Many Germans have their money in their checking accounts.
In the course of the bank failures in Switzerland and the USA, Germans are worried about their money in their checking accounts. How safe is it actually?
As a rule, deposits are secured up to EUR 100,000.
Investing money profitably and above all safely is a real challenge in turbulent times like these. What many do not consider, however, is that the assets not invested in the capital market in the checking or call money account are not automatically kept 100 percent crisis-proof.
This applies primarily to those of you who park more than 100,000 euros in a single account. Because the so-called statutory deposit insurance only protects customer deposits up to this amount. The mechanism takes effect, for example, if your bank goes bankrupt. It doesn’t matter whether you are a customer of a private bank, a savings bank or a cooperative bank.
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You are on the safe side with overnight money, fixed deposits, and savings accounts
However, the prerequisite is that the respective institute is a member of a European deposit guarantee system, says the consumer advice center. It is also important that you have invested the money in an account that is considered a so-called “deposit”. You are on the safe side with overnight money, fixed-term deposits, savings accounts or various savings contracts. Also, the currency doesn’t matter.
In addition, this regulation applies to every so-called bank-customer combination. Therefore, caution is always advisable if, for example, you have multiple accounts with different brands at the same bank. Then, in an emergency, you will not be compensated with a maximum of 100,000 euros per account, but only once. The money guide also refers to this important fact financial tip: “In the case of banks that belong together, such as Deutsche Bank and Postbank, your protection amount will be divided up,” it says there.
In addition, Hendrik Buhrs from Finanztip points out in an interview with Business Insider that savings banks, cooperative banks and some German private banks also have a voluntary, institute-specific guarantee in addition to the statutory deposit guarantee. “Deposits of usually several million euros (at the larger private banks) or in unlimited amounts (at savings banks and cooperative banks) are protected here,” he says. As a customer, however, you have to know that you have no legal right to compensation from these pots in an emergency: “In particular, all those who are well above the 100,000 euro limit must be aware of this risk,” says the expert.
As far as the statutory deposit insurance is concerned, “Finanztip” also points out that the guaranteed sum can increase to up to EUR 500,000. Namely, if a person has a lot of money in the account due to special circumstances. For example, after the sale of a property you use yourself, after a divorce, when you retire, after a severance payment or termination, or in the event of disability. It is important to note that this increased scope of protection only applies for six months after the money has been credited to the account.
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That’s how reliable the insurance is
The all-important question for you investors and savers is, of course, now: Can you rely on this 100,000 euro compensation even in the event of a crisis? “Yes!” says Niels Nauhauser, head of the department for old-age provision, banks and loans at the consumer advice center in Baden-Württemberg, in an interview with Business Insider: “Even in the event of a bank failure, savers’ deposits are very good within the framework of the statutory deposit insurance secured provided they do not exceed the security limit of EUR 100,000 per person.”
What many do not know: In the euro area there are still only national deposit insurances. That is why Nauhauser advises all German investors who attach great importance to security to only keep their money with institutions that are protected by the German statutory deposit insurance. You can find them on the website “edb-banken.de“ look up.
Disclaimer: Stocks and other investments are always associated with risk. A total loss of the invested capital cannot be ruled out either. The published articles, data and forecasts are not an invitation to buy or sell securities or rights. They also do not replace professional advice.