Today’s spot light shines bright on SDIC, one of the lesser known safety nets provided to Singaporeans free of charge.
Singapore Deposit Insurance Corporation doesn’t take in deposits like a bank does, it doesn’t sell insurance like an insurer does, but it simply a company that guarantees deposits and insurances up to a certain degree. You can think of it like insurance protection for your deposits and insurances (that some 2nd degree association right there).
The low down on how it works (simplified version)
The money that you deposit into each bank is guaranteed up to 50k SGD per bank per individual person. Meaning if you place deposits in bank A, B, and C, if they all collapse and are unable to give you back your deposits, SDIC will step in and give you your deposits back (up to 50k per bank, nothing more). Makes you sleep better at night, we think so anyway.
Not all deposits are equal though. Money in savings accounts, fixed deposits, CPS Investment Scheme accounts, CPF Minumum Sum Scheme accounts , SRS accounts are all covered and claimable.
Not covered: Structured Deposits (a type of relatively risk free investment), foreign currency accounts, and investment products like unit trusts are not covered under this scheme.
The guaranteed sum assured amount as well as guaranteed surrender value amount per person per insurer is guaranteed up to 500k (for sum assured) and up to 100k (for surrender value). Meaning if you have insurance policies with insurers A,B, and C, if they all collapse and are unable to pay you your respective sum assured amounts, SDIC will once again be a hero and give you your dues (up to each respective cap). Even sounder sleep for all of us.
Unlike deposits, it seems that most policies (the common and popular ones anyway) are all covered under this scheme.
You name it: Term, Whole Life, Endowment, Annuities, A&H (accident and health) policies are all under the umbrella of protection of SDIC.
For an ever lasting cure to insomnia, here is the link to SDIC’s site which contains all the nitty gritty.
For those who are disinclined to read page upon page of monotonous information from SDIC, the most important take away for many of us is this:
SDIC is completely free of charge and automatically set in place for all Singaporeans. With it covering deposits and insurances, practically speaking, consumers need not concern themselves too much with the credit rating of each financial institution since there is an inherent safety net. What matters more is: Getting the most out of each deposit account and insurance plan you sign up with!
Do you have any insights on SDIC to share? We would love to hear from you in the comments below.
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