How much is insured?

Pursuant to legislation, the full amount of deposits is insured up to a limit of EUR 100,000 per depositor per bank. This means that there is no co-insurance for the client. Since 1st January 2016, legislation has defined exceptional cases where even higher compensation may be paid out for a defined period of time. This increased compensation can exceed the basic limit (EUR 100,000) by a maximum of an additional EUR 100,000. Such exceptional cases are e.g. deposit compensations for deposits resulting from real estate transactions related to private residential properties, settlement of the common property of spouses after divorce, insurance settlement (in the case of injury, illness, invalidity or death), inheritance, one-off supplementary pension or savings settlement, severance pay related to dismissal from a job and in other cases determined by law.

Compensation amount

The Guarantee System provides deposit compensation once it receives a written notification from the Czech National Bank stating that a bank, building society, or cooperative credit union is unable to meets its commitments to depositors (“Notification of default”) or if a court decides on the bankruptcy or issues a different decision for reasons directly related to the financial situation of the bank, resulting in the suspension of depositors’ right to dispose of their insured deposits.

Compensation amount

  • Deposit compensation is paid up to 100% of the amount deposited.
  • The maximum compensation amount is EUR 100,000 per depositor per bank, branch of a bank from a non-EU Member State, building society or cooperative credit union.
  • The compensation is paid out in the currency of the state where the given account is located.

Note: For the purpose of deposit compensation payout, all of the deposits of a single depositor at one bank, building society, or cooperative credit union are totalled, including interest calculated as at the record date. If a deposit is in the name of two or more co-holders, it is presumed that their shares are equal, unless the depositors demonstrate different shares when opening the account or making dispositions with it, and this different amount is indicated in the records that form the basis for providing deposit compensation.

Currency conversion

  • The equivalent of the limit of EUR 100,000 in Czech crowns or in a currency of the state in which the given account is located, is converted using the exchange rate announced by the CNB as at the record date.
  • Deposits held in currencies other than the currency of the state the given account is located in are also converted to the currency of the state where the account is located according to the exchange rate announced by the CNB as at the record date.

Compensation payout

  • The payout of compensation must commence within 7 business days from the record date.
  • The depositor does not need to apply for basic compensation payment. Information about the commencement of the payout and its method is published in the press, on the Guarantee System website, on the website of the insolvent institution, and also through the payout bank.
  • For increased compensation, the client must fill out an application form within 2 months from the record date.
  • The payout of compensation runs for 3 years from the date of commencement (which means that the depositor may collect the deposit compensation at any time after the date on which the payout of compensation commenced until the expiration of the 3-year limitation period).
  • The compensation is paid out through a bank with an extensive branch network, both in cash and via money transfers.

Deposit insurance above EUR 100,000

The creation of the Guarantee System has also provided clients of financial institutions with insurance of temporary high balances above EUR 100,000.

What is a temporary high balance?

Since 1st January 2016, new legislation has enabled the insurance of temporary high balances above EUR 100,000. This increased compensation can be granted for deposits of natural persons resulting from specific life events which are:

  • a) Payment of a purchase price arising from the sale of real estate serving for residential purposes according to the Cadastre of Real Estate, if the petition for the commencement of entry into the cadastre was submitted before the record date;
  • b) Settlement of the common property of spouses in the event of a divorce;
  • c) Insurance settlement in the case of injury, illness, invalidity or death;
  • d) Inheritance;
  • e) One-off settlement from supplementary pension insurance with government contribution or supplementary pension savings;
  • f) Severance pay upon dismissal from employment, where the employee is entitled to severance pay under the Labour Code, severance pay upon termination of employment by agreement, where the employee is entitled to severance pay under the Labour Code, severance pay upon the end of service through decision of the service body, where the state employee is entitled to the severance pay, and severance pay upon the end of service of natural persons in the security forces; where the natural person engaged in the security forces is entitled to severance pay;
  • g) Insurance settlement for damages arising from criminal acts;
  • h) Compensation for damage caused by a criminal act or the issue of unjust enrichment acquired through a criminal act;
  • i) Compensation for damage caused by a decision on custody, punishment or a protection measure;
  • j) Provision of financial aid to victims of crime.

Is there a time limitation on holding proceeds that are categorised as a temporary high balance?

Temporary high balances are protected up to three months from when the amount was first credited or from the moment a qualifying deposit became legally transferrable. Temporary means that the deposit must have been credited to the account (or become legally transferable if that is later) no more than three months before the record date occurs.

Is there a limit to the amount of compensation for temporary high balances?

The increased compensation for temporary high balances is paid out up to the additional EUR 100,000 above the amount calculated as basic compensation (max. equivalent of EUR 100,000 per entitled person per bank), This means that the maximum total amount compensated to one depositor at a single bank may be EUR 200,000.

Will the Guarantee System automatically contact me if I am eligible for a temporary high balance claim?

No, the Guarantee System will not automatically contact you. If you think you may be eligible to make a temporary high balance claim, you have to apply for it (see the text below).

