Deposit guarantee

Customers who apply their savings in a deposit do not run the risk of losing the funds deposited.

Regardless of the type of bank deposit, the credit institution must guarantee the depositor that it will reimburse the entire amount deposited on the due date or on the date allowed for early withdrawal, if permitted.

In the event of insolvency of a credit institution, the amounts invested in deposits are protected up to a maximum of EUR 100 000, per credit institution and per depositor, whether the depositors reside in Portugal or not.

 

How it is guaranteed

For deposits with credit institutions based in Portugal, deposits are guaranteed by one of the following funds:

  • Deposits Guarantee Fund – regulated by the Legal Framework of Credit Institutions and Financial Companies (RGICSF);

  • Mutual Agricultural Credit Guarantee Fund, in the case of deposits made with the Central Agricultural Credit Bank and the Mutual Agricultural Credit Banks (included in the Integrated Mutual Agricultural Credit System) – regulated by Decree-Law No. 345/98.

For deposits made in the branches of credit institutions in Portugal, the deposit guarantee is given:

  • for institutions based in other Member States of the European Union – by the country guarantee scheme of their headquarters, for the amount of EUR 100 000;

  • for institutions based in non-member countries of the European Union – by the Deposits Guarantee Fund of Portugal, unless such deposits are covered by a guarantee system of the country of origin in terms that Banco de Portugal considers equivalent and without prejudice of existing bilateral agreements on the subject.

 

What is guaranteed

All types of deposits are covered by the deposit guarantee system: current accounts, deposits redeemable at notice, time deposits, time deposits that cannot be mobilised in advance, special regime deposits, housing-savings, migrant savings, retirement savings, condominium savings and deposits represented by certificates of deposit.

Available financial resources resulting from transitional situations arising from normal banking operations are also covered.

The following deposits are excluded from the guarantee:

  • Deposits made with entities not authorised for this purpose;

  • Deposits for and on behalf of credit institutions, investment firms, financial institutions, insurance and reinsurance undertakings, collective investment institutions, pension funds, national and foreign public sector entities and supranational or international bodies, with the exception of:

    • deposits of pension funds whose associates are small or medium-sized enterprises;

    • deposits of local authorities with an annual budget of EUR 500 000 or less;

  • Deposits arising from operations in respect of which a final criminal conviction has been issued for the practice of money laundering;

  • Deposits in which the holder has not been identified by the submission of the elements provided for in the rules governing the prevention of money laundering and the financing of terrorism;

  • Deposits of entities which, in the two years prior to the date on which the deposits were unavailable or in which a resolution was adopted, had a direct or indirect interest equal to or higher than 2% of the share capital of the credit institution or have been members of the credit institution’s management bodies, unless it is established that they were not, by action or omission, at the origin of the credit institution’s financial difficulties and did not contribute, by action or omission, to the credit institution’s situation.

Deposits in branches of credit institutions headquartered in Portugal which are located in countries outside the European Union, regardless of where they are advertised or offered to the public, are also not covered.

Credit institutions that collect deposits in Portugal shall provide the public, in a readily understandable manner, with all relevant information concerning the guarantee schemes that benefit the deposits they receive. If deposits are excluded from the guarantee, institutions shall inform their depositors accordingly.

This information should be available at the branches, in a well-identified and directly accessible place, for example, in the price list available to the public and on the institution’s website.

In addition, institutions are required to provide depositors with the depositor information template, with information on deposit protection, namely: identification of the guarantee system protecting the deposits of the credit institution concerned, the limit of such protection and the repayment term of the deposits in the event of insolvency of the institution. This document should be:

  • Delivered prior to the opening of a current or time deposit account;

  • Signed when a deposit agreement is entered into – by all the holders, in the case of the current account, or by the holder, in the case of a time deposit;

  • Periodically referenced in the account statement;

  • Provided at least once a year in the medium and through the means of communication agreed with the customer to provide periodic information on the deposit.

At the customer’s request, credit institutions shall also provide information on the conditions on which reimbursement depends on the guarantee of deposits and on the formalities required to obtain them.

 

How it works

The deposit guarantee system is activated when the institution becomes unavailable to reimburse its customers’ deposits. This occurs when:

  • The credit institution shows a major deterioration in its financial conditions and Banco de Portugal confirms that the institution no longer has the possibility to repay the deposits of its customers; or

  • Banco de Portugal revokes the authorisation of the credit institution, if this happens before the previous situation has been verified; or

  • For deposits in branches of banks with headquarters in other Member States of the European Union, a statement from the supervisory body of the country where the credit institution is headquartered is received, proving the unavailability of the deposits of that institution.

In calculating the amount of deposits, the deposit accounts held by each depositor in a particular institution, including interest due, are taken into account at the date on which the institution becames unable to pay. If the deposits are in foreign currency, the amount will be converted into euros at the exchange rate on that date. This calculation is made by each depositor of each credit institution.

In the case of collective, joint or joint signature accounts, and in the absence of any provision to the contrary, the various holders are presumed to have equal shares. In an account of an association, to which several members have access, and in accounts whose holder is a legal person, it is considered that there is only one depositor.

Depositor Amount deposited Maximum limit of the guarantee Amount assigned to the depositor
A €20 000 €100 000 €20 000
B €50 000 €100 000 €50 000
C €150 000 €100 000 €100 000
Depositor Amount deposited Overall amount per customer Maximum limit of the guarantee Amount assigned to the depositor
A Current acount: €15 000 €165 000 €100 000 €100 000
Time deposit: €100 000
Housing-savings account: €50 000
Depositor Amount deposited Overall amount per customer Maximum limit of the guarantee Amount assigned to the depositor

A

Current account:
€60 000
Time deposit:    €152 000

€106 000 €100 000 €100 000
B €106 000 €100 000

€100 000

 

Depositor Amount deposited Overall amount per customer Maximum limit of the guarantee Amount assigned to the depositor

A

Time deposit: €250 000

€62 500 €100 000 €62 500
B €62 500 €100 000

€62 500

C €62 500 €100 000 €62 500
D €62 500 €100 000 €62 500

 

Depositor Amount deposited Overall amount per customer Maximum limit of the guarantee Amount assigned to the depositor

A

Current account:     €120 000

Retirement savings account: €90 000 €150 000 €100 000 €100 000
B - €60 000 €100 000

€60 000

Note: In the absence of any provision to the contrary, the various holders shall be deemed to have equal shares.

The guaranteed amounts must be repaid within the following time limits:

  • A portion up to 10 000 euros, within a maximum of seven business days;

  • The remaining amount up to 100,000 euros, within a maximum period of 15 business days.

The term is counted from the date deposits become unavailable. In exceptional circumstances, the Deposits Guarantee Fund may request from Banco de Portugal an extension of that period, for a period not exceeding 10 business days.