🔔 Savings protection: it’s not all Greek to us

European savers are well protected under savings deposit guarantee schemes. But it’s worth checking who covers your savings and where to get information, should the euro crisis hit your savings bank.

We all know that times are tough in Europe and that has prompted a pause for thought.  There’s talk of a run on Greek banks as frantic locals withdraw euros in cash, lest they be converted into devaluing Drachma overnight. 

Spain is not immune either.  The government effectively nationalised Bankia, the country’s fourth largest bank, yet El Mundo newspaper still reported a €1 billion run on deposits. And shares in Bankia were suspended this morning. Rumours circulated that the Spanish deposit protection scheme might run dry if Bankia or another bank went bust.  Moody’s Credit Agency downgraded Banco Santander amongst others, including its UK arm which forced them to reassure ex-Abbey National, Alliance & Leicester and Bradford & Bingley Savings clients that their money is safe under UK rules

This has then lead us closer to home and a SavingsChampion linguistics test.  Do you know what Σχέδιο Προστασίας Καταθέσεων means or how or why you might search the Depositograntestelsel?

Both are important if you have savings with Bank of Cyprus, Marfin Laiki Bank (covered by the Cypriot Deposit Protection Scheme), ING Direct or Triodos Bank (both covered by the Dutch Deposit Guarantee Scheme). 

We must stress that there are no concerns about these institutions and no indications of any problems with the banks we list above. What is more, each is covered by a deposit protection scheme that provides cover for savings up to €100,000 - just over £80,000 at today’s exchange rates. Although it’s important to be aware that some schemes outside of the UK can deduct from the compensation any outstanding loans or credit owed to the bank.

Yet if the worse happened in Europe - or in the UK for that matter - it pays to be prepared. 

Most banks operating in the UK come under the Financial Service Compensation Scheme or FSCS, which protects you up to £85,000 per person, per banking licence - details of this can be found at www.fscs.org.uk.  As many providers have merged in recent years it’s worth remembering that some banks have multiple brands under a single licence, so that protection may not be as wide as you think.  Our handy FSCS licence guide can help you make sense of who is covered under a single or multiple licence.

For banks under different systems, such as the Cypriot and Dutch schemes, the FSCS is not your first point of call - it simply cannot help out if problems arise.  For that, you need to turn to the Central Bank of Cyprus or De Nederlansche Bank (the Dutch Central Bank), the Cypriot and Dutch equivalent to the Bank of England.

For those savers who are in any way concerned about Santander, there is another article on the website which includes some questions & answers from Santander UK. Click here.