How to insure their investors European banks?
The company IT-OFFSHORE offers services for remote bank account opening in banks in Cyprus, Latvia and the Czech Republic! Recently, we receive more and more questions about how safe it is to keep savings on a current account in Europe? Especially for you, we have prepared a brief information on deposit insurance.
Guaranteeing the return of deposits in the EU has existed for more than 20 years, the corresponding directive (94/19 / EC) was adopted on May 30, 1994.
As for deposit insurance, initially the minimum guaranteed amount was from 15,000 to 20,000 EUR, but since the end of 2013, changes have been made and the amount of payments increased to 100,000 EUR.
How it works?
In each country of the European Union, Deposit Insurance Funds have been created that adhere to a single directive. By law, banks that have a legal address in any of the EU countries should contribute to the common fund.
In the case when the Central Bank of any country declares one of the credit institutions to be bankrupt, insurance payments to depositors are made from the Deposit Insurance Fund.
And so, today the Latvian, Czech and Cypriot banks pay 100% of deposits to all individuals and legal entities. But in the amount of up to 100 000 EUR for each individual client. The amount of payment in national currency must also be strictly equivalent to a deposit of up to EUR 100,000.
Of course, a fair question immediately arises:
What to do if the deposit amount is more than 100 000 EUR, and the bank was declared bankrupt?
In any case, the investor will receive coverage of no more than 100,000 EUR through another member bank of the insurance system. But suppose you saved 150,000 EUR on your account, and the bank in which the account was opened was declared insolvent. In this case, you will receive compensation of up to EUR 100,000, and the remaining amount of EUR 50,000 will be paid after the bankruptcy of the bank is completed and its assets are sold. The depositor becomes the first-stage creditor and, accordingly, has the primary right to receive funds when selling bank property.
We open accounts only in respectable and stable banks.
Hellenic Bank, USB BANK, Eurobank
Česká spořitelna, Raiffeisen Bank, Sberbank CZ, FIO Banka, PPF Banka, CSOB
Baltikums Bank, Citadele Bank, Rietumu, Norvik Banka, ABLV Bank