Objective: Previous studies have shown that certain severe mental illnesses (SMIs) increase the risk of dementia, but those that increase the risk to a greater degree in comparison with other SMIs are unknown. Furthermore, physical illnesses may alter the risk of developing dementia, but these cannot be well-controlled. Methods: Using the Taiwan National Health Insurance Research Database, patients with schizophrenia, bipolar disorder and major depressive disorder (MDD) were recruited. We also recruited normal healthy subjects as the control group.All subjects were aged over 60 years, and the duration of follow-up was from 2008 to 2015. Multiple confounders were adjusted, including physical illnesses and other variables. Use of medications, especially benzodiazepines, was analyzed in a sensitivity analysis. Results: 36,029 subjects (MDD: 23,371, bipolar disorder: 4,883, schizophrenia: 7,775) and 108,084 control subjects were recruited after matching according to age and sex. The results showed that bipolar disorder had the highest hazard ratio (HR) (HR: 2.14, 95% confidence interval [CI]: 1.99−2.30), followed by schizophrenia (HR: 2.06, 95% CI: 1.93−2.19) and MDD (HR: 1.60, 95% CI: 1.51−1.69). The results remained robust after adjusting for covariates, and sensitivity analysis showed similar results. Anxiolytics use did not increase the risk of dementia in any of the three groups of SMI patients. Conclusion SMIs increase the risk of dementia, and among them, bipolar disorder confers the greatest risk of developing dementia. Anxiolytics may not increase the risk of developing dementia in patients with an SMI, but still need to be used with caution in clinical practices.