I have savings and other bank accounts: what are my guarantees?

Created on 02 September 2020
Description

The deposit guarantee scheme protects amounts deposited by customers in savings and other accounts and savings schemes. By protecting customers' assets, the FGDR helps to ensure the stability of the French banking system.
The deposit guarantee scheme covers savings another accounts up to a total of €100,000 per customer, per institution. Livret type “A”, “LDDS” and “LEP” savings accounts are covered by a government guarantee under similar conditions. In both cases, compensation is handled by the FGDR.
When a bank is no longer able to repay its customers’ deposits, the Prudential Supervision and Resolution Authority (ACPR i) determines that the deposits are unavailable and the FGDR is automatically instructed to compensate customers. 

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The deposit guarantee scheme has two main effects:

  • firstly, it prevents depositors from facing financial difficulties due to the unavailability of their assets in the event that their bank fails;
  • secondly, by strengthening confidence in the banking system, it minimises the risk of a bank run.

Savings and other bank accounts covered by the deposit guarantee scheme

Protection by the deposit guarantee scheme

The deposit guarantee scheme covers two main categories of savings and other bank accounts.

  1. Regulated savings i accounts guaranteed by the French government: Livret type “A”, “LDDS” and “LEP” savings accounts, up to a total of €100,000 per customer, per bank.
  2. All other current accounts, passbook savings accounts or savings schemes, up to a total of €100,000 per customer, per bank.

 

PRODUCTS COVERED BY THE DEPOSIT GUARANTEE SCHEME

Regulated savings accounts:

  • Livret type “A” savings accounts (and Livret type “Bleu” savings accounts);  
  • Livret type “LDDS” savings accounts; 
  • Livret type “LEP” savings accounts.
All other savings and other accounts and savings schemes denominated in euros or in a government currency:
  • current accounts, demand deposit accounts or term accounts; 
  • home savings accounts and savings plans (CEL, PEL, PEP, etc.); 
  • Livret Jeune savings accounts;
  • cash accounts associated with an equity savings scheme (PEA), a pension savings scheme (PER), an employee savings scheme, or equivalent opened at a banking institution;
  • bank cheque issued and not cashed;
  • total net balance of factoring transactions.
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These deposits are added together and compensated up to a maximum of €100,000 per customer, per bank.
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These deposits are added together and compensated up to a maximum of €100,000 per customer, per bank.

 

€100,000

per customer, per institution for savings and other accounts and savings schemes

€100,000

per customer, per institution for Livret type “A”, “LDDS” and “LEP” savings accounts guaranteed by the French government 

within 7 working days

for compensation of customers

1

€100,000 guaranteed for savings and other accounts

All deposits eligible for coverage are added together to determine the amount the bank owes to its customer. The FGDR pays compensation in this amount, up to €100,000 per customer, per institution, within a maximum of seven working days.

2

€100,000 guaranteed for savings accounts regulated by the French government

Moreover, all sums deposited in savings accounts guaranteed by the French government (Livret type “A” and Livret type “Bleu”, Livret type “LDDS” and Livret type “LEP” savings accounts) are covered, up to €100,000 per customer, per institution. The FGDR compensates customers at the request and on behalf of the French government, also within seven working days.

Broader protection of depositors

The European "DGSD2" Directive adopted on 16 April 2014 (2014/49/EU), which was transposed into French law at the end of 2015 and includes five implementing decrees of 27 October 2015, introduced several significant improvements for depositors:

  • expansion of the guarantee to include all deposits and all currencies;
  • reduction of the compensation period to seven working days instead of 20 days previously;
  • compensation of “temporary high balances”;
  • new obligations for institutions regarding the notification of depositors.
1

You have several accounts at the same bank

The deposit guarantee scheme applies per customer within the same institution. Each institution is identified by the Institution Code shown on the bank details. 

2

You have accounts at several banks

The deposit guarantee scheme applies separately for each bank. 
Your compensation of up to €100,000 per bank is calculated by adding the total amounts deposited by you at each bank. 

How does joint account protection work?

Unless otherwise specified in the account agreement, a joint account is shared equally among the co-holders.
For each co-holder, the amount of their portion of the joint account is added to their personal accounts. The compensation covers this total, up to €100,000 per person.

 

Your personal and business assets (one-person limited liability company (EURL) or limited liability individual business owner (EIRL)) are separate

You are identified as two different customers, each with protection of up to €100,000. You therefore receive compensation separately for your personal savings and other accounts, on the one hand, and for your business accounts, on the other.

