FREQUENTLY ASKED QUESTIONS

HOW IS THE DEPOSIT COMPENSATION AMOUNT CALCULATED?

For the purposes of deposit compensation payout, all the insured deposits of a depositor at the institution for which the payout is to be made are added up, including interest calculated as at the record date. The amount of deposit compensation paid out is 100% of this aggregate sum of deposits, but a maximum of the equivalent of EUR 100,000.

AT WHAT EXCHANGE RATE ARE DEPOSITS CONVERTED TO ESTABLISH THE EQUIVALENT OF THE EUR 100,000 LIMIT?

The Czech crowns equivalent of the limit is calculated using the foreign exchange rate published by the Czech National Bank as at the record date.

DOES DEPOSIT INSURANCE ALSO COVER INTEREST ACCRUED ON DEPOSITS? I.E. WILL I BE REFUNDED THE AMOUNT SAVED INCLUDING INTEREST ON THE DEPOSIT?

This insurance also covers interest on deposits, which is calculated as at the record date.

WILL THE COMPENSATION FOR INTEREST ON THE DEPOSIT BE PROVIDED AFTER WITHHOLDING TAX?

Yes, the payout of compensation for deposits including accrued interest has already been reduced by withholding tax according to the applicable regulations.

I HAD A FOREIGN CURRENCY ACCOUNT WITH A BANKRUPT BANK. IN WHAT CURRENCY WILL I RECEIVE MY COMPENSATION?

The compensation is paid out in the currency of the country in which the relevant account is situated. In the case of an account maintained in the Czech Republic, compensation will be disbursed only in Czech crowns. The conversion will be made using the rate published by the Czech National Bank as at the record date.

WHERE CAN I COLLECT MY COMPENSATION?

You can collect your deposit compensation at selected branches of the payout bank . These branches are listed here.

WHAT DOCUMENTS DO I NEED IF I WANT TO COLLECT MY COMPENSATION?

If you are a natural person (citizen), you will only need an ID card or passport. A natural person who is an entrepreneur (a self-employed person) must also furnish an extract from the Trade Register. If you want to collect compensation as a representative of a legal person, you must, in addition to an identity document, furnish an extract from the Commercial Register or other register not older than 1 month.

WHAT IS THE DEADLINE FOR COLLECTING MY COMPENSATION?

Deposit compensation will be paid out over a period of three years following the payout start date. You can collect your compensation at any time during this period.

HOW WILL MY COMPENSATION BE PAID?

The money will be transferred to another account you own (i.e. by bank transfer) or paid out in cash.

CAN THE PAYOUT BANK DIVIDE THE COMPENSATION OVER SEVERAL BANK ACCOUNTS OR ONLY TO ONE ACCOUNT?

After identifying the client, the payout bank will pay the compensation either in cash or by bank transfer to the account specified by the client. In this case, it is not possible to divide the compensation and send it to several accounts; the compensation may only be sent in full to a single account. The client will receive appropriate proof of the payout at a branch of the payout bank.

WHAT SHOULD I DO IF I GO TO A BRANCH OF THE PAYOUT BANK AND I AM NOT ON THE LIST OF ELIGIBLE PERSONS ENTITLED TO RECEIVE DEPOSIT COMPENSATION? OR IF I AM ON THE LIST BUT I DO NOT AGREE WITH THE COMPENSATION AMOUNT TO BE PAID OUT?

In both these cases, you will need to use the complaint process - more information can be found here.

CAN I AUTHORIZE SOMEONE ELSE TO COLLECT THE COMPENSATION?

Yes, you can grant another person power of attorney, which will be issued exclusively for the payout of compensation for deposits. A sample power of attorney can be found here. The principal’s signature on the power of attorney must be officially certified. In the case of power of attorney issued abroad, its translation into Czech must be officially certified.

CAN THE COMPENSATION BE COLLECTED BY ANY PERSON AUTHORIZED TO DISPOSE OF THE FUNDS ON THE ACCOUNT OF THE BANK FOR WHICH THE PAYOUT IS TO BE MADE? (I.E. THE SO-CALLED DISPONENT)?

