What is the deposit insurance payout limit?

Specifically, Article 24 of the Law on Deposit Insurance stipulates that the deposit insurance payment limit is the maximum amount that the deposit insurance organization will pay for all insured deposits of a person at an organization participating in deposit insurance when the obligation to pay insurance arises.

The insurance payment limit is prescribed by the Prime Minister upon the proposal of the State Bank of Vietnam in each period. According to this regulation, in case the total deposit balance of a depositor at an organization participating in deposit insurance is greater than the insurance payment limit, when the obligation to pay insurance money arises, the amount of money that Vietnam Deposit Insurance will pay for all insured deposits of that person (including principal and interest) will be equal to the maximum insurance payment limit.

Currently, according to Decision No. 32/2021/QD-TTg dated October 20, 2021 of the Prime Minister, the maximum amount that the deposit insurance organization pays for all insured deposits under the provisions of the Law on Deposit Insurance (including principal and interest) of a person at an organization participating in deposit insurance when the obligation to pay insurance arises is 125 million VND.

Illustration: Lawnet.

Will the full deposit be paid?

According to Article 188 of the Law on Credit Institutions 2024, which officially took effect from July 1, after the bankruptcy plan is approved, the State Bank will submit to the Prime Minister for decision the deposit insurance payment limit for depositors, up to the amount of deposits of insured individuals at the credit institution.

Thus, according to the provisions of the Law on Credit Institutions 2024, in addition to the insurance payment limit of 125 million VND implemented according to the Prime Minister's Decision, in each specific case, the State Bank can submit to the Prime Minister a decision to pay the entire amount to the depositor.

The role of deposit insurance

Deposit insurance is a "shield" that protects your money when you deposit it in a bank. Suppose the bank where you deposit your money has difficulties and is unable to pay you back, the insurance will stand up to compensate part or all of that amount.

To be eligible for deposit insurance, you need to ensure that your deposit is in Vietnamese Dong and is made at a bank participating in the deposit insurance program (currently, most domestic credit institutions have deposit insurance). Deposits such as term deposits, non-term deposits, savings, and certificates of deposit are all insured.

However, not all deposits are insured. Foreign currency deposits or institutional deposits are usually not insured. The time it takes to receive compensation can also vary depending on the case.

Hao Nhien (synthesis)

Source: https://vtcnews.vn/han-muc-tra-tien-bao-hiem-tien-gui-la-gi-ar905676.html