How do I make a claim for a temporary high balance? What evidence of a temporary high balance do I need to provide?

Contrary to the basic compensation payout, the depositor has to fill out an application form if he/she wants to be granted increased compensation for temporary high balance. It is also necessary to enclose legally determined documents proving his/her claim to compensation for temporary high balance. Those documents include:

  • a) A petition for the commencement of entry proceedings to the cadastre with proof of delivery, including annexes;
  • b) A divorce decree with legal force clause that contains settlement of the common property of spouses or other property, or a judgement with legal force clause of settlement of spouses after divorce concerning their common property;
  • c) An insurance company confirmation of settlement payout;
  • d) A court decision on inheritance with legal force clause;
  • e) A pension company confirmation of one-off pension benefit settlement;
  • f) Employer confirmation for the purposes of assessment of entitlement to unemployment benefits and salary calculation;
  • g) A court decision on a committed crime with legal force clause and confirmation of insurance settlement payout;
  • h) A court decision with legal force clause on the award of compensation for damage caused through a committed crime or the award of entitlement to the return of unjust enrichment;
  • i) A court decision with legal force clause, decision of a ministry or other central administrative authority on awarding compensation for damage caused through a decision on custody, punishment or a protection measure;
  • j) A decision of the Ministry of Justice of the Czech Republic.

When must the application be submitted and when will it be assessed?

An application with enclosed documents must be delivered to the address of the Guarantee System within 2 months from the record date. The Guarantee System will assess the application and will inform the applicant within 4 months from the record date as regards if and what amount of increased compensation has been granted. The applicant will be simultaneously informed about the day of payout commencement, and about the place and method of payment of the granted increased compensation.

In the case of future compensation payouts, the application form including information about the documents necessary for proving a claim will be published on the Guarantee System website.

If you have further questions, do not hesitate to contact the employees of the Guarantee System. Contacts can be found here.


Practical examples

An account at one insured institution with a deposit under EUR 100,000

There is CZK 900,000 deposited on Mrs. Kateřina's current account. In the event of deposit compensation from the deposits of the institution where the account is held, at an exchange rate of CZK 25/EUR the Guarantee System will thus pay Mrs. Kateřina CZK 900,000, as the amount does not exceed CZK 2,500,000 (EUR 100,000).

One person has two accounts at one insured institution with a deposit exceeding EUR 100,000

Miss Mirka has CZK 2,200,000 deposited on a savings account. She has another CZK 1,000,000 deposited on a term deposit at the same institution. Overall, Miss Mirka thus has CZK 3,200,000 saved in her name at the same institution. In the event of deposit compensation from the deposits of the institution where the account is held, at an exchange rate of CZK 25/EUR the Guarantee System will pay her CZK 2,500,000 (EUR 100,000). The balance, i.e. CZK 700,000, will constitute an account receivable against the bank in the insolvency proceedings, and Miss Mirka will be entitled to proportionate satisfaction from the proceeds of the bankrupt’s assets.

One person has accounts at several insured institutions

Mr. Rostislav has his savings deposited with an institution for which the Czech National Bank announced 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. At an exchange rate of CZK 25/EUR, he will be paid CZK 1,200,000 + CZK 800,000 from the Deposit Insurance Fund by the Guarantee System, because neither amount exceeded the CZK 2,500,000 (EUR 100,000) limit and each account is held at a different financial institution.

Several people have several accounts with one insured institution

Mrs. Michaela and her husband Richard had their savings accounts at an institution for which the Czech National Bank announced inability to meet its commitments. Michaela had CZK 2,200,000 deposited in her account, and Richard CZK 1,300,000. The couple also had a joint current account with the institution, in which they had a total of CZK 44,000. At an exchange rate of CZK 25/EUR, the Guarantee System will pay to Mrs. Michaela CZK 2,222,000 (i.e. CZK 2,200,000 + CZK 22,000 as half of the CA balance), and to Mr. Richard CZK 1,322,000 (i.e. CZK 1,300,000 + CZK 22,000 as the other half of the CA balance), as neither amount exceeded CZK 2,700,000 (EUR 100,000).

Payout of basic and increased compensation

Mrs. Marie has a balance of CZK 300,000 on her current account. Two months ago, she deposited CZK 3,700,000 that she obtained from sale of a flat onto a savings account. Both accounts are held with an institution that has gone bankrupt (the whole amount at this institution is therefore CZK 4,000,000). She will be reimbursed the maximum amount of CZK 2,500,000 (EUR 100,000) as basic compensation for her deposits. In addition, as the deposit on the savings account meets the criteria for increased compensation payout (i.e. payment of a purchase price arising from the sale of real estate serving for residential purposes and simultaneously the record date occurred within 3 months from the date this amount was credited to the account), she is also entitled to increased compensation if she applies for this compensation to the Guarantee System within 2 months from the record date. Hence Mrs. Marie will be reimbursed the whole of the remaining CZK 1,500,000 because increased compensation can be repaid up to a limit of an additional EUR 100,000 (CZK 2,500,000) and this limit was not reached in the case of Mrs. Marie.