DGSD — Deposit Guarantee Schemes Directive (EU 2014/49)

The Deposit Guarantee Schemes Directive (DGSD) (Directive 2014/49/EU) harmonises the protection of bank deposits across the EU. It is a recast of the original Deposit Guarantee Directive 94/19/EC and ensures that depositors are compensated promptly and reliably in the event of their credit institution's failure.

The DGSD guarantees a coverage level of EUR 100,000 per depositor per credit institution. For temporary high balances — such as from real estate transactions, insurance payouts, or severance payments — higher coverage may be granted for a period of at least three months. The payout deadline was progressively shortened and has been a maximum of seven working days since 2024.

Each deposit guarantee scheme must build up a target fund level of at least 0.8% of covered deposits by 3 July 2024. Funding comes from risk-based contributions by member institutions. Under the European Commission's CMDI review, reforms to broaden the scope of coverage and to allow more flexible use of DGS funds are currently being negotiated.

The first EU Deposit Guarantee Directive (94/19/EC) was adopted in 1994 and set a minimum protection level of ECU 20,000. In the wake of the 2008 financial crisis, the coverage level was rapidly raised as an emergency measure by Directive 2009/14/EC, first to EUR 50,000 and then to EUR 100,000. On 12 July 2010, the Commission presented the proposal for a recast.

The DGSD was adopted by the European Parliament and the Council on 16 April 2014 and published in the Official Journal on 12 June 2014. The transposition deadline for most provisions was 3 July 2015. The payout deadline was progressively shortened from an original 20 working days: to 15 (2019), 10 (2021), and finally 7 working days since 1 January 2024.

On 18 April 2023, the Commission presented the CMDI review, which proposes, among other things, a harmonised temporary high-balance coverage (EUR 500,000–2,500,000 for 6 months) and more flexible use of DGS funds in resolution. Parliament and the Council reached a political agreement on 25 June 2025 on the CMDI package, which amends the DGSD alongside the BRRD and the SRMR. The Council formally adopted the reform on 5 March 2026. The amending directive was published in the Official Journal on 20 April 2026 as Directive (EU) 2026/804 amending the DGSD; its provisions apply from approximately 11 May 2028.

The DGSD applies to all credit institutions authorised in the EU and their deposit guarantee schemes:

• Mandatory membership: Every credit institution authorised in the EU must belong to an officially recognised deposit guarantee scheme.
• Covered deposits: All deposits of natural and legal persons up to EUR 100,000 per depositor per institution, including savings deposits, current accounts, and fixed-term deposits.
• Temporary high balances: Higher protection for a limited period for deposits arising from real estate sales, insurance payouts, compensation payments, or severance.
• Exclusions: Deposits of other credit institutions, own funds instruments, deposits linked to money laundering, and deposits whose holder cannot be identified.
• Cross-border: Deposits at EU branches are covered by the deposit guarantee scheme of the home Member State.

• Coverage level: EUR 100,000 per depositor per credit institution as the harmonised minimum coverage across the EU.
• Payout deadline: Maximum 7 working days from the determination of deposit unavailability, applicable since 1 January 2024 following a phased reduction from an original 20 working days (15 days from 2019, 10 days from 2021).
• Target fund level: Each DGS must hold at least 0.8% of its members' covered deposits as available financial means (deadline: 3 July 2024).
• Risk-based contributions: Contributions from credit institutions must reflect the risk profile of the respective institution.
• Payment commitments: Up to 30% of financial means may be held as irrevocable payment commitments.
• Borrowing: DGS may borrow from other DGS within the EU if needed (voluntary mutual lending).
• Stress tests: DGS must regularly conduct stress tests to ensure their payout capacity.

The entry does not mention the CMDI reform package, which amends the DGSD alongside the BRRD and SRMR. Council and Parliament reached a political agreement on 25 June 2025; the Council formally adopted the package on 5 March 2026.

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