account and $80,000 in a business account. His combined total is $130,000. He will get back $100,000 and lose $30,000.The DI Scheme does not cover foreign currency deposits, structured deposits and investment products such as unit trusts and shares.

It will also extend the offer to raise the interest rates on its savings account to 2.88 per cent for another three months till June 30.

Source: Insurance Report (insurancereport.net)

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