50k Deposit Insurance

[greenarrow_23]

Do you guys strictly put 50k in each account even if the other accounts will pay out lower interest rate as you can only credit salary into one account?

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[Bedokian]

It all depends on one's risk appetite and the possibility of happening - higher returns vs bank collapse.

 

[greenarrow_23]

Just wondering how most people handle this trade-off here

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[cherryboom]

I just put 50k in DBS and whatever balance put in other bank until 50k max out then repeat.

 

[JK1688]

Ocbc is 60k mah.

Good interest rate too, if fulfil all criteria

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[greenarrow_23]

Ocbc is 60k mah.

Good interest rate too, if fulfil all criteria

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The deposit insurance is up to 50k for every bank.

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[JK1688]

The deposit insurance is up to 50k for every bank.

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sorry! I tot account!

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[havetheveryfun]

if any of the banks collapse, ur money will become worthless anyway. unless u change them into other forms of assets such as gold or property, but then you wouldn't need to worry about the banks collapsing anymore.

Lee Kuan Yew once said that the amount in your bank is just a figure. It can become a worthless figure overnight

 

[qhong61]

I just put 50k in DBS and whatever balance put in other bank until 50k max out then repeat.

Same too. Dont mind if lower interest. Dont want a repeat of Lehman Brothers.

 

[henrylbh]

Just remember that SDIC is a private limited company. Its resources are limited, unless the government willing to stand as guarantor, explicitly.

 

[qhong61]

Just remember that SDIC is a private limited company. Its resources are limited, unless the government willing to stand as guarantor, explicitly.

So what does that mean?

 

[fireantz]

what happen if I have 2 accounts in a single bank? 50k per account or sum?

 

[Trazora]

sorry! I tot account!

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What I read from the Deposit Insurance Scheme guide is $50,000 per depositor (regardless of number of accounts), per DI scheme member (bank/finance companies). In addition, your deposits under the CPFIS and CPFMS accounts are separately insured for up to a combined total of $50,000.

 

[Trazora]

what happen if I have 2 accounts in a single bank? 50k per account or sum?

50k regardless of number of accounts with the single bank.

 

[Perisher]

http://www.todayonline.com/business/mas-proposes-increasing-deposit-insurance-coverage-s75000

Aug 4, 2017

The Monetary Authority of Singapore (MAS) on Friday (Aug 4) released a public consultation on its proposals to enhance the Deposit Insurance Scheme, which insures Singapore dollar deposits held at a full bank or finance company in Singapore.

A key proposal is to increase deposit insurance coverage from the current S$50,000 to S$75,000 per depositor. The deposit insurance coverage limit was last raised from S$20,000 to S$50,000 in 2011, which, at the time, fully covered more than 90 per cent of insured depositors.

Since then, with the growth in deposit base, the percentage of fully covered insured depositors has fallen to 87 per cent. The proposed coverage limit of S$75,000 will restore the percentage of fully insured depositors to above 90 per cent, in line with international norms, the MAS said.

Mr Anurag Mathur, head of retail banking and wealth management, HSBC Bank Singapore, said: “The proposed MAS changes to the Deposit Insurance Scheme are timely as they reflect the growing affluence in this region. We believe this move will further lend confidence to Singapore’s financial system and the banks operating here as it will offer greater protection to depositors.”

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In 2006, MAS announced the establishment of the Singapore Deposit Insurance Corporation (SDIC) to administer the deposit insurance scheme and manage the deposit insurance fund. This followed the enactment of the Deposit Insurance Act in 2005.

The deposit insurance scheme will provide compensation to individuals and charities for the first S$20,000 of their Singapore dollar deposits, net of liabilities, in the event that their bank or finance company fails. The scheme compensates depositors through a fund built up from contributions by full banks and finance companies. SDIC conducts public education on the deposit insurance scheme and issues rules on the operational aspects of the scheme.

