Deposit Insurance (₩100 Million)

Deposit insurance is a national safety mechanism whereby, when a financial company goes bankrupt and can't return deposits, the Korea Deposit Insurance Corporation (KDIC) pays out up to a certain amount in its place.

The principle is the same as insurance. Financial companies pay premiums in normal times, and when one actually fails, that fund is used to return money to depositors.

Thanks to this, we can entrust deposits without worrying each time, 'What if this bank fails?' Because this system exists, trust in the entire financial system is maintained.

This is the most important change. Starting September 1, 2025, the deposit-insurance limit was raised from the previous ₩50 million to ₩100 million.

This ₩50 million limit had been maintained for a full 24 years since 2001, and this time it doubled.

To note a few key points:

First, the covered amount is up to ₩100 million combining 'principal + interest.'

Second, no separate application is needed. The new limit automatically applies even to deposits opened before September 1, 2025.

Third, the basis is 'per person, per financial company.' If you split ₩100 million at Bank A and ₩100 million at Bank B, each can be covered.

This is where people make the most mistakes. Not all financial products are covered.

Covered products: deposits and installment savings at banks and savings banks (principal and interest), and 'deposit-like' products such as an insurance policy's surrender value.

Uncovered products: performance-based products like funds (beneficiary certificates) and mutual funds, certificates of deposit (CDs), repurchase agreements (RPs), most CMAs (except the merchant-bank type), housing subscription savings, and so on.

The key criterion is this: if it's a 'principal-guaranteed deposit,' it's generally covered; if it's an 'investment product whose return varies with performance,' it's not covered.

In particular, remember that CDs and RPs are not covered by deposit insurance even though the word 'deposit' appears or they seem safe.

Using the fact that the limit is ₩100 million per person, per financial company, you can see ways to deposit large sums safely.

For example, if you want to deposit ₩200 million, rather than piling it all into one bank, splitting it into ₩100 million at each of two banks keeps the full amount within the coverage range.

There are also points to watch. Multiple branches of the same bank are treated as one financial company and combined, and for savings banks and the like you should scrutinize the risk of insolvency more.

And above all, this coverage applies only to 'deposits.' If a product you signed up for thinking it was a deposit—because it pays high interest—is actually an investment product, it may not be covered, so you need the habit of always checking 'whether it's covered by deposit insurance' before signing up.