Protecting your Bank Deposits

Europe-wide reforms of the statutory deposit guarantees have been undertaken to restore citizens’ confidence in the financial sector.

Update: Jan 2014

In this way it is guaranteed that, up to a certain amount, bank customers will not lose the money they have deposited into the bank (for instance saving bonds or current account credit), in the event that the bank is unable to reimburse the money.

The basis for this protection is a change in the German Guarantee and Investor Compensation Act (Einlagensicherungs- und Anlegerentschädigungsgesetz, EAEG), that incorporated the EU directive 2009/14/EC into national legislation. Thus, from the 1st of January 2011, savings up to a value of 100.000 € are 100 % secured Europe-wide. So far, only 50.000 € were reimbursed. Furthermore, obligations from securities transactions are protected up to 20.000 €, but are covered up to only 90 %.

How can a bank customer obtain his compensation?

If a bank is unable to pay back deposits, the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) comes into play. When the compensation scheme is determined, each affected customer is informed about it by the authority. As a result, the customer has a year to lodge his claim to the competent bank compensation scheme. If the request is justified, the customer must be reimbursed within three months.

Depending on the banking institution, the competent compensation bodies (with their own compensation procedures) will differ.. Further information about this can be found on the BaFin website.

In addition, there are still voluntary banks and saving banks deposit protection funds which go beyond the minimum framework in the protection of customers’ money. They include:

  • Close the article