There will be an increase in deposit insurance coverage from $125,000 to $200,000.

T&T’s Deposit Insurance Corporation was set up to manage a fund which provides insurance protection for depositors against the potential loss of their deposits, should any of its member financial institution fail.

In a media release, the Finance Ministry today announced that the increase in coverage will take effect on October 1st, 2024 bringing it in line with the recommendation coverage ratio of the IMF.

The Ministry believes the move will also compensate for inflationary pressures and surpass alignment with best practice.

Additionally, it says there will be an increase in the premium levied on financial institutions from 0.2% to 0.3% over a two-year period starting on October 1st, 2024.

Here’s some more information on deposit insurance coverage from the Deposit Insurance Corporation of T&T:

“What is a Deposit Insurance System?

Generally, it is a mechanism that provides protection to depositors of commercial banks and other such deposit taking institutions upon the failure of these institutions.

Why establish a Deposit Insurance System?

A country may establish a deposit insurance system for a number of reasons some of which include:

• Provide protection for small unsophisticated depositors
• Enhance confidence and stability in the financial system
• Encourage savings and foster economic development
• Promote competition between small new banks and more established larger banks

Profile of the Deposit Insurance System in Trinidad and Tobago

The objective is to provide protection for small, unsophisticated depositors. The features are:

• Mandate (Paybox Plus – A Mandate in which the Deposit Insurer has additional responsibilities, such as certain Resolution functions (e.g. financial support).
• Membership is Compulsory
• Limited Coverage of deposits held
• Combination of Private and Public Funding
• Coverage of Local Currency deposits only
• Member contributions are a fixed percentage of deposits held”