Bank deposits in Singapore are insured up to 20,000 Singapore dollars (about $13,700). If a bank fails, the depositor still gets back 20,000 Singapore dollars. The Deposit Insurance Scheme run by the Singapore Deposit Insurance Corporation (SDIC) is for the benefit of small depositors. The SDIC website says:
In the event a Scheme member bank or finance company fails, all of your eligible accounts with that 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 are separately insured up to S$20,000.
The scheme covers only Singapore dollar savings accounts, fixed deposits and current accounts – and not foreign currency deposits, structured deposits and investment products like unit trusts.
The website gives examples of how the insured amount is calculated.
Deposit Insurance Scheme members include DBS, OCBC, UOB, Standard Chartered, HSBC, Citibank, ABN Amro, American Express, BNP Paribas, MayBank, State Bank of India, Indian Bank, Indian Overseas Bank , UcoBank and Tokyo-Mitsubishi among others.
SDIC collects premiums from the members of the scheme with which to compensate depositors if a bank fails. So it’s the banks which compensate the depositors, and not the government.
SDIC is not part of the government but a company limited by guarantee under the Companies Act and its board of directors is accountable to the minister in charge of the Monetary Authority of Singapore. It was set up following the Deposit Insurance Act 2005.
The SDIC website explains:
In the event a Scheme member… fails, the MAS will request the Singapore Deposit Insurance Corporation (SDIC) to step in. The SDIC will put its crisis plan into action. Affected depositors will be notified and arrangements will be made for depositors to be paid either by cheque or through accounts opened for them in another financial institution.
The SDIC will make the compensation from insurance premiums that Scheme members pay every year under the Deposit Insurance Scheme.
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