Deposit guarantees in the EU: what €100,000 really covers

The rule

The Deposit Guarantee Schemes Directive requires every member state to run a scheme, funded in advance by the banks, that repays depositors when a bank is declared unable to pay. The coverage level is harmonised at €100,000 per depositor per credit institution. Since 1 January 2024 the scheme must make the repayment available within seven working days, without you having to apply.

Three words in that sentence carry the weight. Per depositor: the limit belongs to a person, not an account. Per credit institution: it applies to each separately licensed bank, not to each brand or branch. Deposit: it covers money on account, not investments a bank sells you.

Per depositor: joint accounts and several accounts

A joint account held by two people is treated as two deposits, so it is covered up to €200,000 in total, each holder's share counting towards that holder's own €100,000 at that bank. Two accounts in one name at one bank, a current account and a savings account say, share a single €100,000. A sole trader's business account and personal account at the same bank also share one limit, because the depositor is the same person. A company is a separate depositor with its own limit.

Per bank: brands, branches and subsidiaries

One banking licence, one limit. A bank that operates several brands under one licence gives you €100,000 across all of them, not per brand. A bank's branch in another EU country is part of the same institution and covered by the home country's scheme; a deposit at the Dutch branch of a German bank is protected by the German scheme. A subsidiary, by contrast, has its own licence and its own limit. The bank's terms state which entity you contract with; when in doubt, check the licence number.

Temporary high balances

The directive lets member states protect, above €100,000 and for a limited period, deposits that arise from life events: the sale of a private home, an inheritance, a divorce settlement, an insurance or compensation payment. The amounts and periods are national. The Netherlands and France protect up to €500,000 for three months. Germany protects up to €500,000 for six months. Finland protects the proceeds of a home sale in full for six months. If you are parking such a sum, check the rule of the scheme that covers your bank, not of the country you live in.

What is a deposit

Current accounts, savings accounts, notice accounts and fixed-term deposits are covered, in any currency. Accrued interest up to the date of failure is included. What is not a deposit: shares, bonds and fund units held through the bank, even in a savings-branded product; pension and insurance products; balances at a payment or e-money institution, which are safeguarded under different rules; and crypto-assets. A deposit marketplace that places your money with partner banks is itself not covered, but each partner bank is, under its own national scheme, with a separate €100,000 for each.

How a payout works

When the supervisor determines that a bank cannot repay its deposits, the scheme repays you within seven working days, to an account you nominate or by a method it announces. You do not need to file a claim for amounts within the limit. Loans you have at the same bank are not deducted from the repayment unless they are already due. Above the limit you become an ordinary creditor of the bank and recover whatever the liquidation yields, which can take years and be partial.

“The guarantee does not make a bank safe. It makes the first €100,000 of your deposit safe. The difference matters only above that line, which is exactly where people forget it.”

One rule, national schemes

There is no single EU-wide scheme; the proposal for one has been debated since 2015 and not adopted. Each national scheme is funded by its own banks to a target of at least 0.8 percent of covered deposits, with the power to levy more from banks and to borrow if a failure exceeds the fund. Schemes may lend to each other. The credibility of a scheme therefore rests on its member state, which is a reasonable thing to consider when a bank in a smaller market offers a rate well above everyone else.

In practice

Keep no more than €100,000 per bank, counting all your accounts there and using the joint-account rule where it fits. Know which legal entity your bank is and which scheme covers it. Treat a marketplace as a way to spread deposits across several guarantees, not as a guarantee itself. And read the product name carefully: a savings plan that invests in funds is an investment, however it is marketed.