Deposit insurance Switzerland
What is the depositor protection scheme?
The Swiss Federal Act on Banks and Savings Banks ("Banking Act")
states that in the event of a bank collapsing, deposits of up to CHF
100,000 per depositor will be treated as preferential debt, thus taking
priority over the claims of other creditors. This preferential status
means that these deposits will be paid out of the insolvent bank's
assets and will therefore take priority over claims by other (non-preferential)
creditors. Securities dealers are treated in the same way as banks in
The depositor protection scheme for banks and securities dealers
guarantees payment of these deposits up to CHF 100,000 in the event of
bankruptcy or of protective measures being initiated. If the bank
concerned does not have sufficient assets to pay out the deposits, the
payment is guaranteed by the other banks.
The "Swiss Banks' and
Securities Dealers' Depositor Protection Association" is responsible for
overseeing the self-regulation prescribed by the Banking Act for the
purpose of protecting the preferential deposits held with the branches
of Swiss banks and securities dealers.
If the Federal Financial Market Supervisory Authority, FINMA (previously
the Swiss Federal Banking Commission) initiates protective measures or
forced liquidation proceedings against a bank or securities dealer, the
members of the association provide funds so that the deposits deemed
preferential under the Banking Act can be paid out as quickly as
possible to the depositors. In accordance with the measures agreed by
legislators to increase depositor protection, preferential status has,
since 20 December 2008, been extended to include deposits of up to
CHF 100,000 per depositor. The maximum amount that the members of
our association are required to contribute is limited to CHF 6 billion.
All banks and securities dealers with a branch in Switzerland that
accept preferential deposits are members of the association. Swiss law
stipulates that deposits held with these branches are protected under
the depositor protection scheme.
By guaranteeing payout of the preferential deposits, the Swiss Banks'
and Securities Dealers' Depositor Protection Association plays an
important role in protecting creditors. The Association makes a key
contribution to the reputation and stability of the Swiss financial
Switzerland has a
privately operated deposit insurance system called Deposit
Protection of Swiss Banks and Securities Dealers. It
guarantees up to CHF 100 000 per bank customer per bank.
Membership is compulsory for all banks and securities
dealers that are regulated by the Swiss Financial Market
Supervisory Authority (FINMA). See the list of members
of the Deposit Protection of Swiss Banks and Securities
dealers at http://www.einlagensicherung.ch/en/bankkunden-link/bankkunden-unterzeichner.htm
It had covered depositors in 1993 in the case of the failure
of Spar- und Leihkasse Thun SLT, Thun. The next cases
happened in 2007 with the liquidation of AB FIN SA (a
securities dealer) in Lugano and with Kauphting (Luxembourg)
SA, Geneva branch which was closed on October 9, 2008.
Clients of this bank received the payments (at the time up
to CHF 30 000 per customer) within three weeks.
What are the rules for joint accounts (compte-jointe)?
Joint accounts are accounts held in the name of more than one client.
Swiss law stipulates that assets held in a joint account are initially
divided proportionally between the clients. Next, each client's share of
the assets in the joint account is added to his/hers other preferential
Example 1: Mr and Mrs Smith have one joint account with a credit balance
of CHF 140,000. This balance is split 50:50 between the two. Each spouse
thus has preferential deposits of CHF 70,000.
Example 2: Mr and Mrs Smith have a joint account with a credit balance
of CHF 140,000. Mrs Smith also has a salary account with a balance of
CHF 50,000 and Mr Smith has a savings account with a balance of CHF
20,000. All accounts are held with the same bank. In the event that the
bank goes bankrupt, the credit balance in the joint account is split
50:50 between the two spouses, with each being allocated CHF 70,000. As
Mrs Smith also has a claim of CHF 50,000 from her salary account,
CHF100,000 of her total deposits of CHF 120,000 are given preferential
status. The "surplus" CHF 20,000 falls into the third creditor class. By
contrast, all of Mr Smith's CHF 90,000 (CHF 70,000 from the joint
account and CHF 20,000 from his savings account) is treated as
preferential as it is below the CHF 100,000 limit.
What are the rules for collective
accounts (collective accountholders)?
A collective account is defined by the clients' right of joint, not
individual access to the assets in the account. This gives rise to a
joint claim, for example, when there is a community of heirs or a simple
partnership. Swiss law states that a claim made by more than one person
can be made only once for the preferential amount. This means that the
maximum preferential amount that can be claimed by a simple partnership
or a community of heirs is CHF 100,000, irrespective of how many people
make up the simple partnership or community of heirs.
Furthermore, the collective account is to be treated as one creditor
separately from the beneficial owners. Collective accountholders (such
as simple partnerships or communities of heirs) are entitled to a
preferential amount of CHF 100,000, even if the individual beneficial
owners of these accounts make claims for their own individual
preferential amounts independently. The individual deposits of a
beneficial owner are not included in the deposits held in the collective
Are deposits in numbered
Yes; the Federal Financial Market Supervisory Authority ("FINMA") has
stated that deposits in numbered accounts are preferential because the
bank is able to assign the numbered account to a specific bank client.
Are deposits denominated in a foreign currency rather than in Swiss
Francs also classed as preferential?
Yes; preferential status applies irrespective of the currency in which
the deposit is held. However, the claim is converted into Swiss francs
before it is paid out.
Does this preferential amount apply per account or per depositor?
The preferential amount applies only per depositor and per bank. If a
client has more than one account with the same bank, the assets are
added together and the total amount deemed to be preferential is limited
to CHF 100,000. If a client's assets exceed this amount, the remaining
claims are treated in the same way as claims from the other creditors
and fall into the third creditor class in the event of bankruptcy. The
bank client receives for this claim any bankruptcy dividend payable as a
result of the bank's bankruptcy proceedings.