Most bank savers know that their deposits are protected by guarantees. Few realize that if, for example, they sell their apartment or get a divorce, the rules for protecting funds are slightly different. They are also not identical in each bank on the market.
For nearly 10 years, every bank client has received a document called a “sheet for depositors” every year. This is a statutory requirement introduced throughout the European Union. At that time, not only information obligations were unified, but also minimum requirements for local deposit guarantee schemes.
The main idea behind the financial safety net for bank savers is to strengthen trust in these institutions. The average consumer shouldn't have to worry about what will happen to their money if their bank gets into trouble. In the event of a bank bankruptcy, regardless of what assets remain, depositors can count on recovering their funds. Claims are handled by a fund created from contributions paid by each sector participant. In Poland, this role is played by the Bank Guarantee Fund.
The basic protection limit is PLN 100,000. euro
In the European Union, funds are guaranteed up to the equivalent of PLN 100,000 euro for each depositor. In Poland, the amount is converted into Polish zloty at the average exchange rate of the National Bank of Poland on the date of fulfillment of the guarantee condition. If we have a joint account with other people, this limit applies to each depositor separately. The limit includes not only bank deposits (e.g. deposits, personal accounts), but also, among others: receivables resulting from settlements (e.g. incoming transfer) or instructions in the event of the account holder's death.
Withdrawals are made in Polish zloty, within 7 business days from the date of fulfillment of the guarantee condition (e.g. suspension of operations and filing of a bankruptcy petition of the bank or credit union). The Bank Guarantee Fund may conclude an agreement for handling payments with a selected entity (e.g. a bank). In each case, the place and date of payment shall be made public.
In some cases, the protection goes further
The deposit protection limit should encourage us to distribute larger savings. It is definitely worth dividing the reserves kept in banks so as not to exceed the limit equivalent to PLN 100,000 in one institution. euro. However, sometimes it cannot be avoided. An example may be the settlement of the sale of real estate when the buyer transfers us a large amount at one time. Fortunately, this does not mean that we expose ourselves to greater risk. However, you need to know the exceptions to the “100,000 rule”.
Deposit protection rules in the Union provide for a specific approach in several scenarios. Other rules apply to deposits, which include:
- Funds from the fee disposal of real estate or part thereof, if the sale did not take place as part of a business activity.
- Contractual or judicial remedies division of property after the termination of marital property.
- Funds coming from acquisition of inheritancemaking a bequest or receiving a compulsory share.
- Paycheck funds life insurance in connection with the death of the insured person
or reaching the specified age. - Funds from the withdrawal of title accident insurance.
- Funds from the payment of guaranteed severance pay, retirement or disability benefits.
They are covered by warranty protection for a higher amountwhich is the difference of twice the limit equivalent to PLN 100,000. euro and the sum of the depositor's remaining funds (but not higher than the equivalent of EUR 100,000).
Let's see how this formula works with an example. We assume that the average euro exchange rate was PLN 4.2483. The limit of guaranteed funds is therefore PLN 424,830. Customer deposits are protected up to this amount. However, let's assume that a few days earlier, funds from the sale of the apartment were transferred to our account and we still kept them in the bank. In this case, if we did not have any other savings in the same bank, they will be guaranteed up to PLN 849,660. If we had, for example, a deposit worth PLN 50,000 in this institution. PLN, funds from the sale of the apartment are guaranteed up to PLN 799,660.
A higher level of guarantee covers funds that are left transferred to the account a maximum of 3 months before the warranty condition is met. To receive a payment of funds exceeding the equivalent of EUR 100,000 in PLN, the depositor must submit an appropriate application. Additional protection lasts for 3 months from the date the account is credited.
If the depositor's funds come from the payment of compensation for damage caused by a crime or compensation for harm suffered, they are fully protected for 3 months.
How does the guarantee work in banks operating cross-border?
On the Polish market, we can find institutions that operate on the basis of permits issued in other European Union countries. The consequence of using the so-called the single European passport is coverage by a deposit guarantee scheme from the licensing country. This means that payments are made, in the event of bankruptcy, by the local institution. Those who read the depositor sheets carefully will also notice other nuances.
Although the EU deposit insurance bases are the same, the directive gave member states some freedom when it comes to the “special” scenarios mentioned above. “Member States shall ensure that ('special' – editor's note) deposits above EUR 100,000 are protected by at least three months and no longer than 12 months after recognizing a given amount” – indicates the act.
Therefore, we will find banks on the Polish market where, due to their origin, protection lasts a bit longer. An example is the Italian BFF Group (Lokata Facto), where “special” rules extend for 9 months from the time the funds are recorded. The German system, however, provides for a higher protection limit (EUR 500,000) for a longer period than in Poland (6 months), which may be important for Trade Republic users. In turn, in the Estonian inBank, the protection of funds from the sale of real estate includes an additional PLN 70,000. euro for 6 months. The Lithuanian origin of the license, Revolut, on the other hand, uses local limits for funds from the sale of real estate (EUR 300,000, up to 6 months) and for other scenarios (EUR 200,000).
