Deposit Guarantee Schemes in Europe

Published 06 October 2014
Last updated 02 January 2016

Deposit Guarantee Schemes compensate certain deposits (so called eligible deposits) held by depositors of a bank in the case of the bank failure. So, a deposit guarantee scheme affects both depositors and financial system:

on the one hand, it increases the level of customer protection by protecting a part of the depositors' wealth from bank failures;
while on the other, it improves financial stability by preventing depositors from making panic withdrawals from their bank.

From a depositor's point of view it is important to know:

if the depositor's bank is a participant of the deposit guarantee scheme;
if the depositor is eligible according to the terms of the deposit guarantee scheme;
if the depositor's type of deposit is covered by the deposit guarantee scheme.

This article summarises these details about deposit guarantee schemes in the following European countries:

Member States of the European Union
Members of European Economic Area (EEA) but not the members of the EU:

Other European countries:

Participating Credit Institutions

In all of the considered countries all credit institutions operating in these countries are obliged to participate in a deposit guarantee scheme:

All credit institutions except for branches of foreign credit institutions participate in the deposit guarantee scheme of the country they operate in (host country).
Branches of foreign credit institutions participate either in the deposit guarantee scheme of the host country or in deposit guarantee schemes of their home countries. The rules of whether these branches participate in host or home deposit guarantee scheme are slightly differ among the European countries.

A credit institution is not necessarily a bank, but any financial institution that takes deposits: it can also be a credit union, a building society, a savings and loan association.

Credit Institutions in Monaco

Credit institutions operating in Monaco participate in French deposit guarantee scheme.

Savings and Loan Associations in Estonia

According to Financial Inspection of Estonia, Estonian savings and loan association do not participate in a deposit guarantee scheme.

Eligible Depositors

In most of the countries Deposit Guarantee Schemes covers both natural persons and legal entities:

natural persons are eligible regardless of the nationality;
enterprises are usually eligible regerdless of their size.

However, in several countries the list of eligible legal entities is narrowed:

Country	Eligible Depositors	Non-Eligible Depositors
Croatia	natural persons small entrepreneurs non-profit organisations	medium- and large-size companies
Ireland	individuals small companies partnerships clubs associations schools	medium- and large-size companies
Luxembourg	natural persons small businesses with headquarters in the EU	small businesses with headquarters outside of the EU medium- and large-size companies
Netherlands	natural persons small businesses	medium- and large-size companies
Slovenia	natural persons small businesses	medium- and large-size companies
United Kingdom	natural persons small businesses	medium- and large-size companies

Non-Eligible Depositors

The following types of depositors are not eligible for compensation:

other financial institutions;
public authorities;
managers and major shareholders of the bank and their close relatives.

Covered Account Types

In the considered countries deposits in all types of accounts are covered. Exclusions from the coverage are usually made at the level of:

depositors;
account currencies;

Several examples of the most widely used deposit accounts that are covered by deposit protection schemes:

term deposit
demand deposit
savings deposit
current account

In Czech Republic, it is additionally underlined that saving books are also covered.

Covered Account Currencies

In most of the countries, deposits made in all currencies are covered by Deposit Guarantee Schemes. In several countries, however, only EEA or EU currencies are covered:

Country	Covered Currencies
Austria	EEA currencies
Belgium	EEA currencies
France	EEA currencies
Germany	EU currencies
Hungary	EEA currencies
Monaco	EEA currencies

EU Currencies

EU currencies are all official currencies of EU Member States.

EUR	Euro
BGN	Bulgarian lev
HRK	Croatian kuna
CZK	Czech koruna
DKK	Danish krone
HUF	Hungarian forint
PLN	Polish złoty
RON	Romanian new leu
SEK	Swedish krona/kronor
GBP	Pound sterling

Because German deposit guarantee scheme covers only deposits made in EU currencies, the deposits made in non-EU currencies (for example, CHF, USD and JPY) are not covered by the German deposit guarantee scheme.

EEA Currencies

EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.

