Deposit Insurance System

Deposit Insurance System
Taiwan's government has decided to provide full deposit insurance coverage regardless of the dollar amount of deposits until December 31, 2009. During the aforesaid period, the content relating to the scope and limit of coverage is not applied to this web page.
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. If an insured institution terminates its business or is unable to pay off its deposits, CDIC will compensate depositors up to NT$1.5 million limited to principal. 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
September 1985
Administered by
Central Deposit Insurance Corporation (CDIC)
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
Premiums
Paid by member institutions
Premium Rates
Risk-based rate system and five rates instituted:
For domestic banks, local branches of foreign banks and credit cooperatives, they are 0.03%, 0.04%, 0.05%, 0.06%, and 0.07% of covered deposits. Insured deposits in excess of maximum coverage applied to the flat rate of 0.0025%. From Jan. 1, 2010, the flat rate changes to 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 maximum coverage applied to the flat rate of 0.0025%.
Coverage
Apply automatically to all eligible deposits; depositors do not need to apply for deposit insurance.
Maximum Coverage
NT$1.5 million limited to deposit principal per depositor per insured institution
Types of Depositor Covered
All depositors including resident/ non-resident individuals and organizations
Insured Deposits
Checking accounts
Passbook 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
(The above-said deposits are restricted to those denominated in New Taiwan Dollars)
Uninsured Deposits
Deposits in foreign currency
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)
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. Currently, the maximum insurance coverage is set at NT$1.5 million limited to deposit principal.
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$1.5 million per depositor. Coverage does not include interest accruing to such deposits. A depositor can not get additional coverage over the NT$1.5 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$1.5 million. For example, if the depositor has placed deposits at two insured banks, coverage of up to NT$1.5 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$1.5 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 calculated together with the amount of their own personal accounts and coverage will be provided up to NT$1.5 million for each person.