Which types of deposits will not be insured?

Specifically, based on the provisions of Article 18 of the 2012 Deposit Insurance Law regarding insured deposits, the following applies:

Insured deposits

Insured deposits are deposits in Vietnamese Dong made by individuals at deposit insurance participating institutions in the form of time deposits, demand deposits, savings deposits, certificates of deposit, promissory notes, treasury bills, and other forms of deposits as prescribed by the Law on Credit Institutions, except for the types of deposits specified in Article 19 of this Law.

Uninsured deposits

- Deposits at credit institutions by individuals who own more than 5% of the charter capital of that credit institution.

- Deposits at credit institutions by individuals who are members of the Board of Members, Board of Directors, Supervisory Board, General Director (Director), or Deputy General Director (Deputy Director) of that credit institution; deposits at branches of foreign banks by individuals who are General Director (Director) or Deputy General Director (Deputy Director) of that foreign bank branch.

- Money used to purchase bearer securities issued by deposit insurance participating institutions.

Illustration photo:VIB .

Deposit insurance premium

Deposit insurance premiums are fees that credit institutions must pay to the deposit insurance fund to protect customer deposits. However, credit institutions usually do not collect this fee directly from customers, but instead include it in the interest earned on deposits.

According to regulations of the State Bank of Vietnam , deposit insurance premiums are calculated and paid quarterly during the fiscal year. Participating institutions must pay the premium before the 20th of the first month of the following quarter; late payments will not be accepted.

The fee is charged monthly, and the total amount is deducted from the deposit interest to contribute to the deposit insurance fund. Therefore, customers do not pay this insurance fee directly, but will receive a lower interest rate compared to uninsured deposits.

Paying out deposit insurance is a function of the Vietnam Deposit Insurance Fund. When a bank or credit institution goes bankrupt or is unable to repay customer deposits, the fund will pay out a sum of money to each customer.

In the event of an incident, customers can go to the bank where they registered their deposit to request benefits for their insured deposit. The verification and settlement process will be carried out by the Vietnam Deposit Insurance Fund.

To make these payments, the fund will recover assets from banks or credit institutions that are bankrupt or unable to repay deposits. If the amount recovered is insufficient to cover all customers, the fund will prioritize payments to customers with smaller deposits and lower incomes.

Deposit insurance is a financial mechanism that protects people's deposits at banks. If a bank experiences financial difficulties or goes bankrupt, deposit insurance ensures that depositors will be reimbursed part or all of their deposited funds, depending on the insurance limit. In Vietnam, the Vietnam Deposit Insurance Corporation (DIV) is the organization responsible for implementing this policy, ensuring the safety and protection of depositors' rights.

Compiled by Cong Hieu

Source: https://vtcnews.vn/loai-tien-gui-nao-se-khong-duoc-bao-hiem-ar905150.html