Save - All about the deposit guarantee scheme

Miscellaneous AlexCapownt July 25, 2016 1 18
After the demise of Icesave during the credit crisis, is probably keen every saver that his or her savings in a bank state that can be trusted. Or at least a bank where the money can be removed again from guaranteed when the need arises. Therefore the deposit guarantee scheme is established. First it was roughly the first EUR 38 000 guaranteed that later raised to EUR 100 000.

AFM and DNB: financial supervision

The AFM and the Dutch Central Bank oversee the Dutch financial system. The AFM is looking at the behavior of the various financial players, such as excessive lending and due care. DNB will ensure that the parties that provide financial services in the Netherlands can meet their commitments, in other words whether their operations are safe for our customers. This mainly concerns banks, insurers and pension funds. The executive power is guaranteed by the Act on Financial Supervision. This has been in effect since January 1, 2007. The Act has two key components for consumers: the investor compensation scheme and the deposit guarantee scheme.

Deposit Guarantee Scheme

While the investor compensation scheme provides compensation up to EUR 20,000 per person, the deposit guarantee system goes one step further: namely EUR 100 000. On the website of De Nederlandsche Bank is to see which banks are covered by that system: the so-called credit registry. When a bank has obtained an authorization under the Wft, the deposit guarantee scheme applies to clients of this bank. The saver can assume that banks with headquarters in the Netherlands anyway have a Dutch banking license and therefore in principle the designation "safe".

Which banks are covered by the DGS?

The country's main office is important? As mentioned, is that the Netherlands, it can only be worked with a Dutch banking license. But foreign banks often work with a branch. Banks with their headquarters in the European Union, Liechtenstein, Norway and Iceland are therefore covered by the deposit guarantee scheme of the country of origin. And as we have seen with Icesave, which is not always safe. There are also original foreign banks like Garanti Bank, who operate according to a Dutch banking license. In this case the deposit guarantee scheme applies to their customers.
However, if a saver doubt applies to whether the deposit guarantee scheme for a specific bank, then it is always good to check it. The AFM example, ensures that no false information is provided by banks. So there should not simply be fenced with the guarantee scheme if that can not be fulfilled. Many savers have paid dues during the credit crisis by saving with a foreign bank, while savers with more than EUR 100 000 in Icesave probably can whistle for their money.

What is the deposit guarantee scheme and for whom does it?

The deposit guarantee scheme is mainly intended for individuals and small SMEs. With small SMEs refers to enterprises that must suffice with the publication of an abridged balance sheet. So for example, a financial holding company, a director and major shareholder. The deposit guarantee scheme protects both payment, savings and deposit accounts. The protection applies per person and up to EUR 100,000. Is there an "and / or" account of two persons, eg a couple, it applies in this case a protection of twice EUR 100 000, should that be on that account.
The government wanted especially to protect small savers who do not have the resources to check whether the counterparty meets all requirements. If the unexpected should happen that a bank goes bankrupt, then depositors within three months look to their savings. This was also the period when most of the Icesave depositors got their money back, after filling out the right forms. The fact that the Minister of Finance the deposit guarantee scheme for Icesave still did apply, perhaps to conceive what that DNB stabbing dropped.

When to apply the deposit guarantee scheme?

The previously inspite ancient deposit scheme was replaced on October 7, 2008 by a new scheme, which thus guarantees 100% of the first EUR 100,000. This arrangement applies until at least December 31, 2010. Not later than December 31, 2010 the member states of the European Union are obliged under Directive 2009/14 to establish a deposit guarantee scheme with a minimum coverage of EUR 100 000 per person. For the Netherlands, there will be no impact. At present, the average amount guaranteed by the various countries in Europe EUR 50,000. Netherlands, a country of avid savers, sticks so above that. A country like Germany has an even better arrangement, so that it is also safe save, provided it is shown to the Tax.

To whom is it safe save in the Netherlands: the highest savings?

There are generally three savings banks with the highest interest rate from the bus roles: in particular, AEGON Bank and MoneYou. There is a fragmented supply in the Dutch savings market, even within banks. Savings interest rates change regularly. But banks do like each other quite closely. This leaves many savings rates are close together, at least one savings account in the range. An update of the highest savings can be found in "Safe save against the highest interest rate in the Netherlands."
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