Deposit guarantee in Finland

Deposits are protected by a statutory deposit guarantee scheme, which is maintained in Finland by the Financial Stability Authority. Deposit guarantee protects depositors’ assets in the event that a deposit bank becomes permanently insolvent. 

How does the deposit guarantee scheme work? 

If a Finnish deposit bank is declared bankrupt or is in permanent default, the Financial Stability Authority pays compensation to the bank’s depositors from the Deposit Guarantee Fund. Deposit guarantee compensation is paid within seven working days of the authorities ruling that the bank is insolvent and the Financial Stability Authority issuing a decision on compensation for deposits. Depositors do not need to apply for compensation separately.

Compensation for guaranteed deposits amounts to a maximum of EUR 100,000 of a depositor’s deposits in one bank.Banks that have partial or full responsibility for each other’s commitments and obligations are considered as one bank under the deposit guarantee scheme. Such banks include the member banks of OP Financial Group, the Savings Banks Group and the POP Bank group.

The deposit guarantee scheme covers all deposits by private persons as well as most deposits by companies, associations and foundations.

The Financial Stability Authority maintains the Deposit Guarantee Fund from which compensation is paid. The fund’s assets are collected from deposit banks.

Chart: This is how deposit protection works in Finland

Deposit guarantees have been harmonised in the European Union 

The deposit guarantee schemes of EU Member States have been harmonised. Deposit guarantees are governed by the EU Deposit Guarantee Scheme Directive, which includes harmonised provisions concerning rapid payment, depositors and deposits to be protected as well as the maximum compensation amount of EUR 100,000. 

The Deposit Guarantee Scheme Directive and the national legislation to implement the Directive ensure that deposits with deposit banks are always covered by some deposit guarantee scheme in the EU. As a rule, the authority responsible for deposit guarantees is the deposit guarantee scheme of the bank’s home country.