What is deposit insurance?
Financial institutions duly approved under the law to accept deposits are required to take part in deposit insurance provided by the Central Deposit Insurance Corporation (CDIC) and to pay premiums therefor. Beginning from January 1, 2011, if an insured institution terminates its business or is unable to pay off its deposits, CDIC compensates depositors up to NT$ 3 million,including principal and interest. This system is designed to ensure the rights of depositors and maintain the stability of the financial system.
Fact Sheet on Taiwan Deposit Insurance System
| Launched |
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| Administered by |
- Central Deposit Insurance Corporation (CDIC)
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| Participating Institutions |
- Domestic Banks (including the postal savings bank)
- Credit cooperatives
- Credit departments of farmers' and fishermen's associations
- Foreign bank branches in Taiwan (Foreign bank branches whose deposits are protected in their home countries may not participate.)
- Agricultural Bank of Taiwan
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| Premiums |
- Paid by member institutions
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| Premium Rates |
- Risk-based premium system and five-tiered rates instituted, effective from January 1, 2011 :
- For domestic banks and local branches of foreign banks, they are 0.05%, 0.06%, 0.08%, 0.11%, and 0.15% of covered deposits. Insured deposits in excess of coverage limit applied to the flat rate of 0.005%.
- For credit cooperatives, they are 0.04%, 0.05%, 0.07%, 0.10%, and 0.14% of covered deposits. Insured deposits in excess of coverage limit applied to the flat rate of 0.005%.
- For credit departments of farmers and fishermen's associations, they are 0.02%, 0.03%, 0.04%, 0.05%, and 0.06% of covered deposits. Insured deposits in excess of coverage limit applied to the flat rate of 0.0025%.
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| Coverage |
- Apply automatically to all eligible deposits ; depositors do not need to apply for deposit insurance.
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| Maximum Coverage |
- NT$3 million, including principal and interest of deposit in New Taiwan Dollar or non-New Taiwan Dollar per depositor per insured institution.
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| Types of Depositor Covered |
- All depositors including resident/ non-resident individuals and organizations
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| Insured Deposits |
Insured deposits include the following domestic deposits in Taiwan:
- Checking accounts
- Demand deposits
- Time deposits
- Deposits required by law to be deposited in certain financial institutions
- Other deposits which the Financial Supervisory Commission has approved as insurable
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| Uninsured Deposits |
- Negotiable certificates of deposit
- Deposits from government agencies
- Deposits from the Central Bank
- Deposits from banks, postal savings bank (Chunghwa Post Company), credit cooperatives, Agricultural Bank of Taiwan and credit departments of farmers' and fishermen's associations
- Deposit exceeding the per-institution maximum insurance coverage established for each depositor
- Other deposits which the Financial Supervisory Commission has approved as non-insurable (e.g. structured deposits)
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Ways of Applying for Deposit Insurance
All depository institutions must apply for deposit insurance by submitting the application form to CDIC, but the CDIC has the right of determination to approve or disapprove the membership.
Insurance Coverage
Pursuant to Article 13 of the Deposit Insurance Act, the maximum insurance coverage that the CDIC offers to each depositor of any insured institution shall be determined by the Financial Supervisory Commission in conjunction with the Ministry of Finance and the Central Bank. Beginning from January 1,2011, the maximum insurance coverage is set at NT$ 3 million.The new maximum coverage covers around 98.0% of the depositors and 47.2% of insured deposits.
Calculation of Maximum Coverage
(1) How is the per-institution maximum insurance coverage for each depositor calculated?
The maximum insured amount for all types of deposits at all branches of the same insured institution is NT$3 million per depositor. The coverage includes principal and interest accruing to such deposits. A depositor can not receive additional coverage over the NT$3 million limit by dividing his/her savings into separate accounts or branches within the same insured institution.
(2) If a person deposits money in two insured institutions and both institutions fail, how is the maximum insurance coverage calculated?
The maximum insurance coverage applies to the deposits for each depositor at the same insured institution. If a depositor deposits money at more than one insured institution, deposits at each of the institutions are covered up to the maximum of NT$3 million. For example, if the depositor has placed deposits at two insured banks, coverage of up to NT$ 3 million will be provided for each of the deposits at the two banks.
(3) If Mr. Smith, his wife and children open separate accounts in their own names at the same insured institution, and that institution fails, how is the maximum coverage amount for all of the family members calculated?
The maximum coverage offered by CDIC is based on the deposits of each individual depositor at each insured institution. In the example above, Mr. Smith, his wife and his children are considered as individual depositors and each can obtain the maximum coverage up to NT$3 million.
(4) How is the maximum coverage calculated on accounts opened jointly in the names of more than one depositor?
If a depositor opens a joint account with another person, the amounts entitled to each of the two parties are aggregated with the amount of their own personal accounts and coverage will be provided up to NT$3 million for each person.