Banking
Deposit guarantee scheme
Also known as deposit insurance, deposit protection scheme
A deposit guarantee scheme is a statutory arrangement that repays depositors up to a set limit if a bank fails — $250,000 per depositor per bank per ownership category in the United States, €100,000 in the European Union, and £85,000 in the United Kingdom.
In plain terms: The government-backed promise that you get your money back if the bank goes under, up to a cap.
Why it matters
The limit applies per bank rather than per account, so several accounts at one institution share one guarantee. Many jurisdictions marketed for offshore banking have no scheme at all, which leaves depositors as ordinary unsecured creditors in a liquidation.
Common misunderstanding
Assuming money at an e-money or payment institution is covered. It is safeguarded rather than insured, which is a different legal position with a slower and less certain outcome.
Read the full guideDeposit protection and bail-in