Is It Safe to Put My Savings in a Finance Company in Singapore?
Most Singaporeans bank with one of the major banks. It’s the default choice the moment you start earning an income. It’s what your parents did, and what your friends do too.
But you may have noticed something. Licensed finance companies in Singapore also take deposits. Some pay rates that outpace what the banks are currently offering. That leaves an obvious question: is parking your savings there actually safe?
This guide breaks the answer down into four parts:
- What a Finance Company Is: How it differs from a bank, and why that difference has nothing to do with safety.
- What Protects Your Deposits: The insurance scheme behind your savings and what it covers.
- How to Spot a Legitimate Institution: The checks you can run yourself in a few minutes.
- Where the Real Value Sits: a side-by-side comparison of rates and conditions between banks and finance companies.
What Is a Finance Company and How Is It Different From a Bank?
A licensed finance company in Singapore is regulated by the Monetary Authority of Singapore under a framework called the Finance Companies Act. This act governs licensing requirements, operations, activities and corporate governance to ensure financial stability and protect depositor funds.
The key difference between a finance company and a bank lies in what they offer:
- Product Range: Finance companies typically do not offer foreign currency deposits or current accounts for individuals.
- Specialisation: Finance companies focus more on deposits and lending for individuals and SMEs, rather than running a full suite of retail and corporate banking services.
- Core Products: A licensed finance company can legally accept deposits and offer fixed deposits and savings accounts.
Are Your Savings Protected If You Deposit With a Finance Company?
Yes. Deposits placed with MAS-licensed finance companies are covered under the Singapore Deposit Insurance Corporation’s Deposit Insurance scheme. This is the same scheme that insures bank deposits, up to S$100,000 per depositor per institution.
Here is what that protection actually means:
- If the Institution Fails: Your insured deposits are protected and reimbursed up to the S$100,000 cap.
- Bank or Finance Company: The scheme does not distinguish between the two once an institution is a member, so the safety net works identically either way.
How Do You Know If a Finance Company Is Legitimate in Singapore?
There’s a few quick checks you can conduct yourself which will confirm whether you are dealing with a properly licensed institution:
- Check the MAS Financial Institutions Directory: Any entity legally permitted to take deposits in Singapore must be licensed and listed here.
- SDIC Membership: Legitimate deposit-taking institutions display the SDIC logo and required disclosure statements on their marketing materials. You can also check SDIC’s official list of Deposit Insurance Scheme members to confirm if the institution is included.
- Operating History: A verifiable track record, audited financials for listed companies, and a physical branch presence are all reasonable marks of credibility.
- Clear Terms: Advertised rates should come with plain terms and conditions attached, not a headline figure with the fine print left for you to chase down.
How Does SingFinance Measure Up?
SingFinance is a MAS-licensed finance company that has operated in Singapore since 1964 and is listed on the Singapore Exchange since 1983.
- Deposit Protection: Deposits with SingFinance are SDIC-insured up to S$100,000.
- Regulatory Disclosure: All SingFinance product materials carry the disclosures required under MAS advertising guidelines.
- Public Accountability: As a listed company, SingFinance publishes audited annual reports and financial results, giving depositors a level of transparency and security.
As an added bonus, SingFinance focuses on a human touch with experienced staff at their branches to advise you whenever you have a question about a product or your account.
The Final Verdict: Is It Safe to Put Your Savings in a Finance Company?
Yes, it is safe to put your savings in a finance company if you pick a reputable one like SingFinance that is listed on the SGX, operates under strict MAS regulation and the deposits are covered under SDIC deposit insurance. Because your funds are insured as they would be in a traditional bank, you can focus on the financial products offered by each institution and pick the one which makes your money work the hardest.
A high yield savings account like SingFinance’s GoSavers Account is worth comparing against whichever bank account you currently use. It pays up to 1.30% p.a.* with no salary crediting, no minimum card spend, and no investment tie-in required. Open an account online in a few minutes, and start today earning a competitive interest rate on your savings today.
*Interest rates are subject to change. Always check the official SingFinance website for the latest prevailing rates.
Singapore dollar deposits with SingFinance are insured up to S$100,000 in aggregate per depositor by SDIC.