What Is a Deposit?

What exactly is a deposit?

Think of the money you've put in the bank for safekeeping, to increase your savings, or money you received via cheques—all of these qualify as deposits. Whenever you perform a funds transfer that moves money into your bank account, you’re enacting a deposit payment.

It can also refer to money serving as collateral in a transaction, such as fixed deposits.

Types of common deposits

Demand deposit. As the name implies, you can withdraw money on demand with a demand deposit account. Some examples of demand deposits include savings, current and salary accounts.

Time deposit. A time deposit is money you’re putting in the bank to accrue interest. Your money may be locked away for a set period of time; this is the case for Fixed Deposit Accounts. There's also Recurring Deposit Accounts, where you agree to deposit a fixed sum for a set period at specific time intervals. Unlike demand deposit accounts, you cannot retrieve your money whenever you like. You can only withdraw your money at the end of your fixed deposit or time deposit’s tenure. 

How does a deposit work?

When you bank your money, you’re entering an agreement whereby the bank promises to safeguard this money and pay it to you when you need it. The deposit is your asset and any amount you save is an amount the bank owes to you—that’s why the bank pays interest on your deposits.

Are my deposits safe?

Deposits belonging to individuals and non-bank depositors are automatically covered under the Singapore Deposit Insurance Corporation Limited’s (SDIC) Deposit Insurance Scheme. This amount was raised from $75,000 to $100,000 in 2024.

Under the Monetary Authority of Singapore's (MAS) regulations, all full banks and financial institutions are required to be members of the Deposit Insurance Scheme. This means you don’t need to fill up any forms or pay any premiums to be covered under this scheme.

The scheme protects all Singapore-dollar deposits held at a full bank or finance company, in the event of a bank failure. This includes individuals who use personal banking for their deposits, like yourself.The SDIC’s Deposit Insurance Scheme covers the following types of deposits:

• A deposit held in a saving account

• A deposit held in a fixed deposit account

• A deposit held in a current account

• Monies placed under the CPF Investment Scheme and the CPF Retirement Sum Scheme

• Monies placed under the Supplementary Retirement Scheme

• Any other products prescribed by the Monetary Authority of Singapore

You can check if your financial institution is a Deposit Insurance Scheme member, by reviewing the Complete List of DI Members.

Are my deposits in foreign banks covered?

As mentioned, all major banks and financial institutions are mandated by law to be part of the Deposit Insurance Scheme. As such, this would include the overwhelming majority of foreign banks, such as:

• Bangkok Bank Public Company Limited

• Bank of America

• Bank of China Limited

• Bank of India

• BNP Paribas

• CIMB Bank Berhad

• JP Morgan Chase Bank

• Maybank Singapore

• Mizuho Bank

• MUFG Bank

• RHB Bank Berhad

• Sumitomo Mitsui Banking Corporation

What is not covered under the Deposit Insurance Scheme?

Not everything is covered by the Deposit Insurance Scheme. 

Since the aim of the Deposit Insurance Scheme is to protect core savings of small depositors, insuring investment or investment-like products would run counter to the scheme’s goals.

Some exclusions mentioned by SDIC are:

• Foreign currency deposits

• Structured deposits

• Investment products, such as unit trusts, shares and other securities

The SDIC’s explanation for excluding these products is that they are similar to investment products. Since the SDIC is meant to provide a safety net for those looking to stash their cash, investors who knowingly exchange higher risks for potentially higher rewards are understandably excluded.