Deposit Protection at 100 Million Won — What Changes When Splitting Deposits Across Banks
The deposit protection limit should now be understood as 100 million won. If you still calculate based on the old 50 million won limit, you may misunderstand the actual scope of protection and split money across banks more finely than necessary. The core principle, however, remains the same. The limit is calculated as “per person, per financial institution, including principal and interest combined.”
| Section | Key summary |
|---|---|
| Introduction | The deposit protection limit should now be understood as 100 million won |
| How exactly does deposit protection of 100 million won work? | Practical method in brief |
| Products that are protected and products that are not | Not every product is protected just because it carries a bank’s name |
| Why still split deposits across banks? | Even though the limit has risen to 100 million won, diversified deposits are still necessary |
| Savings bank deposits also require checking both the limit and interest | Quick checklist |
| Diversification is the beginning, not the end, of deposit protection | Splitting deposits according to the deposit protection limit is the most basic safety measure |
How exactly does deposit protection of 100 million won work?
Under the Korea Deposit Insurance Corporation system, the protection limit is calculated separately for each financial institution. If the combined principal and interest at Bank A is within 100 million won, it falls within the protected range. But if you place 150 million won at the same bank, the excess 50 million won may fall outside the protection limit. The important point is that the 100 million won mentioned here includes not only principal but also agreed interest.
In practice, therefore, it is safer to leave some room by considering expected interest rather than setting the principal exactly at 100 million won. For example, for a 1-year time deposit, you would calculate the interest rate and pre-tax interest, then adjust the principal so that principal plus interest does not exceed 100 million won at maturity.
Products that are protected and products that are not
Not every product is protected just because it carries a bank’s name. Products eligible for deposit protection, such as time deposits, ordinary deposits, and installment savings, are different in nature from investment products such as funds, stocks, and ELS. Even if you sign up through the same branch counter, investment products that can lose principal may not be covered by deposit protection.
- Examples of protected products: deposit products eligible for deposit protection, such as ordinary deposits, time deposits, and installment savings
- Examples of non-protected products: products with risk of principal loss, such as funds, stocks, ELS, bond-type investment products, and subordinated bonds
- Note: Saemaul Geumgo, credit cooperatives, and local agricultural cooperative unit branches may have different protection structures through their federations or internal fund systems, rather than the Korea Deposit Insurance Corporation
- Post office deposits have a separate structure in which the government is responsible for payment, so they should be viewed differently from the general Korea Deposit Insurance Corporation protection limit
Why still split deposits across banks?
Even though the limit has risen to 100 million won, diversified deposits are still necessary. If you keep 200 million won at one bank, only up to 100 million won is protected. But if you split it into no more than 100 million won each at Bank A and Bank B, the limit applies separately at each financial institution. Even for the same amount of money, the protected range changes depending on which financial institutions you use and how you divide the funds.
- Deposit 100 million won at Bank A only → protected up to 100 million won, including principal and interest
- Deposit 150 million won at Bank A only → the excess 50 million won may fall outside the protection limit
- Split 200 million won into no more than 100 million won at Bank A plus no more than 100 million won at Bank B → the limit applies separately for each financial institution
- However, because interest is also included, the actual principal can be set with room for expected interest, such as 95 million to 98 million won
Savings bank deposits also require checking both the limit and interest
Savings bank deposits are protected within the limit if they are eligible deposit-protection products. However, because their interest rates are often higher than those of commercial banks, maturity interest can accumulate quickly. Since the protection limit is 100 million won including principal and interest, it is safer to set a slightly lower principal for higher-rate products.
Diversification is the beginning, not the end, of deposit protection
Splitting deposits according to the deposit protection limit is the most basic safety measure. For money that must never be lost, such as emergency funds, first check whether the product is protected and whether the amount falls within the limit for each financial institution. Funds beyond that are better considered separately in accounts with different purposes, such as investment products, ISAs, and pension accounts.
In short, today’s deposit protection should be understood as 100 million won per person, per financial institution, including principal and interest combined. However, you also need to check whether the product is protected, whether balances are combined under the same financial institution, and whether the total exceeds the limit once interest is added. This article provides general financial information and is not a recommendation to subscribe to any specific product, so before making an actual deposit, check the guidance from the Korea Deposit Insurance Corporation and your financial institution.