deposit insurance

Deposit Insurance System

deposit insurance

Nordea Bank was one of the first Russian banks that joined the Deposit Insurance System, its registration number in the System is 28.

The statutory individual bank deposit insurance system (DIS) is a special governmental programme of the Russian Federation implemented in compliance with the Federal Law dd. 23.12. 2003 No.

177-FZ “On Insurance of Individual Deposits with the banks of the Russian Federation”.

Its primary goal is to protect individual savings placed on deposits and accounts with the Russian banks inside Russia.

The guarantor of money repayment to a depositor is the Russian Government.

A depositor is not required to enter into a separate insurance agreement; it is secured by operation of law. Funds in roubles and foreign currencies deposited by individuals with a bank pursuant to a bank deposit agreement or a bank account agreement are insured, including capitalized interest (accrued interest added to the deposit), as well as the funds placed into:

  • demand and term deposits ;
  • bank accounts for receiving salaries, pensions, scholarships and social benefits, including with the use of bank cards;
  • accounts (deposits) of unincorporated individual businessmen (as from 1 January 2014);
  • nominal accounts of guardians or trustees, where the beneficiaries are their wards;
  • escrow accounts opened for making settlements under real estate transactions (as from 2 April 2015)
  • escrow accounts opened for making settlements under shared construction participation agreements (as from 1 July 2018);
  • deposits evidenced with savings certificates;
  • deposits made by small businesses as defined in the Russian Law and registered in the Unified Small and Medium-sized Businesses Register (as from 1 January 2019).

The insurance shall not cover:

  • bank accounts (deposits) of lawyers, notaries and other persons, if such accounts (deposits) were opened for carrying out professional activity in accordance with the Federal law;
  • deposits evidenced with deposit certificates;
  • funds in trust with banks;
  • deposits with foreign branches of the Russian banks
  • e-money;
  • nominal accounts, except for those opened by guardians or trustees and whose beneficiaries are their wards, pledged accounts and escrow accounts (except escrow accounts opened for making settlements under real estate transactions or settlements under shared construction participation agreements);
  • subordinated deposits;
  • deposits made by or in favour of legal entities, except entities lawfully qualified as small and medium-sized businesses under the Russian Law and registered in the Unified Small and Medium-sized Businesses Register.

A depositor becomes entitled to compensation of his/ her/ its/ deposits on the date of the insured event.

The insured events are:

  1. the bank’s banking license issued by the Bank of Russia has been withdrawn (terminated) unless Deposit Insurance Agency participation plan is implemented within the bank’s financial rehabilitation;
  2. the Bank of Russia has imposed moratorium on the settlement of claims towards creditors.

Upon occurrence of an insured event a deposit with the Bank is to be compensated in size of 100% of the deposit amount with a bank, however, the total compensation shall not exceed RUB 1,400,000 (applicable to the insured events occurred after 29 December 2014).

If a customer has more than one deposit with the same bank, the deposit compensation shall be paid pro rata the amounts of such deposits but the total compensation for all deposits should be no more than RUB 1,400,000.

This condition is applicable to all deposits made by a depositor (in favour of a depositor) with one bank including those made for doing lawful business activities (except escrow accounts opened for making settlements under real estate transactions or settlements under shared construction participation agreements).

To get compensation for deposits a depositor (his/ her/ its representative) or heir (his/ her/ its representative) may apply to the Deposit Insurance Agency or an agent bank if such is involved in the deposit compensations payments.

A depositor may exercise this right in the period from the date of the insured event occurrence to the bankruptcy proceedings completion date (forced liquidation completion date) and moratorium completion date if the Bank of Russia imposed moratorium on the settlement of claims towards creditors.

Please note that it is necessary to timely inform the Bank about any changes in the information that was provided when making the deposit agreement or account agreement, i.e.:

IndividualsLegal Entities*
  • Last name, name, patronymic
  • Registered place of residence
  • Address for postal notices
  • Identity document type and details of the individual depositor
  • Telephone
  • Name
  • Registered place of business
  • Address for postal notices
  • Information on representatives authorised to represent the legal entity without a power of attorney
  • Telephone

*Legal Entities means entities lawfully qualified as small-sized businesses (including micro-businesses) under the Russian Law and registered in the Unified Small and Medium-sized Businesses Register.

