🏦 BanksWhat is the Indonesia Deposit Insurance Corporation and what does it protect?
The Indonesia Deposit Insurance Corporation (LPS) has protected depositors since 1998. It guarantees your money on deposit if a member bank — a commercial bank or a BPR (rural bank), conventional or syariah — fails. It is a statutory body, funded by premiums the banks pay. Cover is up to Rp 2 billion per depositor, per bank, it is automatic (you do not opt in), and it covers foreign-currency deposits up to the same limit in rupiah. One condition: the interest rate on your deposit must be at or below the LPS guarantee rate that LPS publishes. In this article we go through exactly what is covered, how the limit works, and what to consider if you hold large amounts.
What is covered and how much
The scheme covers money in savings accounts (tabungan), current accounts (giro) and time deposits (deposito) at a member bank. The limit is Rp 2 billion per depositor, per bank — all your accounts of one type of ownership at the same bank are added together for the limit, not counted separately.
For a joint account, the balance is generally split between the holders for the limit. Foreign-currency deposits are covered too, converted to rupiah. The three conditions LPS checks before paying (the 3T) are: the deposit is recorded in the bank books, the rate was within the LPS guarantee rate, and the depositor did not cause the bank to fail. Cover is automatic — you do not register.
What the scheme does not protect
Investments such as unit trusts, mutual funds, shares, bonds and repurchase agreements (repos) are not deposits and are not covered by LPS. Their value can rise and fall with the market, and that is a normal risk, not something a guarantee scheme covers. Money with an entity that is not an LPS member bank is also outside the scheme.
LPS also does not protect you against low interest, against inflation, or against losing money on an investment. It applies only when a member bank itself fails — and only to deposits that were within the LPS guarantee rate.
If you hold large amounts
If you hold more than Rp 2 billion on deposit at one institution you can spread the money across several member banks to stay under the limit at each. LPS publishes the guarantee rate and the member list; also keep every deposit within that rate so the 3T conditions are met.
Because LPS covers deposits and not investments, if a firm offers you a high 'return' that is actually an investment product, check whether the money would sit in an insured deposit or in something outside the scheme before you commit.
Frequently Asked Questions
- How much does LPS cover?
- Up to Rp 2 billion per depositor, per bank. At that limit the great majority of deposit accounts in Indonesia are fully covered. Foreign-currency deposits are covered too, up to the same limit converted to rupiah.
- Does the Rp 2 billion limit apply per account or per person?
- Per depositor, per bank. All your personal accounts at the same bank are added together and covered up to Rp 2 billion in total, not per account. Spreading money across several banks is how you cover a larger sum.
- Is my unit trust or repo covered by LPS?
- No. Unit trusts, mutual funds, repos, shares and bonds are investments, not deposits, so they are outside LPS. They carry market risk. Only money in a savings, current or time deposit at a member bank, within the LPS guarantee rate, is covered.
Informational content, not financial, tax or legal advice. Check amounts, limits and current rules directly with the official sources (BPJS Ketenagakerjaan, the OJK, Bank Indonesia, the Directorate General of Taxes, LPS) before making a decision.
