What does hike in insurance coverage on bank deposits to $100,000 mean for you?

With the recent increase in insurance coverage on Singapore-dollar-denominated deposits to S$100,000, it's crucial to grasp what this change entails for consumers. Here's a breakdown:

1. The Deposit Insurance Scheme:
- The scheme guarantees deposits up to S$100,000 per depositor in the event of a bank or finance company failure.
- Member institutions contribute premiums annually to the Deposit Insurance Fund, administered by the Singapore Deposit Insurance Corporation (SDIC).

2. Rationale for the Increase:
- With the growth in deposits, the increase restores the percentage of fully insured depositors to 91%, aligning with international norms.

3. Coverage Details:
- Individuals, sole proprietorships, associations, and societies are covered.
- Eligible deposits include savings/current accounts, fixed deposits, and Supplementary Retirement Scheme (SRS) funds.
- Joint account holders are each insured up to S$100,000.
- Monies under the Central Provident Fund (CPF) schemes are also covered.

4. Exclusions:
- Foreign currency deposits, structured deposits, and investment products like unit trusts and shares are not covered.

5. Digital Banks Inclusion:
- Trust Bank, GXS Bank, and MariBank are covered under the scheme, ensuring protection for their customers up to S$100,000.
- MariBank is increasing its maximum deposit limit and extending promotional interest rates.
- GXS Bank and Trust Bank have different strategies regarding deposit limits and interest rates:
GXS Bank is not raising the maximum deposit for the GXS Savings Account, which will remain at S$75,000 for now.

Trust Bank’s deposit limit has already exceeded S$100,000. The limit is currently set at S$500,000, one of the highest in the market, the digital bank said.

The bank added that customers can earn up to 3 per cent per annum on deposit balances up to S$500,000.

This includes a base rate of 1.5 per cent, a balance bonus rate of 0.5 per cent, and a special bonus rate of between 0.5 per cent and 1 per cent.