EEA currencies are all official currencies of EEA members. Switzerland is not a EEA member, but because CHF is the official currency of Liechtenstein, CHF also belongs to EEA currencies.So, EEA currencies include all EU currencies plus the following currencies:

ISK	Icelandic króna
CHF	Swiss franc
NOK	Norwegian krone

In Austria, Belgium, France, Hungary and Monaco only the deposits made in EEA currencies are covered, the deposits in non-EEA currencies (for example, USD and JPY) are not covered by deposit guarantee schemes of these countries.

Compensation Amount: 100 000 EUR in Almost All Countries

In the recent financial crisis, uncoordinated increases in coverage across the European Union have in some cases led to depositors transferring money to credit institutions in countries where deposit guarantees were higher. That is why the maximum covered amount was harmonized across the European Union in December, 2010, it was set to 100 000 EUR per bank per depositor. In the United Kingdom the compensation amount is specified in pounds: it was 85 000 GBP and was lowered to 75 000 GBP since January 1, 2016.

Andorra also provides up to 100 000 EUR compensation.

San Marino, however, provides the compensation only up to 50 000 EUR.

Countries that have compensation amount other than 100 000 EUR are shown in the table below:

Country	Maximum Covered Amount	Maximum Covered Amount, EUR
Iceland	1 700 000 ISK	n/a
Liechtenstein	100 000 CHF	92 132 EUR
Norway	2 000 000 NOK	210 682 EUR
Switzerland	100 000 CHF	92 132 EUR
San Marino	50 000 EUR	50 000 EUR
United Kingdom	75 000 GBP	85 089 EUR

Paid Out Currency

In all countries except for Malta, compensation in paid in the national currency. In Malta the compensation is paid out in the same currency as the deposit.

Branches of Foreign Credit Institutions

Branches of foreign credit institutions participate either in the deposit guarantee scheme of the host country or in deposit guarantee schemes of their home countries. The rules of whether these branches participate in host or home deposit guarantee scheme are summarized in the table below.

Country	Branches participating in host DGS	Branches participating in their home DGS
Andorra	none	all branches of foreign banks
Austria	all branches of foreign banks
Belgium	branches of non-EEA banks	branches of EEA banks
Bulgaria	branches of non-EU banks	branches of EU banks
Croatia	all branches of foreign banks
Czech Republic	none	all branches of foreign banks
Denmark	branches of non-EEA banks	branches of EEA banks
Finland	none	all branches of foreign banks
France	branches of non-EEA banks	branches of EEA banks
Germany	branches of non-EEA banks	branches of EEA banks
Greece	branches of non-EU banks	branches of EU banks
Hungary	all branches of foreign banks
Iceland	branches of non-EEA banks	branches of EEA banks
Ireland	branches of non-EEA banks	branches of EEA banks
Italy	branches of non-EU banks	branches of EU banks
Latvia	branches of non-EU banks	branches of EU banks
Liechtenstein	all branches of foreign banks
Lithuania	all branches of foreign banks
Luxembourg	branches of non-EU banks	branches of EU banks
Macedonia	all branches of foreign banks
Malta	branches of non-EEA banks	branches of EEA banks
Monaco	branches of non-EEA banks	branches of EEA banks
Montenegro	all branches of foreign banks
Netherlands	branches of non-EEA banks	branches of EEA banks
Norway	branches of non-EEA banks	branches of EEA banks
Poland	branches of non-EU banks	branches of EU banks
Portugal	branches of non-EU banks	branches of EU banks
Romania	branches of non-EU banks	branches of EU banks
San Marino	all branches of foreign banks
Serbia	all branches of foreign banks
Slovakia	none	all branches of foreign banks
Slovenia	branches of non-EEA banks	branches of EEA banks
Spain	branches of non-EU banks	branches of EU banks
Sweden	none	all branches of foreign banks
Switzerland	all branches of foreign banks
Turkey	all branches of foreign banks
United Kingdom	all branches of foreign banks