Expiry of Government Guarantee on Deposits

On 16 October 2008, the Singapore Government announced that it would guarantee all Singapore Dollar and foreign currency deposits of individuals and non-bank customers in banks, finance companies and merchant banks until 31 December 2010.

1. Why is the Government guarantee not extended beyond 31 December 2010? What is the impact?

The Government guarantee was an extraordinary measure in response to blanket guarantees by other jurisdictions in the region, to ensure a level international playing field for financial institutions in Singapore. It was a precautionary step as Singapore's financial system remained stable and sound during the global financial crisis, reflecting its strong fundamentals.

In light of improving financial market conditions, Singapore's financial system is not expected to be materially affected when the hitherto unused Government guarantee on non-bank deposits expires on 31 December 2010.

2. What happens after the guarantee expires? Are depositors still protected?

The expiry of the guarantee will not affect the operation of Singapore's deposit insurance scheme. Small depositors will continue to be protected under the scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Please refer to the following websites for more information on deposit insurance and measures to enhance the scheme.
https://www.sdic.org.sg/
http://www.mas.gov.sg/news_room/press_releases/2010/Feedback_On_Proposed_Enhancements_to_Deposit_Insurance_Scheme.html

Consumers should always exercise discretion in their choice of financial institutions, and products and services, whether or not there are explicit protection schemes. MoneySENSE, a national financial education programme, was launched in 2003 to provide consumers with knowledge and skills to enable them to make informed financial decisions. You may wish to visit the MoneySENSE website at http://www.moneysense.gov.sg for more information.