Failure to do the above may result in longer consideration of the depositor’s claim to get compensation of his/ her/ its deposits, rejection thereof if the Bank or Deposit Insurance Agency is unable to identify the depositor (his/ her/ its representative authorised to represent an entity without a power of attorney).

Please see details of the compensation procedure and amount at the Deposit Insurance Agency website: http://www.asv.org.ru/

Источник: https://www.nordea.ru/en/private/deposits/system_of_insurance.php

13 points about Bank Deposit Insurance and How to increase it legally

deposit insurance

You might have received Whatsapp forward or read somewhere on social media about a new proposed Financial Resolution and Deposit Insurance Bill (FRDI) which has a “Bail-in” clause where in case of bank failure, depositors money fixed deposits, savings bank account, etc can be used to absorb bank losses.

This is just a proposed bill and it has not passed as law but still this has made every depositor very worried. Unfortunately many even may not know how safe are their deposits right now mainly because RBI made sure that most depositor have not lost money in any large bank failures.

We tell you about Bank Deposit Insurance and How to increase it legally!

1.Bank Deposit Insurance is covered by Deposit Insurance and Credit Guarantee Corporation (DICGC) which is subsidiary of RBI.

2. The maximum deposit insurance cover is for Rs 1 lakh per customer per bank.

3. The insurance premium is paid by banks and depositors are not charged for the same.

4. The Deposit insurance was introduced in 1962 and the maximum cover was Rs 1,500.

Also Read: Highest Interest Rate on Bank Fixed Deposits (FD)

5. The Rs 1 Lakh limit was set in year 1993 and has not been revised for 23 years. Assuming modest 6% inflation the insurance amount should have been raised to Rs 4 Lakhs. I hope RBI is listening!

6. Earlier the insurance amount was revised regularly. Here is the deposit Insurance over the years:

  • 1962: Rs. 1,500
  • 1968 : Rs.5,000
  • 1970 : Rs.10,000
  • 1976 : Rs.20,000
  • 1980 : Rs.30,000
  • 1993 : Rs.1,00,000

7. Understanding 1 Lakh limit: The 1 lakh limit covers all your deposit with the bank in form of savings account, fixed deposit, current account, recurring deposit, etc. and any interest accrued. For e.g.

If you have Rs 10,000 in your savings account and Rs 85,000 in fixed deposit and Rs 9,000 as interest due on your fixed deposit – you would still get Rs 1 Lakh even though your total amount due was Rs 1.04 lakhs (10,000 + 85,000 + 9,000).

Also Read: 21 Hidden Charges in Saving Bank Account

8. The Rs 1 lakh deposit insurance covers each bank and it does not treat different branch of the same bank separately.

So if you have Fixed deposit of Rs 90,000 in SBI, Delhi and Rs 75,000 in SBI, Gurgaon – in case of bank default you would be paid Rs 1 Lakh only – as the deposit insurance is at bank level and not branch level.

In a different scenario if you have Rs 90,000 FD with SBI, Delhi and Rs 75,000 FD with ICICI bank, Delhi – in case of both bank defaults – you would be paid separately for both i.e. Rs 90,000 for SBI and Rs 75,000 for ICICI.

9. The amount paid to depositor would be net of any dues payable to the bank. For e.g. as in the case above if you had to pay bank Rs 20,000 personal loan. You would be paid back Rs 1,04,000 – 20,000 = Rs 84,000 only.

10. The DICGC is liable to pay the insurance amount within two months of receiving the depositors list from the bank.

11. As of today all banks including commercial banks, local area banks, rural banks, foreign bank branches and co-operative banks in India, are covered under this scheme of DICGC except the co-operative banks of Meghalaya, Chandigarh, Lakshadweep and Dadra & Nagar Haveli.

12. There are some banks which are de-registered. You can get the list on DICGC website. Almost all these banks are co-operative banks which is a huge risk.

Also Read: Which bank offers highest interest rate on savings account in India?

13. The insurance is “same right and same capacity” as on the date of bank default.

Bank Deposit Insurance and How to increase it legally?

Understanding “Same Right and Same Capacity”

This is an important concept and can help you enhance the deposit insurance legally.

