A Chinese clerk counts renminbi banknotes at a branch of China Construction Bank in Haian county, Nantong city, East China's Jiangsu province, Nov 22, 2014. [Photo/IC]

Why is the coverage ceiling set at 500,000 yuan?

About 99.6 percent of Chinese depositors have a banking savings of no more than 500,000 yuan, said Huang Xiaolong, deputy director-general of the bank's financial stability bureau.

The draft rule said ceiling covered by the deposit insurance is subject to change. The regulatory will consider changes in economic development, deposit structure and financial risk and adjust the coverage limit accordingly.

Which banks are safer with deposits?

The deposit insurance system will cover all deposit-taking institutions, including commercial banks, rural cooperative banks and rural credit union, according to the draft rule. Therefore, protections on the deposits are the same.

In case anything goes wrong with the bank, when can I have the money back?

In case banks face serious problems, depositors will receive compensation from the insurance fund or other bank that has acquired the troubled ones.

"As the number of private banks will continue to grow, the deposit insurance system will increase the public's trust in private banks and encourage fair competition in a more diversified banking sector," said Wen Bin, principal researcher at China Minsheng Banking Corp.