LPS Deposit Guarantee Requirements Explained

Understanding Deposit Insurance Coverage

The Indonesian Deposit Insurance Corporation (LPS) provides crucial protection for bank depositors by guaranteeing deposits up to Rp2 billion per customer per bank. This guarantee covers various types of accounts including savings, current accounts, and time deposits. To qualify for this protection, deposits must meet specific requirements set by LPS.

Official Recording Requirement

The first requirement is that the deposit must be officially recorded in the bank's system. This means there must be proper documentation of account opening, transaction records, and accurate balance reporting. Any deposits kept outside the formal banking system, often referred to as 'titipan', are not covered by LPS protection.

Interest Rate Compliance

The second requirement relates to the interest rate paid on deposits. LPS sets a maximum interest rate ceiling for both rupiah and foreign currency deposits, known as the 'Tingkat Bunga Penjaminan' (TBP). If a deposit receives interest above this ceiling, it will not be guaranteed. For example, in September 2025, the TBP for rupiah deposits in commercial banks was set at 3.50%. Any deposit receiving higher interest than this rate would not be covered by LPS insurance.

Legitimate Account Holder Behavior

The third requirement concerns the account holder's behavior. Deposits can be disqualified from LPS protection if the account holder is found to have engaged in illegal activities such as money laundering, fraud, or other criminal acts that cause losses to the bank. This includes cases where account holders have manipulated transactions or are involved in banking crimes.

Recent LPS Statistics and Operations

As of Q3 2025, LPS has been actively processing claims from bank liquidations. The corporation has paid out Rp385.41 billion in deposit insurance claims across 37,724 accounts from 8 banks that were liquidated. The total eligible deposits for these banks amounted to Rp439.70 billion across 42,782 accounts, representing 93.85% of total deposits in these institutions.

Implications for Bank Customers

Understanding these requirements is crucial for bank customers to ensure their deposits are fully protected. While the LPS guarantee provides significant security, customers must be aware of the conditions that could potentially disqualify their deposits from being insured. Maintaining compliance with LPS requirements helps ensure that deposits remain protected up to the Rp2 billion limit per bank.