As stated above all deposits i.e. savings, current, FD, RD, etc. across various branches of the bank, held by you in your individual name, would be treated as in “same right and same capacity” and considered as one total amount for insurance purposes.

But would be treated as held in “different right and different capacity” in following cases:

  • Account held in the capacity of a partner of the firm
  • As a guardian of a minor
  • As a director of a company
  • As a Trustee
  • As a Joint Account

And so each of them would be separately insured as shown in the example below.

Illustration – Different Right and Different Capacity for Deposit Insurance

Deposit Insurance for Joint Accounts:

If you hold joint account, the sequence of name is considered as different entity. So if you have two joint accounts with your spouse where in one case you are first holder and in second case your spouse is the first holder, both accounts would be considered as 2 entities and separate deposit insurance would apply.

Also Read: Where to Park Money for Very Short Term?

How can you enhance your Deposit Insurance?

Taking example of 3 people in the family – husband, wife and child (H, W, C) – how much can be the max deposit insurance cover?

  1. Individual accounts – H, W, C – 3 entities possible
  2. Joint accounts for 2 (H,W) (W,H)  etc – 6 entities possible
  3. Joint account for 3 (H,W,C) (W,H,C) etc – 6 entities possible

Theoretically if you use all combinations within family of 3, you can get deposit insurance up to 15 lakhs in one bank. If you use multiple banks, it would increase manifold.

The table below gives an illustration of the possibilities:

Illustration – Joint Account for Deposit Insurance

But here is the word of caution – it would be nightmare to maintain so many accounts. In case of joint account the tax liability is of the first account holder and tax clubbing provisions would apply if it’s your money in all the accounts.

Also Read: How safe is your Bank Fixed Deposit?

Also there have been cases where the defaulting bank does not send depositor information to DICGC on time and so depositors keep on waiting.

So even though there is a safety net, you should choose the right bank so that you do not struggle if there is a default.

Источник: https://www.apnaplan.com/bank-deposit-insurance/

Federal Deposit Insurance Corporation (FDIC) — What is Federal Deposit Insurance?

deposit insurance

The FDIC stands for Federal Deposit Insurance Corporation and is an independent agency of the United States government. Its function is to protect the funds that depositors place into banks and savings associations. It is backed by the US government and has been around since 1933. Since the establishment of the FDIC, no depositor has ever lost any money in a US bank.

What Does it Protect?

The FDIC protects various accounts in your bank, but not all. For example, if you have a checking account, it will be protected.

If you have a savings account, that will be protected too, while Money Market Deposit accounts and Certificates of Deposit are also protected.

However, the FDIC does not protect other financial products that your bank may offer, such as stocks, bonds, mutual funds, life insurance policies, annuities, or other securities. This insurance is meant only for the most basic of investment and savings vehicles.

The greatest aspect to this insurance is that you don’t have to apply for it. By simply having one of the deposits covered, you are already enrolled into the insurance program. By being served by an FDIC covered bank, you are automatically using the insurance.

It should be noted that credit unions are not covered by the FDIC, but they have their own version of it called the National Credit Union Share Insurance Fund. This was created by Congress in 1970 to serve the same function.

If you are in a credit union, simply look for the NCUA sticker (National Credit Union Association).

How Much Does It Protect?

The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. As an example, let’s say you have $50,000 in Bank A, in a checking account. Across the street, you have $27,000 in Bank B, in a savings account.

You would be completely covered on both of these accounts by the FDIC’s insurance.

However, things could get a little bit more complicated if you are a wealthier individual, because you are much more ly to have account balances that could stretch the limits of insurance.

Let’s take an alternate scenario. You have $275,000 in a checking account, $26,000 in a savings account, and a $5,000 certificate of deposit in a bank. If the bank becomes insolvent, you would be covered for $250,000 in your checking account, leaving a loss of $25,000.

However, the entire $26,000 in savings and $5,000 in the certificate of deposit would both be covered. It is because of this that wealthier clients typically will use other insurance vehicles to protect deposits, or simply break up their deposits with separate banks.

In this example, the depositor would have been better served to deposit $250,000 in their checking account at Bank A, and a $25,000 deposit into a separate checking account at Bank B.

Keep your money safe in a NBKC savings accountSign-up today!

My Bank Has Failed. What Happens Now?

