About KDIC

01Deposit Insurance Coverage

Korea provided protection of up to KRW 20 million per depositor (or KRW 50 million won for insurance policyholders) when the deposit insurance scheme was first introduced. However, in the wake of the 1997 Asian financial crisis, blanket guarantees were temporarily introduced in order to minimize the impact of the restructuring of the financial system and ensure the stability of financial transactions. In 2001, limited coverage was reinstated. Since January 1, 2001, the KDIC has insured up to KRW 50 million per depositor including principal and designated interest in case an insured financial institution goes bankrupt due to an insurance contingency (e.g. business suspension, license revocation).


Designated interest

The lesser of the agreed interest and the KDIC-determined interest (the interest rate the KDIC determines in consideration of the average interest rate of one-year term deposits of commercial banks)


For the remaining amount that is not KDIC-insured, depositors can recover all or part of that when they receive bankruptcy dividends from the bankruptcy estate. The bankruptcy estate pays bankruptcy dividends from remaining assets, if any, after repaying senior debts.

The coverage limit of KRW 50 million is the total amount that a depositor can receive per institution. It is not calculated per type of deposit or per branch. “Per depositor” means not only individuals, but also corporate entities. If a depositor of a failed financial institution has an outstanding debt to the institution, the debt will be deducted from the deposit (which is called a set-off) and the remaining amount will be protected.

02Insured Financial Institutions

Insured financial institutions include: banks, insurance companies (life insurers and non-life insurers), investment traders and brokers, merchant banks and mutual savings banks. On February 4, 2009, with the enactment of the Financial Investment Services and Capital Markets Act, asset management firms licensed under the said Act for investment brokerage and trading (excluding investment brokers engaged in electronic securities brokerage services as defined under Article 78 of the Financial Investment Services and Capital Markets Act) were included in coverage.

Local branches of foreign banks, the National Agricultural Cooperatives Federation (NongHyup) and the National Federation of Fisheries Cooperatives (SuHyup) are KDIC-insured. (However, local branches of NongHyup and SuHyup, the National Credit Unions’ Federation of Korea and the Community Credit Cooperatives are not KDIC-insured. They are protected by their own funds established under the relevant legislation.)

03Insured Financial Products

The following is a list of KDIC-insured financial products based on information supplied by financial institutions. It may therefore not be accurate or up to date.

List of Insured Financial Products & Non-insured Financial Products
Financial Sectors Insured Financial Products Uninsured Financial Products
Banks
  • Demand deposits (e.g. ordinary deposits, corporate deposits, temporary deposits, checking deposits)
  • Savings deposits (e.g. term deposits, time and savings deposits, housing subscription deposits, issued notes)
  • Installment deposits (e.g. installment savings deposits, installment savings for housing, mutual installment deposits)
  • Foreign currency deposits
  • Reserves in defined contribution retirement pension accounts or Individual Retirement Pension (IRP) accounts that are invested in KDIC-insured products
  • Financial products subject to deposit protection which are incorporated into individual savings accounts (ISAs)
  • Money trusts with principal guarantees
  • Certificates of Deposits (CD), Repurchase agreements (RP)
  • Financial investment products (e.g. beneficiary certificates, mutual funds, money market funds (MMF))
  • Real fiduciary accounts (e.g. specific money market trust)
  • Bank-issued bonds
  • Some types of housing subscription deposits
Investment Traders and Brokers
  • Money that remains in cash in customer accounts which has not been used to purchase securities, etc.
  • Cash balance from deposits for stock margin loans (proprietary), deposits for opening a margin account and deposits for margin loans
  • Reserves in defined contribution retirement pension accounts or Individual Retirement Pension (IRP) accounts that are invested in KDIC-insured products
  • Financial products subject to deposit protection which are incorporated into individual savings accounts (ISAs)
  • Money trusts with principal guarantees
  • Cash deposits with securities finance companies made under Article 330(1) of the Financial Investment Services and Capital Markets Act
  • Financial investment products (e.g. beneficiary certificates, mutual funds, MMF)
  • Subscription deposits, taxes withheld, deposits for futures and options trading, deposits for stock margin loans
  • Repurchase agreements (RP), bonds issued by securities companies
  • Cash Management Accounts (CMA), wrap accounts, Equity Linked Securities (ELS), Equity Linked Warrants (ELW), etc.
  • Deposits for gold transactions in kind, etc.
Insurance Companies
  • Individual policies
  • Retirement insurance
  • Special policy conditions for variable insurance contracts
  • Guaranteed minimums for variable insurance contracts such as guaranteed minimum death benefits, guaranteed minimum accumulation benefits, guaranteed minimum withdrawal benefits, and guaranteed lifetime withdrawal benefits
  • Reserves in defined contribution retirement pension accounts or Individual Retirement Pension (IRP) accounts that are invested in KDIC-insured products
  • Financial products subject to deposit protection which are incorporated into individual savings accounts (ISAs)
  • Money trusts with principal guarantees
  • Policies of which the holders and premium payers are corporate entities
  • Guarantee insurance or reinsurance policies
  • Main contract of a variable insurance contract (excluding guaranteed minimums such as guaranteed minimum death benefits, guaranteed minimum accumulation benefits, guaranteed minimum withdrawal benefits, and guaranteed lifetime withdrawal benefits), etc.
Merchant Banks
  • Notes issued, CMA
  • Financial investment products (e.g. beneficiary certificates, mutual funds, MMF)
  • Repurchase agreements (RP), Certificates of Deposits (CD), Commercial Papers (CP), bonds issued by merchant banks, etc.
Mutual Savings Banks
  • Ordinary deposits, savings deposits, term deposits, term installment savings, mutual installment deposits, notes issued, etc.
  • Reserves in defined contribution retirement pension accounts or Individual Retirement Pension (IRP) accounts that are invested in KDIC-insured products
  • Cashier's checks issued by the Korea Federation of Savings Banks, etc.
  • Bonds issued by savings banks (subordinated bonds), etc.
  • 1 Financial products purchased by the government, local governments (including national, public schools), Bank of Korea, Financial Supervisory Service, KDIC or insured financial institutions are not insured.
  • 2 Insurance policies of which the holders and premium payers are corporate entities are not protected. Retirement insurance policies are however excluded from this rule.
  • 3 Money that is raised by an overseas branch of a member institution and deemed to be protected by the deposit insurance scheme of the host country is excluded from coverage.