Is saving at a foreign bank safe? How the deposit guarantee works in Europe
· 3 min read · Spaarradar editorial team
The highest savings rates often come from banks in Sweden, Estonia or Malta. What the European deposit guarantee covers, who pays out if things go wrong, and what you need to watch yourself.
If you compare savings rates, you often see names at the top that you do not know from the Dutch high street. Banks from other European countries regularly pay more than the big Dutch banks, which are now at 1.85% while the highest instant-access rate is 3.03%. The logical question: is your money just as safe there?
The same law across Europe
Every country in the European Economic Area (the EU plus Norway, Iceland and Liechtenstein) must have a statutory deposit guarantee scheme. The rules come from one European directive and are therefore essentially the same everywhere:
- €100,000 per person per bank is covered, including the accrued interest.
- The guarantee applies automatically. You do not have to apply for anything or take anything out.
- The directive requires that savers get their money back within seven working days.
- A joint account of two people is covered up to €200,000.
In countries without the euro, the limit is set in the local currency, for example in Swedish kronor. The amount in euros then moves a little with the exchange rate.
Which country pays out?
What decides it is the country where the bank has its licence, not the country where you live or the language of the website. If you save at a Swedish bank, you fall under the Swedish scheme. That also applies if you open the account through a platform such as Raisin: your money is held at the bank itself, in your name, under the guarantee of that bank's country.
A bank with a Dutch licence falls under the Dutch scheme, which De Nederlandsche Bank runs. That also applies to subsidiaries of foreign groups that have their own licence here. The page banks and deposit guarantee shows for each bank which scheme and which licence it falls under.
So what is the difference?
On paper the cover is the same. The differences are in practice.
- Handling. In a bankruptcy, the payout goes through the scheme of the bank's country. Correspondence may be in another language and you may need an extra step to pass on your account number.
- The capacity of the fund. Each country fills its own guarantee fund with contributions from the banks in that country. There is no joint European fund. A guarantee is therefore as strong as the scheme behind it, and some savers deliberately choose countries with a high credit rating for that reason.
- Withholding tax. Some countries withhold tax on the interest you receive. That has nothing to do with safety, but it does affect what you keep. Read about it in withholding tax on foreign savings interest.
What to watch yourself
- Stay below €100,000 per bank, and leave room for the interest that is added. More to save? Read saving more than €100,000.
- Watch out for brands that share one licence. Two brands of the same bank count as one for the guarantee. We mention that on the offers concerned.
- Check that it is a bank deposit. Interest paid by a broker or app is not always a savings account at a bank. Sometimes the money is held at partner banks or in a money market fund, and then the protection works differently.
What we check
Our comparison only contains offers whose participation in a statutory deposit guarantee scheme we have checked with the supervisor or the scheme itself. Every offer shows which country pays out the guarantee, and if your amount is not fully covered, you see that straight away. How that check works is explained in the methodology.
Do you only want to see banks that fall under a particular scheme, or all offers with a European guarantee? Then look at saving with a European deposit guarantee scheme.
Not advice. Rates are gross and can change; the tables in this article show the position at the moment you open the page. How we calculate and check is described in the methodology.
