Korea Raises Deposit Protection to KRW 100 Million: What Changed and How to Split Funds
Korea’s deposit protection limit changed for the first time in 24 years. It doubled from KRW 50,000,000 to KRW 100,000,000, effective 1 September 2025. If you have been splitting funds across banks to stay within the old ceiling, the arithmetic is now different. Here is what actually changed and how it applies.
Since 1 September 2025, deposit protection in Korea covers up to KRW 100,000,000, double the previous KRW 50,000,000. The limit applies per person, per financial institution, and counts principal and interest combined. It covers banks, savings banks, insurers, financial investment firms and mutual finance institutions alike. Funds and other products whose payout depends on investment performance are not covered.
What changed
The protection ceiling rose from KRW 50,000,000 to KRW 100,000,000, the first adjustment since 2001. Amendments to six presidential decrees including the Enforcement Decree of the Depositor Protection Act were approved by the Cabinet in July 2025 and took effect on 1 September 2025.
The scope is broad. It covers the sectors protected by the Korea Deposit Insurance Corporation, meaning banks, savings banks, insurers and financial investment firms, and it simultaneously raised the ceiling for mutual finance institutions protected by their respective federations under separate legislation. This was not a single-sector change.
What is covered and what is not
| Product type | Protected? | Notes |
|---|---|---|
| Deposits and installment savings | Yes | Principal and interest combined, up to the limit |
| Principal-guaranteed products | Yes | Applies regardless of when you opened the account |
| Funds and other performance-linked products | No | Payouts vary with investment performance |
Deposits, installment savings and other principal-guaranteed products qualify for the raised ceiling regardless of when the account was opened, including accounts opened before the change.
The critical detail is that the limit counts principal plus interest, not principal alone. Miss this and you can deposit exactly to the ceiling only to breach it once interest accrues.
How much principal fits under the ceiling
Placing funds at 4.5% for one year, the principal that grows to exactly KRW 100,000,000 at maturity is roughly KRW 95,693,780. Deposit more than that and the excess falls outside protection.
Calculated on simple interest at 4.5%, the top 12-month time deposit rate in the 2026-07 disclosure. Recalculate using your actual contracted rate and term.
In practice it is safer to leave headroom rather than filling the ceiling exactly. Preferential rates can push interest higher than expected, and funds left past maturity may roll over, so sitting somewhat below the limit is easier to manage.
How many institutions for KRW 200 million
Suppose you hold KRW 200 million and place it at 4.5% for a year. With a ceiling of KRW 100,000,000 you might expect two institutions to be enough. Because interest counts toward the limit, the arithmetic works out differently.
| Where | Principal deposited | Interest over 1 year (pre-tax) | Total at maturity |
|---|---|---|---|
| Institution A | KRW 95,693,780 | KRW 4,306,220 | KRW 100 million |
| Institution B | KRW 95,693,780 | KRW 4,306,220 | KRW 100 million |
| Institution C | KRW 8,612,440 | KRW 387,560 | KRW 9,000,000 |
Simple interest at 4.5% over 12 months, allocated so that principal plus interest stays under KRW 100,000,000 at each institution.
Since only KRW 95,693,780 fits safely at each institution, two are not enough to hold KRW 200 million. A third is needed for the remainder. Splitting by principal alone and being caught out by interest is a common mistake.
Amounts above the ceiling are not simply lost. They rank as claims in the institution’s insolvency proceedings, which means recovery is possible but not guaranteed. If certainty matters, stay within the limit.
Ways to divide funds above the ceiling
Split across institutions
The ceiling applies per institution, per person. Opening several accounts at the same bank does not help, since balances are aggregated. Splitting means using different institutions.
Split across family members
Because the limit is per person, holding funds in different family members’ names gives each their own ceiling. Note that beneficial ownership is what counts, and larger transfers may raise gift tax questions.
Mix sectors
Banks and savings banks are separate institutions, so each carries its own ceiling. Savings banks often offer higher rates, so dividing between the two can raise your return while keeping everything protected.
What the higher ceiling changes in practice
Under the old KRW 50,000,000 limit, holding KRW 100 million required at least two institutions. It now fits in one. Fewer accounts to manage, and it is easier to concentrate funds where the rate is best.
That does not make splitting obsolete. The ceiling rose but the principle did not change, so balances above KRW 100,000,000 still need dividing, and interest still counts toward the total.
TIP. Coverage depends on product type, not institution. At the same bank a deposit is protected while a fund is not. Check for the depositor protection indicator on the product screen before opening.
Frequently asked questions
What is the deposit protection limit in Korea?
KRW 100,000,000, raised from KRW 50,000,000 effective 1 September 2025. It applies per person per financial institution and counts principal and interest combined.
Does the higher limit apply to accounts opened before the change?
Yes. Deposits, installment savings and other principal-guaranteed products qualify regardless of when the account was opened.
Are savings banks covered?
Yes. Banks, savings banks, insurers, financial investment firms and mutual finance institutions all moved to the KRW 100,000,000 ceiling at the same time. Banks and savings banks are separate institutions, so each carries its own limit.
Do multiple accounts at one bank each get protected separately?
No. Balances at the same institution are aggregated. To divide, use different institutions.
Are funds covered?
No. Products whose payout depends on investment performance are excluded. Principal-guaranteed products such as deposits and installment savings are covered.