Deposit insurance: how much of your savings is protected

When you leave money in a bank, or buy one of its fixed-income products, you are in effect lending it to the bank. If the bank fails, deposit insurance repays you up to a limit, out of a fund that the banks themselves pay into. Knowing the limit, and what it applies to, is part of deciding where to put your money. The limits below come from the official pages of each scheme, as read on the date shown at the top of this guide, and they can change.

Why it exists

A bank lends out most of what it receives, so it cannot repay every depositor at once. Deposit insurance reduces the risk that a failing bank leaves small savers with nothing, and the fear of that happening, which is what makes people rush to withdraw. But it is a safety net with a ceiling, not a promise to cover any amount.

Three systems at a glance

• FGC, Brazil: R$ 250,000.00 per holder, per financial conglomerate, with an overall limit of R$ 1,000,000.00 per holder every four years. Examples of what is not covered: funds raised abroad, court deposits and subordinated instruments.
• FDIC, United States: US$ 250,000 per depositor, per insured bank and per account ownership category (single, joint, retirement and others). Examples of what is not covered: mutual funds, stocks and bonds, annuities and crypto assets.
• Deposit guarantee schemes, European Union: € 100,000 per depositor, per bank. Not covered: investment products such as shares and funds; the details are set by each country.

Per person, per institution, per group

The ceiling applies to each holder at each institution, not to each account. In Brazil the FGC counts all the institutions of the same financial conglomerate as one, so two brands of the same banking group share a single ceiling, and the limit applies to each individual (CPF) or each company (the first eight digits of the CNPJ). In the United States the FDIC (opens in a new tab) says deposits are insured to at least its standard amount at each insured bank, and points to a calculator to work out your own case. In the European Union the directive (opens in a new tab) sets €100,000 per depositor per bank and requires member states to repay within seven working days.

Because the ceiling is per institution, the way to protect more money is to spread it across institutions that do not belong to the same group, not to open more accounts in one place.

What is covered in Brazil

The FGC (opens in a new tab) lists the products it protects:

• Checking and savings accounts and other deposits that can be withdrawn.
• Time deposits (CDB and RDB), bills of exchange and the real estate, agribusiness and development credit bills (LCI, LCA and LCD).
• Accounts used only to receive salary or pension payments, and repurchase agreements backed by securities of a company related to the institution.

Products that are not deposits or bank credit bills, such as shares and investment funds, are outside the guarantee, as are the examples above.

How to check your own exposure

A few minutes with your statements is enough to know how much of your money sits above a ceiling:

1. Add up what you hold in each institution: deposits, CDBs, LCIs, LCAs and similar products.
2. Group the institutions by banking group. Several brands can belong to the same conglomerate, and the central bank's institution data shows which.
3. For each group, compare the total with the ceiling. What is above it is not protected by the scheme.

Check the issuer as well: in some apps the product is issued by a partner institution, and the guarantee refers to the issuer, not to the app.

How the investment comparison uses it

In the investment comparison, each offer says whether the deposit guarantee covers it. The page counts the offers of the same banking group together, and it shows how much of your budget would sit above the ceiling in a single institution: that part is only repaid if the institution can repay it. This does not rate the health of the institution. It shows how much of your money would be protected if something went wrong.

Mistakes to avoid

• Treating every fixed-income product as covered. Only the products the scheme lists are.
• Counting two brands of the same banking group as two ceilings.
• Putting more than the ceiling in a single institution without realizing that the excess depends on that institution's ability to pay.
• Chasing the highest rate without checking the limit. A rate far above the market is a reason to look harder at the risk, not a reason to relax because a guarantee exists.