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How Safe Is The Money In Your Bank Account

Pretty safe, we think

If you’ve ever wondered how safe the money in your Singapore bank account is, you should read on.

The short answer to this question is yes, your money is well protected. But contrary to what many people think, it is not assured by the Singapore Government, but by the Singapore Deposit Insurance Corporation (SDIC).

Why have a deposit insurance scheme?

The scheme was set up to protect Singapore against a bank run. It protects money in your saving accounts up to a maximum of $50,000 per account per bank.

A bank run is when ordinary people like you and I decide that we are going to queue up at the bank and start withdrawing our savings simply because we think that the money in our bank is no longer safe. It is extremely dangerous to any economy because as long as enough people think the same way and withdraw their money, even the most successful or safest bank will collapse.
That is because no bank in the world keeps everyone’s money in cash. Banks use our savings to give loans and invest out so that they can earn their billion dollars profit and justify their fat bonuses. However even as they do so, they are required to keep a fractional reserve for people who require withdrawals of their accounts.

What is the SDIC?

SDIC set up a scheme called the Deposit Insurance Scheme that protects Singapore denominated deposits up to $50,000 per bank. The scheme automatically covers us when we open a savings account, current account or fixed deposit account at full banks and finance companies in Singapore.

The SDIC also covers several other deposits such as monies in SRS (Singapore Retirement Scheme) accounts and deposits by sole-proprietors and partnerships. Take a look at SDIC’s FAQ page for more information.

How does the SDIC work?

Member institutions (the banks and finance companies) contribute to a fund. We’re not sure how much each institute pays, but it’s calculated based on how risky and large that institute is.

In the event an institution does collapse, the SDIC will pay out the sums insured to depositors in a prompt manner. SDIC does not guarantee that the financial institutions do not fall, but they guarantee that they will protect the savings of individuals who loses their money in the event of such a collapse.


From a layman point of view, SDIC is extremely safe and if this scheme does ever fail, we think it is safe to assume that the money will be the least of your concerns as there will be much bigger problems in the country to deal with.

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