Effective April 1, 2024, Singapore has increased the insurance coverage on Singapore-dollar-denominated deposits with retail banks and finance companies from S$75,000 to S$100,000. This move aims to bolster depositor confidence and ensure greater financial security.

1. Understanding the Deposit Insurance Scheme
The Deposit Insurance (DI) Scheme protects depositors by guaranteeing their deposits up to the new limit of S$100,000 in the event of a bank or finance company failure. All retail banks with a full banking license and finance companies are members of this scheme, which compensates depositors through the DI Fund managed by the Singapore Deposit Insurance Corporation (SDIC).

2. Rationale Behind the Increase
Since the last adjustment in April 2019, the volume of deposits held by DI Scheme members has grown. Only 89% of depositors were fully protected under the previous limit, so this increase restores full coverage for 91% of depositors, aligning with international standards.

3. Who and What Is Covered?
The DI Scheme covers individuals, sole proprietorships, associations, and societies. It includes savings and current accounts, fixed deposits, and funds under the Supplementary Retirement Scheme (SRS). For instance, if an individual has S$150,000 in total across different accounts in a failed bank, they will be reimbursed S$100,000, with the remaining S$50,000 being at risk if the bank lacks sufficient assets.

4. What Is Not Covered?
The DI Scheme excludes foreign currency deposits, structured deposits, and investment products like unit trusts and shares. Its primary goal is to protect small depositors, who typically do not hold such high-risk investment products.

5. Digital Banks Participation
Digital banks such as Trust Bank, GXS Bank, and MariBank are also members of the DI Scheme. Trust Bank already exceeds the new limit, with a maximum deposit protection of S$500,000. Meanwhile, MariBank has announced plans to raise its savings account deposit limit to S$100,000 and extend higher interest rates on savings for an additional three months.

This increase in deposit insurance coverage provides enhanced security for depositors, encouraging savings and financial stability in Singapore’s banking system.