You will be able to tell which of your deposits are insured by SDIC and which carry the full risk of the institution holding them.
Say your aunt sold her flat last year and the sale proceeds, all S$300,000 of them, are sitting in one savings account while she decides what to do. She tells you it is the safest money she has, because it is in a bank. She is partly right. Some of that money is protected if the bank fails, and some of it is not, and she probably has no idea where the line falls.
This lesson is about that line. In lesson 1.1 you saw that your balance is a promise the bank makes to pay you back. Deposit insurance is a second promise, made by a different body, that covers part of the first one if the bank cannot keep it.
The Deposit Insurance Scheme is run by the Singapore Deposit Insurance Corporation, SDIC. Banks and finance companies that are members of the scheme pay into it. If a member fails, SDIC pays eligible depositors back up to a set limit, so they do not have to wait for the failed bank's assets to be sold off to see their money.
Three words in that description do most of the work. The deposits have to be eligible, which broadly means Singapore dollar money in savings, current and fixed deposit accounts. The institution has to be a member, and the list of members is published on the SDIC website, sdic.org.sg. And the limit applies per depositor per member. All your eligible deposits at one member are added together, and the cap applies to that total, not to each account separately.
You do not apply for this cover or pay for it. If your Singapore dollar savings account is with a member bank, it is insured automatically, up to the limit.
Plenty of money held through a bank is not a deposit, or is a kind of deposit the scheme leaves out. The common ones:
Foreign currency deposits, such as a US dollar or Australian dollar account, even at a member bank Structured deposits, where the return is linked to something like an index or an exchange rate Investments bought through the bank, such as unit trusts, shares, bonds and investment-linked policies Balances held outside a member bank, such as an e-wallet or cash parked in a fund through a robo-adviser or brokerage app
None of these is unsafe because it is uninsured. A unit trust carries market risk whether or not a bank sold it to you, and the deposit scheme was never meant to cover that. The danger is believing something is insured when it is not. A cash management account inside an investing app can look like a savings account on your phone, with a balance and a daily rate, while actually being a fund. Read the product page and check what the money is invested in.
The insured limit is set by SDIC and has been raised before, so any figure you learn today may be out of date by the time you need it. The current limit, the member list and the full rules on eligible deposits are all on sdic.org.sg. When a decision depends on the number, check it there on the day.
One more thing to check on the member list: some bank brands belong to the same member. Two accounts with different names on the cards can count as one institution for the limit, so match each account to the member, not to the logo.
Because the limit is per depositor per member, the way to keep more money insured is to hold it across more than one member. Go back to your aunt. With all S$300,000 at one member bank, at most one limit's worth is insured, whatever that limit is today. If she splits the money across three members, up to three limits' worth is insured, and if each portion sits under the limit, all of it is.
This is a useful habit for large sums: sale proceeds from a flat, an inheritance, money saved for a home downpayment. For most people's everyday balances, the limit is not reached and spreading adds admin for no gain. The point is to know where you stand, not to open accounts for the sake of it.
Insurance also changes nothing about how a healthy bank treats you. It matters only in the rare case that a member fails. But that case is exactly when you would want to know the answer already.
In lesson 1.1 you listed every place you hold cash. That list now has a new question attached to each line. For each one, check the SDIC member list, then look at what kind of money it is: Singapore dollar deposit, foreign currency, structured product, investment or something outside a bank. Some lines will be clear at once. A few may take a look at the product terms before you can say which side of the line they sit on.
Check each account from lesson 1.1 against the SDIC member list and mark it insured, partly insured or not insured.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).