Is my money at a foreign bank protected by the Dutch Deposit Guarantee?
The money in accounts at foreign banks operating in the Netherlands is protected by the deposit guarantee of the country of origin of that bank.
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Dutch people are insufficiently aware of deposit guarantee
The volume of savings at Dutch banks is rapidly increasing. At the same time, only a little over half of all Dutch people know about the protection of this money by the Dutch Deposit Guarantee. General awareness is lower among young people and women. It is important to raise public awareness about the Dutch Deposit Guarantee, because the security of deposit guarantees contributes to financial stability. That is why DNB and the Dutch banks have joined forces to inform and educate the Dutch public about the deposit guarantee.
Steady rise in protected savings
The Dutch Deposit Guarantee provides protection of money held in payment and savings accounts at Dutch banks up to €100,000 per person, per bank. In recent years, the volume of guaranteed savings has risen sharply from around €360 billion in 2008 to €560 billion in 2021. This is an increase of more than 50% since the financial crisis. Due to the coronavirus crisis, there was a further surge in 2020 and guaranteed savings grew by 9%.
Importance of public awareness
Due to the strong growth in guaranteed savings, public awareness of the Dutch Deposit Guarantee is becoming increasingly important. After all, this guarantee helps to prevent massive bank runs following a bank's failure, or if bank account holders expect a bank to fail. Through this security, deposit guarantee can contribute to financial stability. Public awareness is a prerequisite for this.
DNB has measured awareness of the Dutch Deposit Guarantee periodically since 2017. It is notable that the number of people in the Netherlands who know that money is protected up to a certain maximum limit in the event of a bank failure has decreased since 2017 (from 76% in 2017 to 68% in 2020). General awareness of the deposit guarantee (58% in 2020) and the maximum protection of €100,000 (44% in 2020) is reasonably stable.
So there is room for improvement, particularly in the area of awareness of the existence of the deposit guarantee and the characteristics of the coverage, such as its scope (is my money in the bank protected?), its level (up to what amount?) and the time it takes for consumers to get their money back after their bank has failed.
The awareness of deposit guarantee in the Netherlands is comparable to other Western countries such as Canada, Finland and France. At the same time, practice in some other countries also shows that improvement is possible. For example, the Bank of England managed to raise awareness of the UK deposit guarantee (FSCS) from 60% to 76% within five years. International research shows that it is important to ensure that at least 65% of the public are generally aware of deposit guarantees.
Lower awareness among young people and women
The periodic survey shows that there are substantial differences in the level of awareness of deposit guarantee between different groups in the Netherlands. Older people are better aware of deposit guarantee. And within all age groups, awareness among men is higher than among women. As a result, the share of older men (77%) that is aware of deposit guarantee is twice as large as that of young women (34%). In addition, education level is also a distinguishing factor. Among less educated people, 39% are generally aware of deposit guarantee. Among higher educated people, this increases to 73%. The differences between groups prompt a customised approach to raising awareness.
Working towards higher public awareness
In order to further strengthen confidence in deposit guarantee – and thus confidence in Dutch banks – protection has been improved on several fronts since the financial crisis. For example, account holders now get their money back within ten business days after a bank failure, the maximum coverage level is high (€100,000) and there is additional protection for temporary high deposits related to the purchase or sale of a private home. The banks are also financing a deposit guarantee fund that is being set up.
At the same time, the survey results show that the share of Dutch people aware of deposit guarantee is still too low. Sufficient awareness is a precondition for the effectiveness of the Dutch Deposit Guarantee. It also strengthens the position of consumers. If people are better aware of deposit guarantee, they can make more informed decisions about their money.
DNB is therefore actively working to improve awareness, focusing in particular on those groups where awareness is lower than average. The aim is to increase general awareness of the Dutch Deposit Guarantee to at least 65% of the public by the end of 2022. This is done through a dedicated website (www.depositogarantie.nl) and through active education on online channels. The banks, too, will contribute to improving awareness of the Dutch Deposit Guarantee by aligning their information provision with the jointly developed approach and educational messages where possible.
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