JAKARTA – The Indonesia Deposit Insurance Corporation (LPS) has lowered the deposit insurance rate by 25 basis points (bps) for rupiah savings at commercial banks and rural banks (BPR).

The reduction means the insured interest rate for deposits at commercial banks now stands at just 4%. Meanwhile, the deposit rate at BPR has dropped to 6.50%.

In addition, the LPS Board of Commissioners meeting also decided to maintain the foreign currency deposit insurance rate at commercial banks at 2.25%.

Purbaya Yudhi Sadewa, Chairman of the LPS Board of Commissioners, said the new rates would be in effect from 1 June to 30 September 2025.

However, Purbaya noted during a press conference held on Tuesday (27/5) that these rates will continue to be reviewed periodically.

“They may be adjusted at any time, in the event of significant changes in economic, banking, or financial market conditions,” Purbaya explained.

It is important to note that the deposit insurance rate is the maximum interest rate on deposits that can be covered by LPS. In the banking industry, LPS functions as an independent body that protects customers from the risk of bank failure and helps maintain banking system stability.

This latest LPS rate cut comes exactly one week after Bank Indonesia (BI) lowered its benchmark interest rate, the BI Rate, by 25 bps to 5.5%. As previously reported by IDNFinancials.com, this marks BI’s lowest benchmark rate in the past two years. (KR/ZH)