Everyone knows that in Singapore, your money in your banks are insured (Deposit Insurance Scheme) up to S$20,000 by Singapore Deposit Insurance Company (SDIC) in the event that the participating bank collapsed. Ok maybe not everyone know about this but I am sure only a small handful know that not all banks are covered under this insurance scheme...

Before you rush off to withdraw all your money from your bank, let me show you which are the banks that are covered under this scheme and how are your money actually insured.

The following banks are members under the Deposit Insurance Scheme:

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

So if you bank is one of the listed above then your money are insured, phew... but that is only 50% of the story. Now I will tell you the other 50% of the story so that you can really know just how your money in your bank is insured.

If you thought that as long as you have only $20k in the above listed bank, your money will safe and insured... Well I can tell you that you are wrong and this is one misconception which most Singaporean have regarding the Deposit Insurance Scheme. In fact what I going to share with you later in my post might make you realities that only a portion of all your money are insured in a bank.

Only money in the following area covered:

• Savings accounts (SA)
• Fixed deposits accounts (FD)
• Current accounts (CA)
• Investment under CPF Investment Scheme (CPFIS)

For SA, FD and CA your money are collectively insured up to $20k while for your CFPIS, your money here will be insured with a separate $20k. What this mean is that actually if you have money in both CPFIS and SA, CA and FD collectively you will be insured of up to $40k where $20k is for CFPIS and the other $20k is for your SA, CA and FD collectively.

So let quote an example to make it cleaer. Let say you have $10k in your SA, $10k and your FD and $10 in your CA and you have done some investment worth $10k under the CPFIS, you will actually be compensated a total of $30k in an event your bank collapse. How this $30k come about is as follows:

• $20k from the collectively amount under SA, CA and FD
• $10k from your investment in CPFIS

So if you were to ask me how to save your money to ensure that your money are insured under the Deposit Insurance Scheme well the answer is very simple. You can just save $19,500 (to allow interest growing) in one of the banks under the scheme while investing the rest of your money to make more money. Or if you are not the investment type then you can divide your money into 2 main groups (namely SA and FD) and open other a saving account and a fixed deposit account with one of the banks.  By doing so allow you to earn a slightly better interest rate return that just putting into a saving account while allow you to have some liquid cash flow. If your money in the group exceed $20k, then you will have to further divide each of the 2 main groups into smaller sub-groups and for each sub-group you will open an account with another bank. What this does is it allow you to enjoy the insurance coverage and allow more than $20k insured amount on your money.

You might also wish to take note that although the Deposit Insurance Scheme provide some insurance for the general public in Singapore, if you happen to have an outstanding loan, your deposits will be used to offset the loan amount first before paying to you. If you have a joint account, the amount of money (up to $20k) will be split between the account holders in the event the bank collapse. Also if you have a personal account and a joint account with a same bank, you will only be entitled up to a maxmium of $20k in a event the bank collapse.

So I have share with you the Deposit Insurance Scheme, the banks under this scheme, my advise on how to make full use of this scheme and the limitation of the scheme. Now it is your turn to see if you wish to take action or not.

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