The purpose of the Deposit Guarantee Fund is to guarantee all amounts deposited into savings accounts, current accounts, certificates of deposit, as well as deposits in equities (for example, stocks or bonds) held in the credit institutions up to a maximum limit of €100,000 per institution and account holder. The deposits that are made in a currency other than the euro are guaranteed in the amount equivalent to €100,000, relative to the corresponding exchange rate.
Moreover, the Deposit Guarantee Fund covers other exceptional cases independently of the above coverage. However, we should note that this is only for three months from when the amount is paid or from the date on which the deposit has become legally transferable. This additional cover includes:
- Deposits from transactions with real estate of a residential or private nature.
- Deposits that derive from payments received by the depositor on a non-regular basis and that are linked to a marriage, divorce, retirement, dismissal, disability or death.
- Deposits that are based on the payment of insurance benefits or damages that are the result of a crime or miscarriage of justice.
The guarantee of deposits and the guarantee of stocks are separate but mutually compatible, such that the same holder of deposits and stocks is eligible for both guarantees, always up to the limit of 100,000 euros per guarantee.
It is important to clarify that the FGD covers the deposits in stocks in the event of bankruptcy of the banking institution holding the deposit, but not the loss of value of the investments themselves (that is, if those stocks go down in the stock exchange or if the company that issued the stock goes bankrupt, the FGD doesn't cover those losses).
The remaining deposits, such as pension plans or variable-term investment funds, are not covered by the FGD, and therefore the money invested is not guaranteed in the event of bankruptcy.