How safe is your money at the bank?

How safe are your savings at the bank in 2020? The most recent bankruptcies of banks in our country are those of Indover, Van der Hoop Bankiers and of course DSB Bank. SNS Reaal was nationalized in 2013. That is why the question is: how safe is your money and savings with a Dutch bank since the measure by then Minister Wouter Bos to immediately increase the savings guarantee on savings to 100,000 euros per person. This guarantee has been extended and also applies in 2020, but that could change again if the De Wit committee has its way. What is still safe at a bank in 2020 with the outbreak of the coronavirus in 2020 and the problems with the Italian banks?

Guaranteed savings up to a maximum of 100,000 euros

  • Van der Hoop
  • Wft
  • Collective Guarantee Scheme
  • Deposit Guarantee Scheme until 2008
  • The new deposit guarantee scheme 2009 and 2020
  • Business account
  • Some calculation examples
  • The investment portfolio
  • Conclusions savings safe
  • Which banks are safe, the system banks?
  • Role of De Nederlandsche Bank
  • Mortgage and savings bank
  • FAQ Deposit Guarantee Scheme

Van der Hoop

The bankruptcy of Van der Hoop Bankiers and the DSB bank was a tragedy for many. Job away and worries about and loss of money. It was also not an advertisement for the Dutch banks, under Dutch supervision. What if something like that happens again? Dutch banks are solid, the chance of bankruptcy or suspension of payments is not great, but a little caution has not made anyone worse off. In short, what is it like?

Wft

The Financial Supervision Act (Wft) came into force on 1 January 2007. This means that, among other things, the well-known Collective Guarantee Scheme, CGR, and the lesser-known Investor Compensation Scheme, BCR, have been abolished. There are legal successors in force that also have a somewhat different outcome. The most striking differences compared to before concern the guaranteed amount and the deductible. Important to know for every saver and investor.

Collective Guarantee Scheme

The successor to the CGR is the provisions of the Deposit Guarantee Scheme section of the law. This system concerns:

  • Balances on a checking account or savings account and on debt securities registered by the bank. For example, bank and savings bonds.
  • Deposits of securities, interest rate, currency and share swaps or similar agreements.

Deposit Guarantee Scheme until 2008

Based on the old Deposit Guarantee Scheme, an account holder with a credit institution was guaranteed a maximum payment of 20,000 euros. For the next 20,000 euros it was 90%. A saver therefore bore a 10% deductible. This guarantee therefore guaranteed a maximum of 38,000 euros per account holder if 40,000 euros were parked at a bank. Above 40,000 euros the guarantee was zero. This did not alter the fact that a trustee could succeed in extracting additional money from the estate and paying out more to savers. In addition, any claims from account holders/investors will first be offset against any debts owed to the relevant credit institution.

The new deposit guarantee scheme 2009 and 2020

In 2008, then Minister Bos increased the guarantee to 100,000 euros per person, partly through Icesave. The disc system in which 90% was reimbursed was thrown overboard and the maximum amount increased significantly . But you can still have more savings at the bank and it is good to know that not everything is covered by the deposit guarantee scheme. If you have more assets than 100,000 euros per person, you would be wise to spread your savings and assets over several banks.

Business account

The business account may also be eligible for the guarantee scheme. In fact, with some legal forms you can make a double claim on the scheme, because business and private are separated. To a certain extent, a business account is also safe with a bankrupt bank.

Some calculation examples

Example 1 : if you have 120,000 euros in a checking and/or savings account from one bank, only 100,000 euros of this is guaranteed per account holder and 20,000 euros is not . So if a (legal) person maintains multiple checking or savings accounts at a bank or a branch of the bank, payment will be made once. You can submit your residual claim to the curator. A balance on an ‘and/or account’ is divided proportionately among the relevant account holders and added to any other claims of these account holders. Example 2 : If you and two people have 250,000 euros in one account, half of it is considered to belong to one person and the other half to the other person. Each person will then be eligible for a guarantee of 100,000 euros, leaving 50,000 euros uncovered . The guarantee for the securities portfolio is much lower.

