Korea Raises Deposit Insurance Limit to ₩100 Million After 24 Years

Korea Raises Deposit Insurance Limit to ₩100 Million After 24 Years

South Korea has officially raised its deposit insurance protection limit from ₩50 million to ₩100 million (including principal and interest), marking the first adjustment in 24 years. On September 1, the Financial Services Commission (FSC) announced that Vice Chairman Kwon Dae-young visited Hana Bank’s headquarters in Seoul to inspect the implementation status on the first day of the new policy. This landmark change is aimed at strengthening financial consumer protection and restoring public trust in the financial sector.

💡 What Is the Deposit Insurance System?

The deposit insurance system ensures that if a bank or financial institution fails, depositors’ principal and interest are protected up to a legal limit. Since 2001, the limit had been ₩50 million, but as of September 2025, the ceiling has been raised to ₩100 million.

  • Applicable institutions: banks, savings banks, credit unions, and other insured financial companies
  • Coverage: principal + interest combined
  • Limit: ₩100 million per depositor, per financial institution

📌 Remarks from FSC Vice Chairman Kwon

During his on-site inspection, Vice Chairman Kwon Dae-young emphasized the importance of this change:

  • “As someone who dealt directly with the 2011 savings bank crisis, I know firsthand the importance of the deposit insurance system.”
  • “This long-awaited increase in the insurance limit is a significant milestone in strengthening public confidence and trust in financial institutions.”
  • “Financial companies must now play a greater role in productive finance, serving as key players in channeling capital to innovation and growth industries.”

🏦 Role of Financial Institutions and KDIC

Yoo Jae-hoon, President of the Korea Deposit Insurance Corporation (KDIC), thanked banks and financial institutions for reflecting the new limit in product brochures and passbooks. He also urged institutions to provide clear guidance to customers about the deposit protection system.

The FSC pledged to monitor the implementation closely, coordinate with the Financial Supervisory Service (FSS), and track fund movements to ensure financial stability during the transition.

🔍 Impact on Depositors

The new policy has significant implications for financial consumers:

  • Small depositors: little change in actual protection, but improved confidence in the system
  • Mid- to high-balance depositors: meaningful expansion of protection up to ₩100 million
  • Financial institutions: stronger ability to attract deposits and boost trust

Overall, the increase enhances stability for households, small business owners, and elderly depositors, while reinforcing the resilience of Korea’s financial system.

❓ FAQ

1. When did the ₩100 million deposit protection limit take effect?

The new limit took effect on September 1, 2025.

2. Is the ₩100 million limit per bank or total across all institutions?

It applies per depositor, per financial institution.

3. Are all financial products covered by deposit insurance?

No. Investment funds, insurance policies, and certain derivatives are excluded.

4. Does the limit include interest as well as principal?

Yes. Both principal and accrued interest are covered up to ₩100 million.

5. How will the FSC ensure financial stability during the transition?

The FSC and FSS will monitor fund movements and maintain close communication with financial institutions.

🚀 Conclusion

The increase in Korea’s deposit insurance limit to ₩100 million represents more than just a policy change—it marks a major step forward in financial consumer protection and the rebuilding of trust in the banking system. With greater assurance that their savings are protected, depositors can engage in financial activity with more confidence. Meanwhile, financial institutions are expected to leverage this trust to drive productive finance and support Korea’s innovation-driven growth.

👉 External Reference: Financial Services Commission Official Website

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