Person A has a personal account with a credit balance of €5,000 and person B has a personal account with a credit balance of €9,000. 
Together they have a joint account with a credit balance of €3,000.

  • Compensation i amount for which person A is eligible: €5,000 + one-half of €3,000 = €6,500;
  • Compensation amount for which person B is eligible: € 9,000 + one-half of €3,000 = €10,500.

The name of a joint account generally includes the words "Person A or Person B" and the account can be opened for more than two people.

Temporary high balances

The deposit guarantee scheme may be extended to cover and compensate temporary high balances received less than three months prior to the bank's failure which come from: 

  1. the sale of residential property belonging to you;
  2. a lump-sum payment of compensation for harm sustained by you;
  3. a lump-sum payment of a retirement benefit, an estate, a bequest or a donation;
  4. a compensatory benefit, a settlement or contractual indemnity following the termination of an employment contract.

The €100,000 coverage level is increased by the amount of the exceptional transaction, up to an additional €500,000 for each of the above events (except for bodily injury, for which there is no coverage limit). Thus, for the sale of a residential property in the amount of €200,000, the coverage level is increased by €200,000 to €300,000 for three months. For a sale in the amount of €700,000, the coverage level is increased by €500,000 to €600,000 for three months.

FGDR IS PROTECTING YOUR ACCOUNTS IN THE EVENT THAT
YOUR BANK FAILS

 

Which currencies are covered by the deposit guarantee scheme?

All amounts deposited in savings and other accounts that fall within the scope of the deposit guarantee scheme are covered if they are denominated in euros or an official government currency (US dollar, pound sterling, yen, etc.) – see Article L. 312-4-1 of the French Monetary and Financial Code – to the exclusion of accounts denominated in a regional currency (Eusko in Basque Country, Roue in south-eastern France, etc.), a virtual currency (bitcoin, libra etc.) or a commodity (gold, etc.). 

Products not covered or covered by another guarantee scheme

Exclusions from the deposit guarantee scheme 

PRODUCTS NOT COVERED BY THE DEPOSIT GUARANTEE SCHEME
Products not covered by the FGDR's deposit guarantee scheme include:
  • life insurance policies, capitalisation policies taken out with an insurance company;
  • pension savings schemes (PER, PERP, PEP) with an insurance company;
  • collective pension savings schemes (PERCO), intercompany collective pension savings schemes (PERCO-I), company pension savings schemes (PERE);
  • company savings schemes (PEE), intercompany savings schemes (PEI);
  • notes, coins and items entrusted to your bank's safety deposit department;
  • anonymous deposits or instruments with a holder who cannot be identified;
  • electronic-based cash and payment cards issued by a payment institution or an electronic money institution (Nickel account);
  • deposit of equity (partnership shares, cooperative investment certificates);
  • savings certificates;
  • deposits in cryptocurrencies, local currencies or commodities.
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These products have no GUARANTEE or are protected 
by a guarantee SCHEME OTHER than the FGDR. 
Enquire at your bank.

 

Good to know: 
Cryptocurrencies are not covered by the FGDR’s deposit guarantee scheme. More generally, accounts denominated in a local currency (Eusko in Basque Country, Roue in south-eastern France, etc.), a virtual currency (bitcoin, libra etc.) or a commodity (gold, etc.) are not covered.
Electronic-based cash and cash on payment cards issued by a payment institution or electronic money institution (PI/EMI) are also not covered by the FGDR’s deposit guarantee scheme.

Protection of life insurance and capitalisation policies and insurance-based savings plans

Companies that underwrite life insurance or capitalisation policies are life insurance companies and not banks (even if policies are sold via a bank). These life insurance companies are covered by the personal insurance guarantee scheme (FGAP), which is separate from the FGDR. 
If the bank that sold you the life insurance products fails, your policies with the life insurance company are not affected and your funds can be returned under the contractual terms and conditions. 

Protection of stocks, bonds and other financial instruments

Securities and other financial instruments (stocks, bonds, units of open-end investment companies (SICAV) or mutual funds (FCP), negotiable debt instruments, etc.) are covered by the FGDR's investor compensation scheme.

A guarantee that benefits all bank customers

All bank customers are covered by the deposit guarantee including:

  • private individuals who are adults, minors, under guardianship or represented by a third party;
  • companies of any size regardless of their status, including limited companies (SA), limited liability companies (SARL), one-person limited liability companies (EURL), limited liability individual business owners (EIRL), etc.;
  • associations, civil partnerships (including real estate companies), foundations and other groups of any kind.