The investment portfolio

The new investor compensation system applies to the investment portfolio. This system is more or less separate from the checking and savings accounts discussed above. It stipulates that a maximum of 20,000 euros is guaranteed, depending on the value of your portfolio. Again per person and per institution. The scheme does not serve to compensate for any price losses. Euroclear Netherlands Necigef stores and administers the securities in the Netherlands, so that in the event of a bank bankruptcy. investors have ownership protection.

Conclusions savings safe

Conclusion 1 : suppose you have an investment portfolio of 100,000 euros at a bank, then 20,000 euros of this is guaranteed and 80,000 is not . Conclusion 2 : suppose you have a savings account of 100,000 euros and a portfolio of 100,000 euros at the same bank, then 120,000 euros of this is guaranteed (100,000 euros plus 20,000 euros) and 80,000 is not . Conclusion 3 : suppose you have a joint account and/or account of 100,000 euros for two people and each has a portfolio of 50,000 euros. Then of these 200,000 euros, 140,000 euros is guaranteed (100,000 + 40,000 euros) and 60,000 euros is not.

Which banks are safe, the system banks?

The Guarantee Schemes apply to deposits and investments with banks established in the Netherlands, plus their branches in other Member States of the European Union. So not for deposits and investments at branches of banks located in other EU member states. They have their own national guarantee scheme in the country of residence. The guarantee scheme applies in any case to the large banks in our country, but also to smaller banks, such as MoneYou, NIBC Direct, Anadolubank, Credit Europe Bank. You can normally read on the websites of the banks in question whether or not they are covered by the Dutch guarantee. Furthermore, the State will never let a system bank fail, but will offer help. SNS Reaal is also a system bank, now owned by the state, but there is still a chance that savers will have to pay if things go wrong. No one knows what the consequences will be for banks in 2020, but in March bank stock prices almost halved.

Role of De Nederlandsche Bank

The Dutch Central Bank is a strict supervisor. If the bank finds that a credit institution is unable to meet its obligations, it will call on account holders through advertisements in the newspapers to submit a request for payment. Victims can report to De Nederlandsche Bank for a period of five months. De Nederlandsche Bank will pay out within three months after registration or longer if the bank decides to do so. Therefore, consider how you can protect your money better and more securely and take action.

Mortgage and savings bank

Also note that if you have a debt and a savings balance in the same bank. In the event of bankruptcy, these will usually be offset against each other. This means that the positive savings balance is used to pay off any outstanding debts. Mortgages or otherwise, they can all be settled. You can only avoid such compensation by placing your savings with a different bank than with the bank where you also have debts.

FAQ Deposit Guarantee Scheme

Many questions have been asked in response to this article. The most frequently asked questions are reviewed in a short FAQ:

1. How much savings is guaranteed in 2020?

100,000 euros per person per institution is guaranteed until at least December 31, 2020 . There is now a European scheme with a guarantee of 100,000 euros per person and per institution.

2. If a bank files for bankruptcy, what about the mortgage debt compared to savings?

If possible, savings are offset against the outstanding mortgage debt. If there is a balance remaining on the mortgage, another bank will be sought. If there is any savings remaining, it will be claimed from the Dutch bank.

3. Does a savings mortgage fall under the guarantee system?

A savings mortgage with a bank is possible, but not with an insurer.

4. Does the life-course scheme fall under the guarantee system?

Yes, a life-course scheme also falls under the deposit guarantee scheme.

5. Are minor children their own account holder and therefore insured against losses per person or do we have to add up their capital and include it in our assets?

The savings account in the name of a minor child is also covered by the deposit guarantee scheme. Their accounts are guaranteed separately from yours.

6. Is a subordinated deposit guaranteed?

No, not automatically. This must be considered on a case by case basis.

7. Does the life-course savings scheme or savings salary scheme fall under the guarantee system?

Yes, a balance from the life-course savings scheme or savings salary scheme at a bank is covered by the deposit guarantee scheme.

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