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Estonia raises government guarantee on deposits to 50,000 EUR

20.10.2008

The Estonian Government decided to increase the guarantee and compensation limit for deposits from 20,000 EUR (313,000 EEK) to 50,000 EUR (782,000 EEK), securing now 100 per cent of all deposits with credit institutions currently guaranteed under the Guarantee Fund Act up to the said limit. The amendment took effect from 9 October 2008.

Lifting the deposit guarantee limit means that deposits of all persons and SMEs with credit institutions holding an activity licence in Estonia, together with the interest thereon as at the date on which the deposits become unavailable, are from now on guaranteed to the extent of 100 per cent but not more than in the amount of 50,000 EUR per depositor. If a person has multiple deposits in a credit institution, the amounts of those deposits will be aggregated and the 50,000 EUR limit will apply in the payment of compensation.

There are six credit institutions operating in Estonia under an activity licence at the moment: Swedbank, SEB Pank, BIG, Eesti Krediidipank, Tallinna Äripank and Marfin Pank.

Deposits with Estonian branches of foreign credit institutions are, as a rule, guaranteed under a guarantee scheme of the home country of the credit institution, to the same or a higher level than those with credit institutions holding an activity licence in Estonia. For instance, deposits with Nordea Bank are guaranteed under the Finnish guarantee scheme, also up to the limit of 50,000 EUR per depositor. Deposits with Sampo Bank, on the other hand, are secured under the Danish guarantee scheme to the maximum amount of 300,000 DKK (about 620,000 EEK). However, it is important to note that as the deposit guarantee limit under the Danish scheme is lower than that applicable in Estonia, the difference will be covered from the Estonian Guarantee Fund.

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