 
This coverage is wide in scope in order to strengthen the public’s confidence in the banking system. This is consistent with the goal of preserving financial stability.  
 
However, the laws and regulations provide for some exceptions.

Exceptions: what customers are excluded from the deposit guarantee scheme?

Some legal entities and private individuals are excluded from the deposit guarantee scheme:

  • central governments and administrations, local authorities and their cooperation establishments or groups, supranational institutions;
  • all companies and organisations in the financial sector, particularly credit institutions, investment firms, mutual funds (UCITS), pension institutions, pension funds and other financial institutions;
  • insurance companies; 
  • persons tried for fraud or money laundering. 

Good to know: 
Check your bank account statement. It contains information about the protection by the deposit guarantee scheme and the French government guarantee (Livret type “A”, “LDDS” and “LEP” savings accounts) at the top or bottom of the page or on the back.  

The deposit guarantee scheme for businesses

 How are a business owner's business accounts guaranteed?

Individual business owners (craftsmen, merchants, self-employed professionals, etc.) can open bank accounts for business purposes which are separate from theirpersonal accounts.

If a business owner conducts business through a separate legal entity, for example a one-person limited liability company (EURL), or under the status of a limited liability individual business owner (EIRL), coverage of up to €100,000 is provided under the deposit guarantee scheme for their personal accounts in addition to coverage of up to €100,000 to compensate their business accounts; If a business owner has not created a one-person limited liability company (EURL) or is not a limited liability individual business owner (EIRL) in order to separate their personal and business assets, a single compensation ceiling of €100,000 then applies for all their personal and business accounts.

 

How are deposits guaranteed when the account holder is not the beneficiary?

When the account holder is not the beneficiary (as in the case of multiple owners accounts opened by a professional – real estate agent, lawyer, management agent, etc. – for depositing sums received from clients for payments to third parties), the deposit guarantee scheme covers the beneficiaries (home buyer, lawyer's client, co-owner, etc.), each of whom is compensated up to a ceiling of €100,000, independently of the compensation to which they may be entitled as direct customers of the failed bank, provided these individuals have been identified or can be identified prior to the bank's failure.

How are deposits to a joint signatory account or a partners' account guaranteed?

A joint signatory account is an account that belongs to a group of people who together form an “undivided co-ownership”, none of whom may act independently of the others or claim ownership of a portion of the account so long as the undivided co-ownership exists.

The deposit guarantee scheme covers the undivided co-ownership and not the portion belonging to each of its individual members.  
 
Account holders that have rights as partners of a company, members of an association or a similar group, and are not legal entities (for example, undeclared partnerships and similar groups), are treated as an undivided co-ownership, and therefore as a depositor separate from the partners or members. 
They therefore benefit from a collective compensation ceiling of €100,000 for the accounts in question, in addition to the ceiling applicable to them individually.

 

How are amounts related to factoring contracts protected?

The decree of 18 February 2019 amending the decree of 27 October 2015 on the implementation of the deposit guarantee scheme defines the scope of the sums left in accounts at factoring companies by their customers and covered by the deposit guarantee scheme: this is the total net balance of factoring transactions (TNB), which is therefore used to calculate the customer’s compensation amount in the event that its factoring company fails.
 
The total net balance of factoring transactions consists of the total collections left in the account less drawdowns and commissions due.
When a customer has opened several accounts which themselves consist of several factoring sub-accounts with the same factoring company, the total net balance (TNB) is the arithmetic sum of the net balances of each factoring sub-account. 
 
As of January 2020, customers are informed of the amount of their TNB on each periodic statement provided by factoring companies.

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Learn more

Why has the deposit guarantee scheme become more visible in recent years?

Since 2015 and the transposition of the “DGSD2” Directive, banking institutions have been required to inform customers about the guarantees that protect their savings and other accounts. 
The FGDR has increased its communication with the banking sector and journalists and on social networks.

Banks must now inform their customers more broadly by: 

  • mentioning the protection provided by the deposit guarantee scheme on every periodic statement of covered accounts;
  • giving prospects an information notice about the protection offered by the deposit guarantee scheme before a savings or other account is opened and having them sign it when the covered account is opened; 
  • sending this same notice annually as a reminder.

 
→ Refer to the “The FGDR’s mission/Relations with the general public” section
→ Refer to the “About the FGDR/History” section
→ Refer to the “Document database/Legal texts” section