Deposit insurance is a protection mechanism that safeguards bank deposits of private customers up to legally or contractually defined limits.
In the European Union, statutory deposit protection currently covers up to €100,000 per customer and per bank. In addition, many countries have voluntary protection schemes that may cover amounts beyond this limit.
Deposit insurance applies primarily in the event of a bank insolvency and is designed to ensure that savers do not lose their deposited funds.
For investors, it is an important factor when selecting banks, account types, and custodial institutions. In wealth management, deposit protection is relevant because it affects the security of cash holdings and savings deposits, and it should be considered when distributing larger amounts of capital across multiple institutions.
