Deposit Insurance

A type of insurance that protect funds on

deposit against failure of the institution.
 What is an insured deposit?
The term ‘insured deposit’ means
the amount due to any bona fide
depositor for legitimate deposits in
an insured bank net of any
obligation of the depositor to the
insured bank as of date of closure,
but not to exceed P500,000.00.
 R.A. No. 9576 stipulates that PDIC will not pay
deposit insurance for:
• Investment products such as bonds, securities
and trust accounts;
• Deposit accounts which are unfunded,
fictitious or fraudulent;
• Deposit products constituting or emanating
from unsafe and unsound banking practices;
• Deposits that are determined to be proceeds
of an unlawful activity as defined under the
Anti-Money Laundering Law.
 Are all banks member of PDIC?
Membership of banks to PDIC is mandatory
 Deposits covered by PDIC (includes)
• Foreign currency deposits are also insured by
PDIC pursuant to RA 6426 (“An act instituting
a foreign currency deposit system in the
Philippines, and for other purposes”) and
Central Bank (CB) Circular No. 1389.
Depositors may receive payment in the same
currency in which the insured deposit is
denominated.
 Other bank products (not covered by
PDIC)
• Mutual fund offered by the bank or other
securities
 What does it mean?
Deposit insurance is provided to the depositor
rather than to a deposit account
 Checking and Savings Accounts
• All depository institutions must clearly
disclose fees, interest rates and terms on both
accounts.
• Banks must use Annual Percentage Yield (APL)
Formula that takes compounding.
The law requires banks to pay interest on a
customer’s full daily or monthly average
deposit balance.
 Checking accounts (demand deposit)
• Account held at a financial institution from
which funds can be withdrawn on demand by
the account holder.
• Regular checking account – pays no interest
and offered only by commercial banks.
• Negotiable order of withdrawal (NOW)
accounts – checking accounts paying interest
 Money market deposit accounts
• Are offered at banks and other depository
institutions
• Are insured.
 Electronic Banking Services
• Electronic Funds Transfer Systems – allow
depositors to conduct a variety of different
types of bank transactions at any time by
using the latest telecommunications and
computer technology.
• Debit cards and automated teller machines –
uses specially-coded plastic cards called debit
cards, and uses personal identification
number (PIN) to access the account.
 Cont:
• Automated teller machines (ATMs) – are
remote computer terminals that customers of
a bank or other depository institution can use
to make deposits, withdrawals and other
transactions such as loan payments or
transfers between accounts – 24 hours a day ,
7 days a week.
 Sample Bank’s Atm charges

Withdrawal BALANCE
Fee INQUIRY FEE

• Allied Bank P 10.00 P 1.00

• Asia United Bank (AUB) 11.00 2.00
• Banco de Oro (BDO) Cash Card 11.00 2.00
• Philippine Islands (BPI) 15.00 1.50
• Chinabank Savings 10.00 1.00