Min­is­ter of Fi­nance, Colm Im­bert, an­nounced on Wednes­day de­posit in­sur­ance cov­er­age has been in­creased to $200,000 from $125,000, with ef­fect from Oc­to­ber 1, 2024.

In a news re­lease, Im­bert said the in­crease in the in­sur­ance de­posit cov­er­age was based on "care­ful con­sid­er­a­tion of fund­ing re­views and as­sess­ments, in­ter­na­tion­al best prac­tice and con­sul­tan­tions with the Cen­tral Bank and fi­nan­cial sec­tor stake­hold­ers."

He said the ad­just­ment is con­sid­ered to be in the pub­lic in­ter­e­stand is in­tend­ed to pro­vide a fur­ther lev­el of pro­tec­tion for per­sons who de­posit their sav­ings in fi­nan­cial in­sti­tu­tions.

Im­bert said the in­crease in de­posit in­sur­ance cov­er­age will ben­e­fit all de­pos­i­tors and help to:

* Align cov­er­age lev­els with the In­ter­na­tion­al Mon­e­tary Fund's rec­om­mend­ed ra­tios of one to two times GDP per capi­ta. The ex­ist­ing cov­er­age lim­it, s a ra­tio of GDP per capi­ta, equates to 0.89, which is less than one per cent. There­fore, an in­crease in the cov­er­age lim­it to $200,000 will in­crease the ra­tio to 1.42;

* Com­pen­sate the in­fla­tion­ary pres­sures,which have cu­mu­la­tive­ly im­pact­ed the re­al pur­chas­ing pow­er of de­pos­i­tors. No­tably, the re­tail price in­dex was im­pact­ed by 49 per cent over the pe­ri­od 2-15 to 2022, re­sult­ing in a deficit of $61,250 per max­i­mumvel­i­gi­ble cov­ered de­posit at the sus­tained cov­er­age lev­el; and

* Main­tain and sur­pass align­ment with best prac­tice, that is, the In­ter­na­tion­al As­so­ci­a­tion of De­posit In­sur­ers' rec­om­mend­ed cov­er­age ra­tios of 90 to 95 per cent­for the num­ber of ac­countsand 30 to 30 per centof the val­ue of the ac­counts. The change in cov­er­age lev­el in­creas­es pro­tec­tion from 94 per cent to 96 per cent on all el­i­gi­ble num­ber of de­posit ac­counts and in­creas­es the ag­gre­gate val­ue of in­sured de­posits from 23 per­cent to 33 per cent held at li­censed fi­nan­cial in­sti­tu­tions.

The in­crease in the de­posit in­sur­ance cov­er­age was le­git­imised by Im­bert's sign­ing of the Cen­tral Bank (De­posit In­sur­ance) Or­der 2024 and the Cen­tral Bank (De­posit In­sur­ance Cov­er­age Lim­it­ed) Or­der 2024 on Au­gust 28, both of which come in­to ef­fect on Oc­to­ber 1, 2024.

The Cen­tral Bank (De­posit In­sur­ance) Or­der 2024 in­creas­es the pre­mi­um levied on fi­nan­cial in­sti­tu­tions from 0.2 per cent to 0.3 per cent over a two-year pe­ri­od.

The cu­mu­la­tive ef­fect of both or­ders is that the in­crease in de­posit in­sur­ance cov­er­age will be sim­u­la­ta­neous­ly matched by a pru­dent ad­just­ment to the de­posit in­sur­ance pre­mi­um levied.

In an ex­plana­to­ry note on its web­site, the Cen­tral Bank out­lined what ac­counts are cov­ered by de­posit in­sur­ance: "De­posit in­sur­ance cur­rent­ly cov­ers on­ly sav­ings ac­counts, chequing ac­counts, de­mand de­posits and time de­posit ac­counts held in Trinidad and To­ba­go dol­lars at 24 mem­ber in­sti­tu­tions (banks, fi­nance hous­es, and trust and mer­chant banks re­ferred to above) up to a pre­scribed lim­it (cur­rent­ly TT$125,0000).

"It is im­por­tant to check the DIC’s web­site (https.dictt.org) for de­tails on the treat­ment of spe­cif­ic de­posits, such as joint or mul­ti­ple ac­counts. De­posits in oth­er in­sti­tu­tions, such as cred­it unions, are not cov­ered un­der this arrange­ment."