Is my money safe in the bank?

In September 2007, people in Britain queued for hours outside a bank called Northern Rock to take out their savings. Most had never worried about their bank before. What were they afraid of — and could it happen to your bank?

Deposit insurance: protection up to a limit

If a bank fails, a deposit insurance scheme pays back its depositors, up to a limit. The banks themselves pay into the scheme. In Slovenia and the rest of the EU, the limit in 2026 is €100,000 per person per bank, paid within 7 working days since 2024. In Slovenia, Banka Slovenije runs the scheme.

Four rules decide how much is covered:

• All your deposits at one bank are added together: current account, savings and term deposits, in euros or other currencies.
• “Per bank” means per banking licence. Two brands that share one licence count as one bank.
• Joint accounts are split between the holders, usually equally. Each share is added to that person’s own deposits at the same bank.
• Temporary high balances, such as money from selling a home or an inheritance, get extra protection for a limited time: 3 to 12 months under EU rules, depending on the country.

Shares, bonds, funds (including ETFs), crypto and the contents of a safe-deposit box are not deposits, so deposit insurance never covers them. If a bank or broker cannot return your shares or funds, a separate investor compensation scheme applies, with a much lower limit (at least €20,000 in the EU).

Why bank runs happen

A bank run is a rush of depositors withdrawing money at once because they fear that others will. A bank lends most deposits out for years, so even a healthy bank cannot pay everyone on the same day.

• Northern Rock, UK, 2007. Protection then covered only the first £2,000 in full and 90% of the next £33,000, so savers with more had a real reason to queue. It was the first run on a British bank in about 150 years. The government then guaranteed all its deposits, and the bank was nationalised in 2008.
• Silicon Valley Bank, US, 2023. At the end of 2022, over 94% of its deposits were above the $250,000 insured limit. On 9 March 2023, customers withdrew more than $40 billion in one day, mostly online. The bank was closed the next day.

Deposit insurance stops runs because it removes the reason to rush: if your money is covered, you can wait calmly.

Payment apps: safeguarded is not insured

An e-money institution is a licensed firm that holds money for payments and can issue cards, but may not lend that money out. Many payment apps and prepaid cards work this way. Money held there is not a deposit, so deposit insurance does not apply.

Instead, the firm must safeguard your money by keeping it separate from its own, for example in a special account at a bank. If the firm fails, administrators return it. That can take weeks or months, and if the firm broke the rules, some money may be missing. When the German payments firm Wirecard collapsed in June 2020, customers of about a dozen card apps that used its UK company were locked out of their money for several days.