Keeping money in a bank feels safe, and generally it is. But there is a question customers rarely ask: what happens to your savings if the bank runs into trouble and its licence is revoked? In Indonesia, the answer lies in LPS deposit insurance, provided by the Indonesia Deposit Insurance Corporation. Unfortunately, many people only learn the rules after news of a bank closure. This guide helps you understand them now.

What LPS Deposit Insurance Is

LPS is the institution that insures customer deposits at banks. If a bank has its operating licence revoked, LPS pays the qualifying deposits of customers up to a set limit. The maximum insured amount is Rp2 billion per customer per bank. That means the limit is counted per person at each bank, not per account.

If you hold several accounts at the same bank, all the balances are added together and counted against the Rp2 billion limit. Deposits at different banks, by contrast, are counted separately. So someone holding Rp4 billion could split it, for example Rp2 billion at bank A and Rp2 billion at bank B, so that both are covered.

Which Deposits Are Insured

Coverage includes deposits in the form of current accounts, savings, time deposits, and certificates of deposit. Products outside deposits are not insured. Examples are mutual funds, stocks, bonds, and insurance products, including those sold through banks. So read carefully whether a product you buy at a bank is a deposit or an investment product.

The 3T Conditions: Recorded, Rate, and No Harm to the Bank

A deposit is insured if it meets three conditions often shortened to 3T:

  1. It is recorded in the bank's books. The deposit must be officially recorded. Money handed over outside the bank's system is not insured.
  2. The interest rate does not exceed the guarantee rate. LPS sets a rate cap for insured deposits. If the interest you receive, including gifts or cashback counted as interest, goes over that cap, your deposit may not be insured. The cap changes over time and differs for commercial banks, rural banks, and foreign currency, so the figure should be checked directly on LPS's official website.
  3. The customer did not cause harm to the bank. A deposit is not insured if the customer is proven to be involved in unlawful acts that hurt the bank.

The second condition is the one most often missed. Interest far higher than other banks offer is a sign to be careful, not just a chance to profit.

How to Check a Bank's Licence and Financial Products

LPS insurance only matters if the institution is a licensed bank. A few ways to check:

  • Contact OJK's helpline 157 by phone at 157 or on WhatsApp at 081 157 157 157 to ask about the licence status of a bank or product.
  • Check OJK's official website (ojk.go.id), which lists licensed financial institutions and supervisory information.
  • Check LPS's official website (lps.go.id) for the latest guarantee rate and insurance rules.
  • Look at the bank's own site and app. A genuine bank usually shows the LPS participant logo and its licence information.

This procedure applies to any bank, whether a large bank, a private bank such as MNC Bank, a regional bank, a digital bank, or a rural bank. A bank is not automatically safer or riskier because of its name, so what matters is checking its licence status yourself.

Signs That Should Raise Suspicion

  • An offer of interest far above the market with no explanation of risk.
  • A person asking you to transfer to a personal account rather than an account in the bank's name.
  • An institution name that resembles a bank but cannot be found in the official OJK list.
  • Pressure to decide fast because of a limited promotion.

If in doubt, stop the transaction and verify through official channels before depositing money.

If a Bank Loses Its Licence

When OJK revokes a bank's operating licence, LPS takes over the insurance process. The steps generally run like this: LPS makes an announcement, verifies deposit data, then pays the claims of insured customers. Customers do not need to panic and should follow official announcements on LPS's site and at the bank concerned. Be careful of anyone offering a "claim acceleration service" for a fee. Insurance claims are handled officially without intermediaries.

Habits That Keep Deposits Safer

  1. Spread large deposits across several banks if they exceed Rp2 billion.
  2. Note the interest rate on your deposits and compare it with the guarantee cap.
  3. Keep proof of account opening and proof of deposit.
  4. Separate deposit products and investment products in your financial records.
  5. Compare several banks before opening a time deposit, and do not be drawn in by the highest rate alone.

Closing

LPS insurance gives customers a safety net, but only when the conditions are met. Today, take a few minutes to review your total deposits at each bank, make sure the interest is reasonable, and check your bank's licence status through OJK. That way the money you worked hard to save stays protected.