Good question. But it is also important to note that there is a cost to this insurance. Currently the premiums are paid by the member banks and it doesn’t impact depositors directly. But this is still a part of the banks’ operating expense ...
I frequent the BIGS World – Build Wealth, Live a Good Life Facebook group and came across a really great question.
Namely – Why is SDIC protection so low ($50,000 SGD) in Singapore? Especially compared to US banks which protects deposit up to $250,000 USD.
Singapore Deposit Insurance Corporation or SDIC is the government-chartered organization which oversees Singapore banks’ Deposit insurance program which protects bank deposits up to $50,000.
The US equivalent is the FDIC, which protects bank deposits up to $250,000 USD.
John Lam who used to work in the Balance Sheet and Liquidity Management team of an American Bank gave this great answer which I had to share: