Is Simple covered by SDIC (Singapore Deposit Insurance Corporation)?

Q: Is Simple covered by SDIC (Singapore Deposit Insurance Corporation)?

No, and Simple shouldn’t be covered by SDIC, as it is not a bank deposit. Instead Simple safeguards your money in a different way: Your funds are invested in money market funds These assets are held in segregated custody accounts, separate from StashAway’s and the fund manager’s assets That means your money always remains yours, even in the unlikely event that StashAway were to shut down. Your assets in Simple are never mixed with StashAway’s balance sheet, so they don’t require SDIC protection. Banks, on the other hand, operate on a fractional reserve system. This means the banks lend out your deposits and only keep a fraction as cash. That’s why SDIC protection is necessary for bank deposits, in the event of a bank run, there is a possibility that the bank does not have enough cash on hand, which is where the insurance comes in. Find out more here: <a href="https://www.stashaway.sg/help-center/115003747047-what-happens-to-my-money-if-stashaway-gets-acquired-goes-public-or-closes">What happens to my money if StashAway gets acquired, goes public, or closes?</a>

Question

Accepted Answer

No, and Simple shouldn’t be covered by SDIC, as it is not a bank deposit.

Instead Simple safeguards your money in a different way:

Your funds are invested in money market funds
These assets are held in segregated custody accounts, separate from StashAway’s and the fund manager’s assets

That means your money always remains yours, even in the unlikely event that StashAway were to shut down.

Your assets in Simple are never mixed with StashAway’s balance sheet, so they don’t require SDIC protection.

Banks, on the other hand, operate on a fractional reserve system. This means the banks lend out your deposits and only keep a fraction as cash. That’s why SDIC protection is necessary for bank deposits, in the event of a bank run, there is a possibility that the bank does not have enough cash on hand, which is where the insurance comes in.

Find out more here: What happens to my money if StashAway gets acquired, goes public, or closes?