6 October 2014, updated 2 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:
From a depositor's point of view it is important to know:
This article summarises these details about deposit guarantee schemes in the following European countries:
In all of the considered countries all credit institutions operating in these countries are obliged to participate in a deposit guarantee scheme:
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 operating in Monaco participate in French deposit guarantee scheme.
According to Financial Inspection of Estonia, Estonian savings and loan association do not participate in a deposit guarantee scheme.
In most of the countries Deposit Guarantee Schemes covers both natural persons and legal entities:
However, in several countries the list of eligible legal entities is narrowed:
|Country||Eligible Depositors||Non-Eligible Depositors|
|Croatia|| || |
|Ireland|| || |
|Luxembourg|| || |
|Netherlands|| || |
|Slovenia|| || |
|United Kingdom|| || |
The following types of depositors are not eligible for compensation:
In the considered countries deposits in all types of accounts are covered. Exclusions from the coverage are usually made at the level of:
Several examples of the most widely used deposit accounts that are covered by deposit protection schemes:
In Czech Republic, it is additionally underlined that saving books are also covered.
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:
EU currencies are all official currencies of EU Member States.
|RON||Romanian new leu|
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 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:
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.
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||12 687 EUR|
|Liechtenstein||100 000 CHF||88 842 EUR|
|Norway||2 000 000 NOK||202 741 EUR|
|Switzerland||100 000 CHF||88 842 EUR|
|San Marino||50 000 EUR||50 000 EUR|
|United Kingdom||85 000 GBP||83 344 EUR|
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 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 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|