HKSI Paper 1 Regulatory overview of the Hong Kong financial industry question: receive in total from the Deposit Protection Scheme

HKSI Paper 1Regulatory overview of the Hong Kong financial industry

Mr and Mrs Lam have one joint savings account at Kowloon Pearl Bank, a licensed bank, holding HK$1,400,000. Neither has any other deposit there. If the bank fails, how much do they receive in total from the Deposit Protection Scheme?

A HK$700,000, as only the first-named holder is covered
B HK$800,000, as a single limit applies to each account
C HK$1,000,000, as each depositor is capped at HK$500,000
D HK$1,400,000, as each is treated as holding HK$700,000

Show the answer and explanation

Answer: D. HK$1,400,000, as each is treated as holding HK$700,000

Under Cap. 581 s.28(2)-(3), joint holders who are not partners are each entitled to compensation for their own share, and each is deemed to hold an equal share unless the contrary is proved to the Board. Each spouse has HK$700,000, within his or her own HK$800,000 limit per Scheme member (s.27, from 1 October 2024), so the whole balance is covered. The limit applies per depositor, not per account, so one HK$800,000 cap is wrong. HK$500,000 per depositor was the limit before 1 October 2024. Nothing in the Ordinance limits cover to the first-named holder. Source: Deposit Protection Scheme Ordinance (Cap. 581) ss.27, 28; Hong Kong Deposit Protection Board FAQs (dps.org.hk) (as at October 2026).

Common mistake

Candidates apply one HK$800,000 limit to the whole joint account.

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Original study material mapped to the public HKSI Paper 1 syllabus. Unofficial, not endorsed by HKSI Institute or the SFC. Verify figures and rules against current guidance before relying on them.