Everything About the Change in Insurance Coverage on All Bank Deposits in Singapore Simplified for You

Insurance coverage on bank deposits in Singapore just increased.

Here’s everything about it, simplified for you.

Insurance Coverage on All Bank Deposits in Singapore Raised to $100,000 Per Depositor

On Friday (22 September), the Monetary Authority of Singapore (MAS) announced a piece of good news—insurance coverage on all bank deposits in Singapore will be raised to $100,000 per depositor.

Huh? Insurance coverage simi? I don’t want to buy insurance leh.

Fret not. We’re not asking you to buy insurance, nor are banks or MAS. In fact, you don’t even have to pay for this insurance coverage—it comes automatically with your bank deposits.

Gong simi?

If you don’t know what this deposit insurance is, it’s okay. Goody Feed’s here to explain it to you.

TLDR: When you deposit money in a full bank or finance company, your deposits are protected under the MAS deposit insurance (DI) scheme.

This means that even if the bank becomes insolvent, or in simple terms, when the banks bo lui, you, as a depositor, can still get your deposit back—but only up to $100,000 of your deposits, as covered under the DI scheme.

So, great news for those with $100,000 in your bank accounts. But for the rest of us with $10 in our bank accounts, anything goes, I guess.

Currently, the insurance coverage on bank deposits is set at $75,000—an increase from the $50,000 coverage in the past. Now, with effect from 1 April next year, the insurance coverage on these bank deposits will be raised to $100,000.

Rationale Behind Increase in Insurance Coverage on Bank Deposits

But why did MAS suddenly decide to raise the insurance coverage on bank deposits? Jiak pa bo sai pang meh?

As it turns out, when the insurance coverage on bank deposits was first adjusted in 2019 from $50,000 to the current limit of $75,000, 91% of depositors found themselves protected under this scheme—great news.

However, since then, this percentage has dropped to 89%. You know what that means?

That means more Singaporeans are screaming “Heng, ong, huat!“, becoming more affluent, and depositing more money.

Good for them. Must be because of Tharman’s pineapple.

To take into account this rising affluence, the deposit limit has to be raised accordingly to ensure depositors are fully insured.

As a result, on 27 June, MAS issued a consultation paper to raise the deposit insurance limit to $100,000—a total of 20 respondents, including RHB Group and Maybank, gave their feedback.

While a few respondents suggested having a higher deposit insurance limit, MAS decided to stick with the limit of $100,000, sharing that each increase had to be considered carefully.

With the increase of the insurance coverage on bank deposits to $100,000, the percentage of fully insured depositors will be raised back to 91% again.

“As our DI Scheme aims to protect small depositors, its adequacy as a safety net can be assessed by looking at the proportion of depositors who are fully insured,” MAS added.

I guess the rest of us average Singaporeans can rejoice in the fact that if the banks we deposit our money in ever go insolvent, we can get our $17 cai png money back.