How Much Is Insured?
Compensation Amount and Method of Payment
The DIF pays out deposit compensation once it receives a written notification from the Czech National Bank stating that a bank, building society, or cooperative savings bank is unable to meets its commitments to depositors ("insolvency notice"). In the case of a branch of a foreign bank whose deposits are additionally insured with the DIF, the DIF shall receive an insolvency notice from the relevant bank oversight authority of the home country.
Compensation Amount
- Deposit compensation is paid to 100% of the deposit amount
- The maximum compensation amount is EUR 100,000 per client per bank, building society or cooperative savings bank
- The compensation of foreign exchange deposits is paid out in Czech crowns.
Note: For the purpose of paying out deposit compensation, all of the deposits of a single depositor kept at one bank, building society, or cooperative savings bank are added up, including interest calculated as at the date of the insolvency notice. If a deposit is kept in the name of two or more co-holders, the share of an account co-holder is equal to a fraction whose numerator is the aggregate amount in the account and the denominator is the number of co-holders, unless the depositors document different shares when establishing the account or making dispositions with it.
Recalculation of the Euro Exchange Rate
- The equivalent of the limit in Czech crowns is recalculated on the basis of the foreign exchange rate announced by the CNB as at the date of the insolvency notice
- FX deposits are also recalculated to Czech crowns according to the exchange rate announced by the CNB as at the date of the insolvency notice.
Compensation Payment
- The disbursement of compensation must commence within 20 business days of the date of the insolvency notice
- The depositor does not need to apply for the compensation payment. Information about the commencement of the disbursement and its method is published in the press, on the Fund's website, on the website of the insolvent institution, and also through the bank making the payment.
- The disbursement of the compensation runs for 3 years from the date of its start (which means that the depositor may collect the deposit compensation any time after the date on which the disbursement of compensation was commenced until the expiration of the 3-year prescription period).
- The compensation is disbursed through a bank with an extensive branch network, both in cash and through cashless transfers.
Practical Examples
An account at one insured institution with a deposit of less than € 100,000
There is CZK 900,000 deposited in Mrs. Kateřina's current account. The institution at which the account is maintained has reported its inability to meet its commitments. With an exchange rate of CZK 25/EUR, the Deposit Insurance Fund will thus pay Mrs. Kateřina CZK 900,000, as the account does not exceed CZK 2,500,000 (€ 100,000).
One person has two accounts at one insured institution with a deposit exceeding € 100,000
Miss Mirka has CZK 2,200,000 deposited in a savings account with an institution that has reported its inability to meet its commitments. She has another CZK 1,000,000 deposited in a term deposit at the same institution. Overall, Miss Mirka has CZK 3,200,000 saved at the same institution. With an exchange rate of CZK 25/EUR, the Deposit Insurance Fund will pay her CZK 2,500,000 (€ 100,000). The balance, i.e., CZK 700,000 will constitute an account receivable from the bank in the insolvency proceedings and Miss Mirka will be entitled to proportionate satisfaction from the proceeds of the bankrupt assets.
One person has accounts at several insured institutions
Mr. Rostislav has his savings deposited with an institution that has announced its inability to meet its commitments. Their overall amount is CZK 1,200,000. Unfortunately, at the same time, another institution at which Mr. Rostislav has another CZK 800,000 deposited, has announced insolvency. With an exchange rate of CZK 25/EUR, he will be paid out from the Deposit Insurance Fund CZK 1,200,000 + CZK 800,000, because neither amount exceeded the CZK 2,500,000 (€ 100,000) limit and each account is kept with a different financial institution.
Several people have several accounts with one insured institution
Mrs. Michaela and her husband Richard had their savings accounts kept at an institution that announced its inability to meet its commitments. Michaela had CZK 2,200,000 deposited in her account, and Richard 1,300,000. The couple also had a joint current account with the institution, in which they had a total of CZK 44,000. With an exchange rate of CZK 25/EUR, the Deposit Insurance Fund will pay to Mrs. Michaela CZK 2,222,000 (i.e., CZK 2,200,000 + 22,000) as one half of the CA balance), and to Mr. Richard CZK 1,322,000 (i.e., CZK 1,300,000 + 22,000 as the other half of the CA balance), as neither amount exceeded CZK 2,500,000 (€ 100,000).
An account at one insured institution with a deposit of less than € 100,000
There is CZK 900,000 deposited in Mrs. Kateřina’s current account. The institution at which the account is maintained has reported its inability to meet its commitments. With an exchange rate of CZK 25/EUR, the Deposit Insurance Fund will thus pay Mrs. Kateřina CZK 900,000, as the account does not exceed CZK 2,500,000 (€ 100,000).
One person has two accounts at one insured institution with a deposit exceeding € 100,000
Miss Mirka has CZK 2,200,000 deposited in a savings account with an institution that has reported its inability to meet its commitments. She has another CZK 1,000,000 deposited in a term deposit at the same institution. Overall, Miss Mirka has CZK 3,200,000 saved at the same institution. With an exchange rate of CZK 25/EUR, the Deposit Insurance Fund will pay her CZK 2,500,000 (€ 100,000). The balance, i.e., CZK 700,000 will constitute an account receivable from the bank in the insolvency proceedings and Miss Mirka will be entitled to proportionate satisfaction from the proceeds of the bankrupt assets.
One person has accounts at several insured institutions
Mr. Rostislav has his savings deposited with an institution that has announced its inability to meet its commitments. Their overall amount is CZK 1,200,000. Unfortunately, at the same time, another institution at which Mr. Rostislav has another CZK 800,000 deposited, has announced insolvency. With an exchange rate of CZK 25/EUR, he will be paid out from the Deposit Insurance Fund CZK 1,200,000 + CZK 800,000, because neither amount exceeded the CZK 2,500,000 (€ 100,000) limit and each account is kept with a different financial institution.
Several people have several accounts with one insured institution
Mrs. Michaela and her husband Richard had their savings accounts kept at an institution that announced its inability to meet its commitments. Michaela had CZK 2,200,000 deposited in her account, and Richard 1,300,000. The couple also had a joint current account with the institution, in which they had a total of CZK 44,000. With an exchange rate of CZK 25/EUR, the Deposit Insurance Fund will pay to Mrs. Michaela CZK 2,222,000 (i.e., CZK 2,200,000 + 22,000) as one half of the CA balance), and to Mr. Richard CZK 1,322,000 (i.e., CZK 1,300,000 + 22,000 as the other half of the CA balance), as neither amount exceeded CZK 2,500,000 (€ 100,000).
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