What will happen to our savings in the local bank account if there’s a huge market crash?

Deposit Insurance Scheme (SDIC) will cover your money in bank up to $75000.

Even without this, given MAS tight policies on the banks that are allowed to operate in Singapore, i say there is very little risk of savings that will be lost.

Rest well.

Do note that despite the assurance, you are losing value of money kept in the bank because of INFLATION

Do the right thing- go for stocks or ETF funds. Or bonds if you have less than 5 years to use those funds.

Do not do the riskier thing and leave your retirement savings in the bank.

SDIC is meant to help in the following

1) Bank deposits gaurantee if up to $75,000, per bank, in the case any bank belly up.

2) Policy Owner Protection Scheme, where it has two limits
A) limit of sum assured benefit up to $500,000 per policy holder.
So your Protection benefit is protected up to $500,000.00

B) Surrender Value capital protection of up to $100,000.00.
So in the event insurance belly up, your cash value is protected up to $100,000.