HKSI Paper 1 Regulatory overview of the Hong Kong financial industry question: Deposit Protection Scheme pays

HKSI Paper 1Regulatory overview of the Hong Kong financial industry

Mrs Yeung holds HK$600,000 in a savings account and HK$500,000 in an 18-month time deposit at the Hong Kong office of Harbour Bank, a licensed bank. If Harbour Bank fails in 2026, what is the most the Deposit Protection Scheme pays her?

A HK$500,000
B HK$1,100,000
C HK$800,000
D HK$600,000

Show the answer and explanation

Answer: C. HK$800,000

Since 1 October 2024 the Deposit Protection Scheme Ordinance (Cap. 581), s.27, caps compensation at HK$800,000 per depositor per Scheme member, however many protected deposits the depositor holds there. Both her deposits are protected (the time deposit's term does not exceed 5 years), so they are added together: HK$1,100,000, capped at HK$800,000. HK$500,000 was the limit before 1 October 2024. HK$1,100,000 wrongly gives each account its own limit. HK$600,000 wrongly leaves out the time deposit; only term deposits of more than 5 years are excluded (Sch. 1 s.1). Source: Deposit Protection Scheme Ordinance (Cap. 581) s.27 and Sch. 1 s.1, as amended by Ord. 19 of 2024 (limit HK$800,000 from 1 October 2024); Hong Kong Deposit Protection Board (dps.org.hk) (as at October 2026).

Common mistake

Candidates use the old HK$500,000 limit, or apply the limit per account instead of per depositor per bank.

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