The deposit guarantee scheme safeguards depositors’ assets in their account if the deposit bank is declared insolvent. If a 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.
The Financial Stability Authority is responsible for the deposit guarantee scheme in Finland. If a deposit bank is declared bankrupt or is in permanent default, the Financial Stability Authority assesses the situation and issues a decision on whether to commence the payment of compensation as well as decisions on the compensation amounts.
The Financial Stability Authority pays compensation to the bank’s depositors from the Deposit Guarantee Fund. The FFSA administers the Deposit Guarantee Fund in Finland.
Provisions on the deposit guarantee scheme are laid down by the EU Deposit Guarantee Schemes Directive, which has been transposed into national law.
As a rule, the deposits of all depositors are protected under the scheme. Deposit guarantee is personal. It applies separately to the deposits of each family member – including minors – and each joint owner of a deposit account. Note that merely having the authority to use an account is not the same as being the account owner.
All private persons are within the scope of the deposit guarantee scheme. It is not tied to the depositor’s citizenship or place of residence. The estates of deceased persons, companies regardless of their company form and size, registered associations and foundations are also depositors.
As a rule, the deposits of companies and associations are within the scope of the deposit guarantee scheme, but self-employed entrepreneurs (i.e. sole proprietors) do not have an independent deposit guarantee for their business-related deposits. Consequently, the business-related deposits and personal deposits of a self-employed entrepreneur are treated as a single depositor’s deposits when calculating the compensation amount.
The deposit guarantee scheme only applies to deposits. This includes ordinary bank accounts, for example. As a rule, deposits by all depositors – meaning account owners – are covered by the deposit guarantee scheme. Examples of deposits include current accounts, savings accounts and home savings incentive accounts.
The maximum compensation amount is EUR 100,000 per depositor and deposit bank. Savings banks and cooperative banks that are members of an amalgamation of deposit banks are considered as one deposit bank.
Assets obtained from the sale of a residence are an exception to the main rule on the guaranteed amount. They are compensated, subject to a separate application, with no upper limit when the depositor can prove that the assets were obtained from the sale of a residence that was in the depositor’s own use and that the assets were deposited on the account no more than six months earlier and are intended for the purchase of a new residence for the depositor's own use.
In case of the bankruptcy of a bank, the deposit guarantee fund compensates for deposits up to a maximum of EUR 100,000. The depositor can claim the amount exceeding this maximum amount from the bankruptcy estate. However, this involves uncertainty and is affected by the assets of the bankruptcy estate and the number of creditors. Claiming deposits exceeding EUR 100,000 from the bankruptcy estate does not require any action by the depositor.
Assets obtained from the sale of a residence are an exception to the main rule on the guaranteed amount. They are compensated, subject to a separate application, with no upper limit when the depositor can prove that the assets were obtained from the sale of a residence that was in the depositor’s own use and that the assets were deposited on the account no more than six months earlier and are intended for the purchase of a new residence for the depositor's own use.
In a compensation event, the insolvent bank provides information to the Financial Stability Authority of all accounts and depositors. The Authority processes the information and sends a compensation decision to each depositor based on the information.
In the compensation decision, the depositor is provided with instructions on what action they need to take to receive the deposit guarantee compensation. The Authority then pays the compensation to the account indicated by the depositor.
The deposit guarantee scheme covers each owner of a joint account separately. If a depositor has assets in a joint account, the balance of the joint account is divided evenly between the account owners in a compensation event and the deposit guarantee compensation is paid separately to each account owner’s share. If a joint account’s terms of use include “the OR provision”, it does not mean that only one of the account owners will be compensated.
The deposit guarantee scheme only covers deposit products. Investment products, such as shares, are not within the scope of the deposit guarantee scheme. Equity portfolios are in the custody of the bank and are not part of the bankruptcy estate if the bank is declared bankrupt. Book-entry securities accounts are not within the purview of the Financial Stability Authority.
Instead, the administrator of the estate makes the relevant decisions in accordance with the Bankruptcy Act, Act on Book-Entry Accounts and Act on Equity Savings Accounts. More information on guarantees concerning investment instruments is available from their providers
Cash assets in an equity savings account are within the scope of the deposit guarantee scheme. The deposit guarantee scheme does not, however, safeguard investment instruments under an equity savings account agreement or the returns earned on investments.
The deposit guarantee scheme only covers deposit products. The potential principal protection components of other products are not guaranteed by the deposit guarantee scheme. More information on guarantees concerning investment instruments is available from their providers. Banks have an obligation to provide their customers with sufficient information on deposit guarantees.
You can find more information on the deposit guarantee scheme on this website. Banks also have an obligation to provide their customers with sufficient information on deposit guarantees.
If necessary, you can contact the Financial Stability Authority by e-mail at talletussuoja(at)rvv.fi or by telephone on +358 (0)295 253 530.