Deposit protection
General information
ESA
In Austria, deposit protection and investor compensation are regulated by the Deposit Guarantee Schemes and Investor Compensation Act (Einlagensicherungs- und Anlegerentschädigungsgesetz – ESAEG). These provisions represent the transposition of corresponding EU directives into national law.
Since January 1st 2019, investor compensation for all Austrian credit institutions is performed by Einlagensicherung AUSTRIA Ges.m.b.H (DGS AUSTRIA). Exceptions are the members of the institutional protection system of ERSTE Bank and savings banks. Those banks are protected by S-Haftungs GmbH.
Every Austrian credit institution that wishes to provide investment services subject to compulsory coverage must belong to one of these two protection schemes, otherwise its licence to provide investment services subject to compulsory coverage will expire. The licenses of all Austrian credit institutions can be checked on the website of the Financial Market Authority (FMA). The ownership structure of a credit institution is irrelevant for investor compensation; the existence of an Austrian license is essential.
Legally dependent branches of banks that provide investment services in Austria under the freedom of establishment and the freedom to provide services and which therefore do not have an Austrian banking license are subject to deposit protection in the country in which the bank is domiciled. Therefore, any claims must always be asserted in accordance with the legal provisions of the country of domicile.
Frequently asked questions on deposit insurance
Which deposits are covered by the deposit guarantee scheme?
In principle, all deposits on all interest-bearing or non-interest-bearing accounts or passbooks, such as salary and pension accounts, other current accounts, fixed-term deposits, capital savings accounts or savings books payable on demand, are eligible.
Are only deposits of Austrian citizens covered?
No, the nationality of the depositor is irrelevant. Therefore, deposits of customers who are not Austrian citizens are also covered.
Are credit balances in a joint account covered?
A joint account is not held by one customer, but by several customers. The fundamental principle that deposits up to EUR 100,000 per credit institution and per person are covered, regardless of the number of accounts or passbooks, is still applicable. Therefore, provided that all account holders are authorized, the maximum payout amount of EUR 100,000 (multiple payout) applies to each account holder. The credit balance on the joint account shall be distributed equally among the account holders.
For example, if there is a deposit of EUR 200,000 in a joint account with two account holders, the two account holders can each claim an amount of EUR 100,000 in the case of deposit protection.
However, the account holders may, prior to the payout event, submit to the bank a written agreement on the division of the deposits in the joint account in the event of a payout, and thus depart from the principle of division in equal parts. This distribution key is then to be used exclusively in the payout event and has no effect on the disposition authorizations agreed with the bank outside the payout event.
The same applies analogous to joint savings books. In this case, it must also be concerned that savings books must be presented before the secured amount is paid out and any agreed password must be stated.
What are temporary high balances?
In certain cases, you can apply to the protection scheme within 12 months of the payout event to have your deposits refunded beyond the general maximum amount of EUR 100,000 up to a total of EUR 500,000.
To do so, you must prove to the protection scheme that your deposit either
- originates from real estate transactions in connection with privately used residential property, or
- fulfils social purposes provided for by law and is linked to certain life events of yours, such as marriage, divorce, retirement, termination, dismissal, disability or death, or
- is based on the payment of insurance benefits or compensation for bodily injury resulting from criminal offences or a false criminal conviction.
In all these cases, the payout event must occur within twelve months of the amount being credited or of the date on which the deposit can be transferred in a legally permissible manner.
When do I receive my money in the event of a payout event?
My covered deposits amount to a maximum of EUR 100,000
The protection scheme generally pays out the covered deposits within the statutory period of 7 working days. An application on your part is not necessary. However, the Protection Scheme must be notified of the account to which payment is to be made.
This deadline may be exceeded, for example, if
- your claim for compensation is in dispute;
- the deposit is subject of litigation;
- it is a deposit made in connection with a fiduciary transaction.
For details of these exceptions, please refer to article 14 (2) Deposit Guarantee Schemes and Investor Compensation Act.
My covered deposits amount to more than EUR 100,000
If your deposit is a temporary high balance within the meaning of article 12 Deposit Guarantee Schemes and Investor Compensation Act (see above "What are temporary high balances?"), you must
- submit an application for compensation to the Protection Scheme within 12 months of the occurrence of the payout event;
- prove to the Protection Scheme that all requirements of article 12 Deposit Guarantee Schemes and Investor Compensation Act are met.
Payment will be made after your claim has been reviewed by the Protection Scheme. In a payout event, a corresponding form will be available on the website of the Protection scheme.
CAN MY BANK EXIT THE PROTECTION SCHEME OR CHANGE IT?
A credit institution may only exit it's protection scheme if it joins another protection scheme at the same time.
If a credit institution withdraws from the Protection Scheme without joining another Protection Scheme, its license to accept new deposits expires. Existing deposits remain covered by the Protection Scheme that was previously responsible.