If you are under the $250,000 level in these applicable accounts, rest assured your money is safe. However, it doesn’t happen immediately. Typically, the insurance gets paid to depositors within a few days after a bank closing.

In fact, quite often it happens the very next business day by either providing each depositor with a new account at another insured bank in the equal amount, or by issuing a check to each depositor for the insured balance of their account at the failed bank.

Some deposits that exceed $250,000 and are linked to trust documents or deposits established by a third-party broker, may have a short wait so that their accounts can be reviewed to determine the amount of deposit insurance coverage available to them. The amount of time will depend on how long it takes for the depositor to provide supplemental information to the insurer so that they can complete the insurance determination.

If you do find yourself in a scenario where you have more than the insured funds, the FDIC will typically be given the task of selling or collecting the assets of the failed bank in settling its debts, including your claim.

You may see some of your deposit returned after assets are sold or the settlement of the liquidation.

At this point though, you should never find yourself in this situation as you should simply stay under the limit at various banks or use different vehicles, such as checking accounts, savings accounts, and a certificate of deposit to make sure that you fall underneath the required limit.

I Have a Few Other Deposits that I’m Not Sure About

If you find yourself in a situation where you aren’t entirely sure about your deposit being protected through insurance, there is a simple way to find out.

You can go to the FDIC’s Electronic Deposit Insurance Estimator on their website and enter information about each of your accounts. Otherwise, you can call the FDIC itself to ask these questions.

Remember that it is better to be safe than sorry!

Источник: https://www.investing.com/money/banking/is-your-money-safe-understanding-the-fdic-deposit-insurance-55

Insurance of deposits for private customers | Medicinos Bankas

deposit insurance

In principle, all deposits of individual and business depositors are insured by the State Enterprise Indėlių ir investicijų draudimas.

The exemptions for certain deposits are indicated on the website of the State Enterprise Indėlių ir investicijų draudimas www.iidraudimas.lt. On your request, the credit institution shall also inform you if certain products are insured. If the deposits are insured, the credit institution confirms it in the statement of account.

The deposit insurance does not include:

  • Deposits of other credit institutions held at one’s own expense and in one’s own name

  • The credit institution’s own funds

  • Deposits in relation to which there has been a conviction of a criminal offence for money laundering

  • Deposits of financial institutions

  • Deposits of management companies

  • Deposits of financial brokerage firms

  • Deposits with no identifiable holders (deposits held in anonymous and encrypted accounts)

  • Deposits of insurance companies and reinsurance companies operating under the Law on Insurance of the Republic of Lithuania

  • Deposits of collective investment entities

  • Deposits of pension funds 

  • Deposits of state and municipal institutions and entities as defined by the Law on the State Service of the Republic of Lithuania, with the exception of funds of other persons held in the deposit accounts of such institutions and entities

  • Bank of Lithuania deposits

  • Debt securities and liabilities related to his acceptances and ordinary bills issued by the participant himself of the deposit insurance system

  • Electronic money and funds received by electronic money institutions from electronic money holders to exchange electronic money

Limitations on payment of deposit insurance benefits:

  • Deposit insurance benefits are not paid:

    1) for deposits, funds, money, securities and liabilities other than the object of the deposit insurance (as indicated above in this form);

    2) to depositors for deposits in an account in which during the last 24 months prior to insured event of the deposit no deposit transactions have been performed and the amount of deposit is less than €10.

  • The payment of deposit insurance benefits is suspended when the depositor or another person claiming the right to the deposit insurance benefit is charged with money laundering until the final court decision becomes effective.

Deferral of the Deposit Insurance Benefit Payment

In cases provided by the Law of the Republic of Lithuania on Insurance of Deposits and Liabilities to Investors (see www.iidraudimas.lt), the payment of the deposit insurance benefit may be delayed, for example, if the data justifying the right to the deposit insurance benefit, either due to a legal dispute or the depositor has a limited right to manage the deposit.

Detailed information on deposit insurance conditions and cases where deposits are not insured and when restrictions on payment of deposit insurance benefits are imposed is available on the website of the State Enterprise Indėlių ir investicijų draudimas www.iidraudimas.lt.

Источник: https://www.medbank.lt/en/private/savings/deposit-insurance

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