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I have a sum of money in a European bank, and I prefer to have it in a current account for two reasons. One, I don't know how much over the coming year I will need to spend without notice and two, the savings accounts aren't offering interest rates high enough for me to even bother wasting my time to sign the paperwork. The bank is an Austrian one, but I live in another EU state, where the bank has a locally operating subsidiary.

However, given the economic outlook now as a result of the circus in the US, I am concerned we will be facing another banking crisis within a couple of years. In the event of bank failure, the state under EU regs guarantees deposits up to a certain amount. But are there any conditions to this? Must they be saving account deposits or do current account deposits apply too, for example?

Further, which state guarantees the account? The state where the account holder is resident, the state where the bank account is, or the state of the bank account's company, or something else (eg: an EU fund)? (And for extra bonus points, how, if at all, is that affected by Brexit?)

  • In most UK banks, retail customer accounts are protected up to £85,000. I don't think company accounts are protected. – gnasher729 Apr 8 '18 at 16:37
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    See the wikipedia article Deposit Insurance for details of the various national deposit insurance schemes offered around the world. – Nick R Apr 8 '18 at 17:12
  • @Nick R Question updated to ask about which state has responsibility. – Sentinel Apr 9 '18 at 11:34
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The limit is €100,000, or the equivalent in the local currency. So it's £85,000 in the UK. That's guaranteed by the state where the bank is registered to do its business.

The guarantee applies to any personal cash savings accounts, including current accounts. It doesn't apply to other forms of investment.

The limit is €100,000 per bank, not per account. This can get complicated if a bank trades under several different names. Subsidiaries may be registered as banks in their own right, or may simply be brand names used by the one bank.

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    Thanks and it would be good to include Nick R s link to Deposit Insurance for posterity. I had previously been searching for terms like state guaranteed, underwriting, and didn't find the details I needed. – Sentinel Apr 9 '18 at 7:33
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    "guaranteed by the state where the bank is doing its business" might be a little ambiguous... as I understand it, it's guaranteed by the state where the bank is based. I'm in the UK and have some money in a French bank's savings account. While that bank is doing business in the UK, I'm pretty certain it's the French authorities I would have to go to if it went bust. – TripeHound Apr 9 '18 at 7:34
  • @TripeHound. That's a good point. The bank I am using is Austrian, but I am not actually in Austria. But then I suppose for the Austrian bank to operate where I live, it must have a domestic banking license, so I suppose it should be the domestic authorities instead on second thoughts? – Sentinel Apr 9 '18 at 11:30
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    @Sentinel - nobody knows about Brexit. If you believe Boris then your money will be at least automatically doubled when it happens, if you believe the LibDems then your account will empty itself immediately with no compensation. The truth will probably be somewhere in the middle and the compensation scheme will continue at least for a couple of years and then be cut due to "budget constraints" (much like everything else) – uɐɪ Apr 9 '18 at 12:24
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    @TripeHound yes - it's the home country of that bank. I will clarify. But it may be more complicated if the bank has subsidiaries in other countries. – Simon B Apr 9 '18 at 12:29

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