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Understanding Deposit Guarantee in European Banking

March 22, 2023

As you start your journey towards managing your personal finance, it's crucial to know about the safety net that protects your money in banks. One such safety net is the Deposit Guarantee. In this blog, we will explain to you how bunq, the digital bank, keeps your money safe under the Dutch Deposit Guarantee Scheme, how it works, and what is covered. 

What is a ‘Deposit Guarantee Scheme’? 

Deposit Guarantee is a mechanism that acts as a buffer for bank account holders in case their bank fails or goes bankrupt. If a bank is closed down, the scheme is to reimburse account holders of the bank up to a certain amount. The Deposit Guarantee is usually provided by a government agency or a fund established by the government.

In Europe, the Deposit Guarantee Scheme is a harmonized mechanism across all member states of the European Union (EU). In practice, this means that depositors across the EU enjoy the same level of protection, regardless of which EU country their bank is based in. The current Deposit Guarantee amount in Europe is €100,000 per eligible depositor, per bank.

bunq and the Dutch Deposit Guarantee

At bunq, we believe that protecting your money is of utmost importance. bunq has a banking license issued by De Nederlandsche Bank and therefore, we are proud to say that your eligible deposits are protected under the Dutch Deposit Guarantee Scheme. 

How Does the Dutch Deposit Guarantee Work?

Let's say you have a current account or savings account with us. If we can no longer meet our obligations to you, De Nederlandsche Bank will ensure you get your eligible funds back, from 1 cent up to €100,000 per person within a short period of time without you having to do anything. It's important to note that this guarantee covers the total amount of your deposits, including any interest earned. 

Who is protected by the Dutch Deposit Guarantee? 

The Dutch Deposit Guarantee protects the money all individuals and companies and organizations have in a bank account, with the exception of government organizations and financial companies. 

What is protected under the Dutch Deposit Guarantee? 

In principle, the Dutch Deposit Guarantee covers the money in your current account, savings account or term deposit. However, not all financial products are eligible under the Dutch Deposit Guarantee. 

At bunq, your accounts are covered by the Dutch Deposit Guarantee Scheme (DGS), regardless of the subscription plan you choose. Be mindful, however, that e-money accounts and  (non-Euro) Local Currency account(s) are excluded from the Deposit Guarantee Scheme. Nevertheless, given bunq always aims to keep your funds safe and sound, we ensure that your balance on your (non-Euro) Local Currency account(s)  are held in a third-party account which isn't sensitive to any credit-risks from our counterparty. 

Is my business account protected separately from my personal account?

This will depend on your business structure. If your business is a sole proprietorship, it is not a legal person. Therefore the account will fall under the ‘one account per bank’ principle. On the other hand, if your business is a legal person, such as a private limited company for instance, it will be protected separately from your personal account.

Wanna know more ?

Depositor Information Template bunq B.V. 

Dutch Deposit Guarantee Scheme - DNB information page  

Still bothered by a question, do not hesitate to reach out to our Support Department.

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