How is deposit guarantee compensation paid?  

If a Finnish deposit bank were to experience financial difficulties and become insolvent, the money you have deposited will be returned to you via bank transfer within 7 working days. The protection is statutory and automatic.

In the event of compensation, the deposit guarantee compensation will be paid by bank transfer to the account specified by the depositor. The maximum amount of compensation is EUR 100,000 per depositor per deposit bank.

Infographic illustrating the deposit guarantee process: the bank is declared insolvent, the Financial Stability Authority decides to pay compensation, the bank submits depositor and account information to the FFSA, which calculates the compensation, sends decisions to depositors, and pays the compensation to their accounts within seven days.

Chart: This is how deposit guarantee works in Finland

How does a compensation event emerge? 

 
Bankruptcy of a deposit bank 

A compensation event emerges, for example, when a deposit bank is declared bankrupt. The court notifies the Financial Stability Authority, which then decides on the reimbursement of deposits.  

Other potential scenarios in which a compensation event emerges 

If a deposit bank has not paid matured and undisputed compensable deposits, the depositor may report the matter to the Financial Stability Authority. The Authority must then issue a decision on the payment of compensation within five working days. 

A compensation event can also begin by a deposit bank being deemed insolvent by a decision of the authorities.  

The two-stage decision-making process in compensation events 

The Financial Stability Authority’s decision-making process consists of two stages. In the first stage, the Authority decides on whether compensation will be paid for the deposits, i.e. whether the compensation process will be initiated. In the second stage, once the process has been launched, the Authority issues individual compensation decisions for each depositor, which are sent to all depositors of the bank.

The FFSA’s decision on compensation for deposits  

When a potential compensation event emerges, the Financial Stability Authority decides whether compensation for the deposits will be paid from the Deposit Guarantee Fund. The decision is made in cooperation with the Financial Supervisory Authority and the Bank of Finland.  

The Financial Stability Authority issues a positive compensation decision if, based on the information received, the non-payment of deposits is caused by the bank’s insolvency or other financial difficulties and the Authority estimates that the difficulties in question are not temporary. 

The Financial Stability Authority issues its decision within five working days of being notified of the potential compensation event. 

The FFSA’s decisions on deposit guarantee compensation for each depositor

The Financial Stability Authority issues depositor-specific compensation decisions based on information received from the deposit bank. If the depositor’s right to deposit guarantee compensation and the compensation amount can be directly ascertained from the information received from the bank, the FFSA issues the decision on deposit guarantee compensation by means of an automatic decision-making procedure within one week of the FFSA’s decision to pay compensation for deposits. Depositors do not need to apply for compensation separately. 

If the depositor-specific compensation decision requires discretion by the Financial Stability Authority (FFSA), the decisions are made manually. In this case, the FFSA issues the decisions within three months of deciding on the payment of compensation. This applies in the following situations, for example:

  • The depositor’s right to compensation is unclear 
  • The depositor’s right to use the deposit has been restricted by a decision of the authorities 
  • The depositor’s receivables are assets obtained from the sale of a residence

If the depositor uses the suomi.fi messaging service, they receive the decision on deposit guarantee compensation quickly in the suomi.fi electronic mailbox. Otherwise the depositor is informed of the decision by mail. All communication concerning deposit guarantee decisions can be handled quickly and easily via the electronic service.

How quickly is compensation paid? 

The Financial Stability Authority pays compensation within seven working days of making the compensation payment decision. This is possible because the payment of compensation is an almost entirely automated process. Deposit guarantee compensation is paid by means of a bank transfer, which means the depositor can quickly access the compensation.  

What do depositors need to do in a compensation event? 

The Financial Stability Authority receives information on depositors and deposits to be compensated directly from the bank and issues decisions on deposit guarantee compensation based on the information provided by the bank. If necessary, the FFSA will contact the depositor to request additional information. Depositors do not need to submit information on their deposits to the Financial Stability Authority.Depositors also do not need to apply for compensation, as deposit guarantee compensation is paid out without a separate application. 

In a compensation event, the FFSA requests depositors to provide an account number to which the deposit guarantee compensation should be paid. The account number can be sent electronically by the depositor verifying their identity on the suomi.fi service or by submitting a paper notification form. Electronically submitted account numbers reach the FFSA quickly and securely, enabling the FFSA to pay the compensation without delay. For depositors who use a paper notification form, the payment of compensation takes a little longer. The FFSA never requests depositors to provide personal information or account numbers by e-mail. 

More information and answers to other questions concerning the deposit guarantee scheme