A Deposit Insurance Fund was established from premium contributions of deposit insurance scheme members for compensation to insured depositors in the event of a failure of a scheme member. The Deposit Insurance Fund is invested in safe and liquid assets such as securities issued by the Singapore Government or the MAS, deposits with the MAS, any debenture or debt security issued by Singapore Sukuk and other assets approved by the Finance Minister.

Deposit insurance scheme members pay annual premium contributions to the Deposit Insurance Fund. The premiums levied on member institutions are differentiated according to the risk they pose to the Deposit Insurance Fund. These risk-based premiums are charged to member institutions as a percentage of the amount of insured deposits they hold, subject to a minimum annual premium of S$2,500.

The MAS proposes to achieve the targeted Deposit Insurance Fund size of 30 basis points of total insured deposits in a progressive manner. The plan is to extend the build-up period of the Deposit Insurance Fund from 2020 to 2028, and to revise the annual premium rates levied on full banks and finance companies from 2.0-7.0 basis points to 2.5-8.0 basis points.

Interested parties can give their views and comments on the proposals contained in the consultation paper. The public consultation will end on Sept 4.

 

[BBCWatcher]

"The proposed coverage limit of S$75,000 will restore the percentage of fully insured depositors to above 90 per cent, in line with international norms, the MAS said."

First of all, I don't think MAS's statement is factually correct, unless "in line with international norms" is well stretched.

Second, when will Singapore and its government aspire to be better than "international norms"? How about leading the world on occasion? (Isn't Singapore supposed to be a world class financial center?)

I don't think aspirations of continuous mediocrity are meritorious.

Literally this statement means "We're less than average, so we want to be average." WTF?

 

[Perisher]

First of all, I don't think MAS's statement is factually correct, unless "in line with international norms" is well stretched.

Second, when will Singapore and its government aspire to be better than "international norms"? How about leading the world on occasion? (Isn't Singapore supposed to be a world class financial center?)

I don't think aspirations of continuous mediocrity are meritorious.

Literally this statement means "We're less than average, so we want to be average." WTF?

Not sure about factually correct, but if they can cover 90%, should be good enough.

Though, come to think of it, 90% of Sinkies has less than $75k in their savings...
Split around multiple banks should be ok, most of those Sinkies only have 1 or 2 account though, is worrying.

Found this definition of insured depositors.
Holders of Eligible Deposits that do not exceed the Maximum Coverage Level provided by a Deposit Insurance System.

 

[Perisher]

For joint account holders,

Where there are 2 or more insured depositors holding any insured deposit, each of those insured depositors is entitled, in respect of his share in the insured deposit as at the quantification date, to compensation from the DI Fund.

Source:https://sso.agc.gov.sg/Act/DIPOPSA2...cDate=20121231&ViewType=Compare&ProvIds=pr23-.

 

[BBCWatcher]

Here are the deposit insurance limits for other developed countries:

* European Union (all countries) = 100,000 euro = ~S$162,400
* United Kingdom (EU member, rounded/adjusted to pounds) = GBP 85,000 = ~S$157,650
* United States(*) = US$250,000 = ~S$326,660
* Australia = AUD 250,000 = ~S$263,140
* Japan = JPY 10,000,000 = ~S$119,460
* Canada = CAD 100,000 = ~S$105,835
* New Zealand = zero
* South Korea(**) = KRW 50,000,000 = ~S$61,500
* Hong Kong = HKD 500,000 = ~S$83,600
* Taiwan = TWD 3,000,000 = ~S$135,180

Does S$75,000 look low to you? It sure does to me, unless we're competing with New Zealand.

(*) The U.S. deposit insurance limit is, in practice, higher through mechanisms such as CDARS. Also, states are allowed to offer their own supplementary deposit insurance. For example, Massachusetts offers unlimited deposit insurance for funds held with savings banks chartered in that state.

(**) The 50 million won limit is effectively doubled because it applies twice: once to retirement funds, and again to non-retirement funds, even at the same institution.

 

[pcmdan]

Me peasant don't have more than 75k in one bank..