In today’s unpredictable financial world, confidence and trust in our banking and insurance systems are more important than ever. Most of us work hard to earn and save money. But have you ever asked yourself, “What happens to my savings if my bank suddenly fails?” Or “Will my insurance payouts still come through if my insurer goes bankrupt?”
These are legitimate concerns. While financial institutions in Singapore are generally stable and well-regulated, there’s always a remote possibility of failure. That’s why the Singapore Deposit Insurance Corporation Limited (SDIC) exists — to give consumers peace of mind.
In this article, we’ll dive into what SDIC is, how it protects your money, the types of coverage it offers, and most importantly, why it matters for every Singaporean and resident who saves or invests through banks and insurance companies.
What is SDIC?
SDIC stands for Singapore Deposit Insurance Corporation Limited. It is a government-owned company that administers two major consumer protection schemes:
- Deposit Insurance (DI) Scheme
- Policy Owners’ Protection (PPF) Scheme
Established under the Deposit Insurance and Policy Owners’ Protection Schemes Act, SDIC’s core responsibility is to ensure that depositors and policyholders do not lose their protected deposits or guaranteed insurance benefits in the unlikely event that a bank or insurer fails.
Importantly, coverage under both schemes is automatic. Consumers do not need to apply, pay extra, or take any specific action to be covered. As long as your bank or insurer is a scheme member — and most licensed ones in Singapore are — you’re automatically protected.
1. How the Deposit Insurance (DI) Scheme Works
The DI scheme was introduced to safeguard depositors. It provides coverage of up to S$100,000 per depositor per Scheme member, based on aggregated insured deposits.
✅ What’s Covered:
- Savings accounts
- Fixed deposits
- Current accounts
- Monies in CPF Investment Scheme (CPFIS) and CPF Retirement Sum Scheme
- Supplementary Retirement Scheme (SRS) deposits
- Children’s Development Account, Edusave, and Post-Secondary Education Account balances
All these must be denominated in Singapore dollars (SGD) and placed with a Scheme member.
❌ What’s Not Covered:
- Foreign currency deposits
- Structured deposits or investment-linked products
- Unit trusts, stocks, ETFs
- Deposits with non-Scheme financial institutions
If a participating bank collapses, SDIC will step in to reimburse depositors up to S$100,000 within a reasonable timeframe — typically within seven working days. This ensures quick access to funds during a crisis, helping prevent panic and maintaining trust in the banking system.
2. How the Policy Owners’ Protection (PPF) Scheme Works
While the DI scheme covers bank deposits, the PPF scheme protects policyholders of life and general insurance.
It ensures that even if your insurance company becomes insolvent, your guaranteed benefits are still honored — either through transfer to another insurer or direct payout from SDIC.
✅ Life Insurance Coverage:
Covers guaranteed benefits from:
- Whole life insurance
- Term life insurance
- Endowment plans
- Annuities
Coverage Limits (per insured individual, per insurer):
- Up to S$500,000 for the total sum assured
- Up to S$100,000 for surrender or cash values of life policies
- Up to S$100,000 for annuity benefits (commuted value)
✅ General Insurance Coverage:
Fully covers policies such as:
- Motor insurance (third-party and own damage)
- Personal accident insurance
- Medical insurance (hospitalisation, outpatient treatments)
- Work injury compensation insurance
- Property insurance for homes
Note: General insurance policies used for personal (non-business) purposes are typically covered in full, without caps, unless otherwise stated.
Why Does SDIC Matter?
It’s easy to overlook SDIC — until you need it. But understanding its importance can help you make smarter, safer financial decisions.
1. Peace of Mind
The biggest benefit of SDIC is psychological. Knowing that your deposits and policies are protected even in a worst-case scenario provides security. This peace of mind encourages people to save, invest, and plan for the future without fear of losing everything due to unforeseen institutional failure.
2. Systemic Financial Stability
When financial institutions fail, panic can spread quickly. People may rush to withdraw funds or cancel policies. This kind of behavior, known as a “bank run,” can destabilize even healthy financial systems. SDIC acts as a buffer against this, preserving trust and confidence in Singapore’s financial infrastructure.
3. Automatic & Free
Unlike private insurance, SDIC protection doesn’t cost you anything. It’s funded by annual premiums paid by member banks and insurers. There’s no paperwork, no subscription process — it just works.
4. Better Financial Decisions
Understanding which financial products are SDIC-protected can influence where you place your savings or buy insurance. For example, you might prefer to place your emergency funds with a DI-covered bank rather than in non-covered products like foreign currency deposits.
A Real-World Scenario: Why This Protection Matters
Let’s say you’ve saved S$80,000 in your POSB savings account. Suddenly, due to an economic shock, the bank collapses. What happens next?
- Because POSB is a DI Scheme member, your S$80,000 is fully insured by SDIC.
- You do not need to file a claim.
- SDIC will work with MAS to reimburse your funds within seven working days.
Now, imagine you also bought a whole life insurance policy with S$200,000 sum assured and S$50,000 cash value from an SDIC-covered insurer. If that insurer goes bust:
- Your policy will either be transferred to another insurer, or
- SDIC will arrange for you to receive the guaranteed benefits, subject to the protection caps.
In both cases, your financial plans remain intact — no sleepless nights, no scrambling for legal help.
Who Are the Scheme Members?
Most major banks and insurers in Singapore are members of SDIC’s DI and PPF schemes. This includes:
- Banks: DBS, OCBC, UOB, Standard Chartered, Citibank, Maybank, etc.
- Insurers: Great Eastern, AIA, NTUC Income, Prudential, Manulife, and more.
You can view the full list of members on the official SDIC website.
Always check whether a financial institution is a Scheme member before depositing your money or buying a policy.
Common Misconceptions About SDIC
❌ “SDIC covers all my money, no matter how much I have.”
Not true. The cap is S$100,000 per depositor per bank, and it’s calculated after netting off liabilities you owe to the bank.
❌ “Investment products like stocks and unit trusts are protected.”
Nope. These are not insured by SDIC, even if bought through a bank.
❌ “Only local banks are protected.”
Incorrect. Both local and foreign banks licensed by MAS and participating in the scheme are included.
Key Takeaways
- SDIC protects up to S$100,000 per person per bank for Singapore dollar deposits.
- It also safeguards guaranteed benefits of life and general insurance policies.
- Coverage is automatic and free.
- Not all products are covered, so it’s important to understand the limitations.
SDIC strengthens public trust and ensures financial stability in Singapore.
Conclusion
We often assume the institutions we trust with our money are “too big to fail.” But history shows that even giants can stumble. The real question isn’t whether something will go wrong — it’s whether you’re protected if it does.
The Singapore Deposit Insurance Corporation quietly plays a crucial role in our financial lives. By understanding how it works, you can make better, safer choices for your savings and insurance needs.
So the next time you open a bank account, start a fixed deposit, or sign up for an insurance policy, take a moment to ask:
Is this covered by SDIC?
It’s a small question that could one day make a very big difference.
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