No, the only person who may collect the deposit compensation is the one in whose name the account is kept (in special situations stipulated by law, the compensation may be also collected by the owner of the funds on the account). Authorization to dispose of the funds on the account (e.g. in the case of the so-called ‘disponents’), without the person concerned being the person in whose name the account is kept, does not in and of itself establish the right to collect deposit compensation.

WHEN IS IT POSSIBLE TO COME FOR THE PAYOUT OF COMPENSATION FOR A DEPOSIT FOR WHICH THE MATURITY DATE WAS ARRANGED AFTER THE COMPENSATION PAYOUT START DATE?

In terms of the payout of deposit compensation, it is irrelevant whether the maturity date of the deposit was arranged for a date after the start date of the deposit compensation payout. The compensation will be provided from the first day when the payout starts according to the status as at the record date, regardless of whether the maturity date of the deposit was arranged for a later date.

I SOLD MY HOME AND THE PURCHASE PRICE WAS SENT TO MY ACCOUNT SPECIFIED IN THE PURCHASE CONTRACT. I SUBSEQUENTLY DEPOSITED THIS MONEY ON A TERM ACCOUNT AT ANOTHER BANK, WHICH WENT BANKRUPT 2 MONTHS AFTER THE DEPOSIT WAS MADE. AM I ENTITLED TO INCREASED COMPENSATION FOR A TEMPORARY HIGH BALANCE?

Unfortunately not. To be entitled to increased compensation for a temporary high balance, the funds would have to have been credited/deposited on the account directly by the buyer or by an intermediary/custodian in line with the purchase contract. As you however subsequently transferred these funds, they can no longer be considered as a temporary high balance establishing the right to receive increased compensation (the subsequent transfer of the funds meant that this was no longer the payment of the purchase price, i.e. upon transfer, these funds no longer had the nature of the payment of the purchase price resulting from the sale of a residential property, which is protected by an increased deposit compensation limit).

ON 1 JANUARY 2016, CZK 5,000,000 WAS RECEIVED ON MY ACCOUNT AS PAYMENT OF THE PURCHASE PRICE FOR A RESIDENTIAL PROPERTY. HOWEVER, IT WAS NOT POSSIBLE TO USE THESE FUNDS FROM THE DATE THEY WERE CREDITED ONTO THE ACCOUNT, AS A COURT ISSUED A PRELIMINARY INJUNCTION TO BLOCK THIS AMOUNT UNTIL RESOLUTION OF A LAWSUIT FROM THE BUYER SEEKING A DISCOUNT ON THE PURCHASE PRICE DUE TO DEFECTS IN THE PROPERTY CLAIMED BY THE BUYER. IN THE END, THE COURT DECIDED THAT THE BUYER WAS NOT ENTITLED TO A DISCOUNT ON THE PURCHASE PRICE. THE DECISION CAME INTO FORCE ON 1 DECEMBER 2016, BUT THE BANK AT WHICH THE ACCOUNT WAS KEPT WENT BANKRUPT A MONTH LATER, ON 1 JANUARY 2017. WILL I BE ENTITLED TO INCREASED COMPENSATION FOR A TEMPORARY HIGH BALANCE EVEN IF THE RECORD DATE OCCURRED MORE THAN 3 MONTHS AFTER THE CREDITING OF THESE FUNDS ONTO THE ACCOUNT?

The Act on Banks stipulates that increased compensation may be awarded to the depositor if the amount in question was credited/deposited onto the account no later than 3 months before the record date. Nevertheless, at the same time, the Act on Banks allows that if the depositor, his/her legal representative or guardian is not entitled, under certain circumstance, to use this amount on the day of crediting the amount to the account, the aforementioned three-month period will not start until the date of obtaining the authorization to use the amount. Thus, in your particular case, this three-month period did not start until 1 December 2016, when the funds were released by the court. As the record date occurred within 3 months after this date, this deposit is protected by an increased deposit compensation limit. If you submit an application for the payout of increased compensation, including all annexes required by law, within 2 months from the record date, you will be entitled to increased compensation.

In which currency will the compensation for deposits in a Czech branch of a bank with its registered office in another EU Member State be provided?

The compensation will be provided by the Czech Financial Market Guarantee System on behalf of the foreign deposit guarantee scheme, in the Czech currency.