Our savings in SG banks

[tyming]

Is all our cash deposit with SG local banks and SG foreign bank is guaranteed by the government?

[henrylbh]

Is all our cash deposit with SG local banks and SG foreign bank is guaranteed by the government?


Only you cpf money is guaranteed by government.

Anyway all our local banks are healthy. OCBC being the smallest have excess of assets over liabilities by more than S$10b. Foreign banks no idea of their state of affairs.

[tyming]

I thought the banks need to have a certain funds to guarantee all the deposits? like the insurance funds?

[Al-Jay]

not sure about local bank guaranteed. reason is because only 20k of our FD, savings is insured by SDIC.

many many years ago, i never heard of SDIC. the role is to insure us for 20k only and it covers about 80% of the depositor. if we want more cover like 50k, somehow the bank will pass the insurance premium to us.
my rationale is why this 20k insurance exit? well for a very good reason, i presume.

[henrylbh]

I thought the banks need to have a certain funds to guarantee all the deposits? like the insurance funds?

Yes but they are not guaranteed by the government. Who can guarantee the company that guarantee the bank depositors? Even your insurance funds are not guaranteed man.

[icyspawn]

The banks are supposed to maintain a certain percentage of it's monies in cash... apart from that, up to your first $20k is insured.

[Spirax]

The banks are supposed to maintain a certain percentage of it's monies in cash... apart from that, up to your first $20k is insured.
Yes if u have $680K, diversify 20K each for 34 banks.
http://www.sdic.org.sg/scheme_members.html

[Al-Jay]

google "what if a bank fails sdic", there is a business times report dated may or june 2008.

SDIC is setup recently for a purpose! MAS does not guarantee the local banks. If u are wise enough, u will know why!

[Al-Jay]

The banks are supposed to maintain a certain percentage of it's monies in cash... apart from that, up to your first $20k is insured.

Source: http://www.sdic.org.sg/overview.html
Singapore consumers enjoy the benefits of a sound banking system. Banks and finance companies licensed in Singapore are supervised by the Monetary Authority of Singapore (MAS). It is MAS’ aim to ensure the stability of the banking system in Singapore and to require financial institutions to have sound risk management systems and adequate internal controls.

However, MAS does not guarantee the soundness of individual financial institutions. Therefore, a Deposit Insurance Scheme has been set up to protect the core savings of small depositors in Singapore in the event a full bank or finance company fails.

Types of depositors covered
Individuals and the charities with insured deposits in full banks and finance companies in Singapore are insured by the SDIC. Business deposits by companies, partnerships and sole proprietors are not insured by the SDIC.

Types of deposit products covered
SDIC insures Singapore dollar denominated deposits including accrued interest, placed with a full bank or finance company in any of its branches in Singapore. These include deposits held in

Savings accounts
Fixed deposit accounts
Current accounts
Deposits under the CPF Investment Scheme
Each Scheme member maintains a register of insured deposits it offers. To find out if a deposit account offered by your bank or finance company is insured, you can refer to the institution’s register of insured deposits.

Types of deposit products not covered
The SDIC does not insure any financial product except those listed above. Products that are not insured include

foreign currency deposits
structured deposits
deposits placed as collateral
investment products such as unit trusts, shares and other securities

[Al-Jay]

I thought the banks need to have a certain funds to guarantee all the deposits? like the insurance funds?

Source: http://www.sdic.org.sg/faq.html
18. Why is deposit insurance necessary? I thought Singapore’s banking system is very safe?

A: Yes, Singapore’s banking system is safe and well regulated. The MAS has rules to ensure that banks and finance companies are well managed, well capitalised and have enough liquidity to meet any unforeseen needs.

Deposit insurance is just another layer of protection for small depositors. These are hard-earned savings and while the going is good, it is better to build up an insurance fund than wait for a crisis to happen. Experience elsewhere has shown that if you have a mechanism in place to guarantee the safety of deposits, people are less likely to panic if and when things go wrong.

[Al-Jay]

Deposit Insurance Act 2005
[Note that this link directs you to the Singapore Statutes OnLine website]

Singapore Deposit Insurance Corp’s CEO Ooi Sin Teik tells us why it took nine years after the Asian financial crisis for the Monetary Authority of Singapore to set up a deposit insurance scheme.

Wang Yi, The Asian Banker, August 23, 2006

Source: http://www.div.org.vn/EN/news_detail.asp?CatID=33&id=335

[undiscern]

20k is a small sum in present context. If all banks failed in sg, will sdic still work?

[Al-Jay]

yes. 20k nowadays not alot but SDIC says it covers 80% of depositors. i assume 20% has more than 20k. btw, these are insurances premium paid by banks. SDIC also replied in a straits times forum query that to increase the amount to higher amt, depositors would evetually have to foot the bill.

maybe we get lesser interest rate?

anyway, in year 2005 when it was introduced, i begin to wonder why it was introduced cos we do not ban chewing for the sake of banning chew gum. there must be a very good reason!

[Al-Jay]

i think SDIC is correct cos many years ago, when banks start charging 2 dollar for savings acct less than 500, lots and lots of people complain.

[Al-Jay]

it is probably the preto principle aka 80-20 rule, commonly use in managment. 80% profit comes from 20% of vital few, the other 80% is basically the trivial many making up of 20% of the profit.

some call it the law of nature.

[lasnoblur]

Sorry for the digging.

But can i ask SDIC only insure up to 20k for savings/FD for foreign banking?

The excess amount after 20k nt insured isit???

[Roborovskii]

Do also note that insured doesn't mean that you can get it back all at once, or at your demand.

[calvano]

if and when SG banks fail, may already be pre-apocalyptic phase or new world order... and paper money will be least of your concerns...

[MidnightLight]

Sorry for the digging.

But can i ask SDIC only insure up to 20k for savings/FD for foreign banking?

The excess amount after 20k nt insured isit???

The info is this thread is outdated. MAS announced earlier this year (or was it last year even?) that SDIC will now guarantee all savings deposits, including beyond $20k. However, this is only an interim measure in response to the financial crisis, so it is likely that the limit will be re-instituted eventually.