I dont know. .... You could always click the link I provided.

It is your link!!!
I do not click links on websites - no telling what is on the otherside so I went straight to the source and found my answer.
Thanks anyway..

Your caution would be warranted on some types of iffy web sites, I hear, but do you seriously think that someone who has made over 50,000 posts on BE is posting dangerous urls for fellow members?

Most of the point and value of the internet is to allow people to navigate quickly and seamlessly between pages using url hyperlinks!

It would be even safer if you printed out internet pages on to paper before you read them, just in case you accidentally clicked on a link.

N26 is protected, being a German bank, but as with almost all deposit guarantee schemes around the world it might only apply to the home currency (in this case EUR).

That is usually the case.

Unfortunately, there can be a nasty twist if you a bank fails when you have both insured and uninsured deposits, whether the uninsured deposits are in a non-covered currency(ies), or in an excess amount.

The problem arises because a payment of deposit insurance is an advance against liquidation dividend payments.

Example 1:

You have a deposit of GBP170,000 and it is only in your (sole) name. Deposit protection insurance pays out GBP85,000, the maximum amount.

Later, the bank liquidator pays a divided of 40% (everyone who lost money when the band failed gets 40% of their losses paid, regardless of currency). Your GBP170,000 would get a dividend of GBP68,000, all of which would go to reimburse the deposit insurance scheme.

Two years later again, the liquidator pays a further 20%. The GBP34,000 would be split GBP17,000 to the deposit protection scheme, which has now recovered the entire GBP85,000 they paid to you, and then the other GBP17,000 would go to you.

Example 2:
You have deposits of GBP85,000 (insured), and USD110,000 (uninsured, and for this example, I'm going to assume the value of the USD is GBP85,000).

The bank fails and you receive an insurance payout of GBP85,000. A year later the liquidator pays a 40% dividend, so for your two accounts that would be GBP34,000 and USD44,000. Here's the kicker, the deposit insurance scheme gets both dividends, and the deposit insurance scheme has still only recovered 80% of the money they paid you.

Two years later the liquidator pays another 20% dividend, so your accounts would get payments of GBP17,000 and USD22,000, and half of those amounts would go to the deposit insurance scheme, at which point the DI scheme is fully reimbursed, and you would get the other half.

Example 3:

You have GBP141,000 on deposit when the bank fails. You receive GBP85,000 in deposit insurance payments, the maximum amount, but nothing for your USD deposit, which wasn't in​sured.

As before the liquidator makes 40% and later 20% dividend payments, being GBP56,400 and GBP28,200, which total GBP84,600, so both dividends go entirely to reimburse the deposit insurance scheme. And unless the liquidator makes another payment, you have lost the other GBP56,400.

This is a very good example of how people can get shafted by these deposit insurance schemes. The good thing is that is those countries that I have checked out, the insurance limit is "per person, per bank." So if you spread your money across a number of banks, the full limit will luckily be applied to each bank separately. But as mentioned you almost always need to keep those funds in the currency of the country that offers the deposit insurance for that particular bank.

That should be pretty obvious to anyone that has any common sense and if you actually read the ToS of your account you would know that......

As it's an EU mandate, they're all going to have basically the same rules. The UK rules were updated to allign with the EU rules, which are 100% of the first EUR100,000, which is why the UK coverage is GBP85,000 - at that time that was approximately what EUR100,000 was worth.

The previous UK deposit protection scheme only paid out 75% of the first GBP20,000 per person per bank. So the maximum payment was GBP15,000, or GBP30,000 on a joint account.

Sometimes it's good to be poor

Same here.

Thanks, I didn't even know it was a common standard across the EU to set the deposit guarantee at EUR 100K. I'm curious as to whether this is a fixed amount or a min. amount required by law, meaning that some countries could have set the bar even higher...

AFAIK it's a minimum, but I sincerely doubt any countries would go higher, because [1] the risk/ potential cost could be high, and in any case it would only affect a small percentage of the population, that is necessarily fairly well off anyway.

Because of the way that compensation is funded, by a levy on other banks, you need a sizeable number of banks to spread the levy across. So a country with few banks wouldn't want to affect other banks with a large levy, so I would guess that only the larger countries, Germany, France, and Italy could probably make a higher insured amount work even if they wanted to.

I would also point out, that if having a higher insured amount was a good, profitable (to the country) economic strategy, then the UK, with its very large banking centre, would have increased the insured amount post-Brexit.

I thought about this for a while and I can only conclude that raising the insured amount would make sense solely for countries that want to attract cross-border investments in a retail sense. The problem is there aren't many European countries that actively target foreign customers - in fact Iceland is the only one that comes to mind, and quite a few people from the UK opened up accounts there. Luck had it that many of these banks went under during the financial crisis and the gov't refused to bail them out, which led to considerable losses for UK savers...

You make an interesting point, but the real reason for deposit insurance is commonly misunderstood. It certainly looks like it benefits depositors, and for PR reasons that is how governments, central banks and regulators present it, and certainly deposit insurance does benefit depositors if a bank fails, however the actual motivation for deposit insurance is to protect the banks, specifically by (hopefully) eliminating* the urge of customers to withdraw their deposits because of concerns about the solvency of the bank, leading to a "run on the bank", as a bank run, based on nothing but rumours, can destroy even a solvent bank. The clue to this conclusion is in the founding of the US's FDIC, which was created in 1933 during the great depression which had caused multiple bank runs and bank failures.

* Despite the FDIC now insuring $250,000 per depositor (since the great recression of 2008) there continue to be instances of bank runs in the US, including Silicon Valley Bank in 2023, which had apparently relied heavily on tech millionaires who had deposits far exceeding the $250k insured amount, and social media allowed a panic to spread extremely quickly among the bank's customers. And even a solid, well run bank is going to have liquidity problems when a large amount of the deposit base is withdrawn very quickly - a bank is required to have some cash on hand, some deposits at other banks, and liquid government bonds, but just can't sell off loans and other assets in just a few days to meet the demand for withdrawn cash.

The financial meltdown in 2008 had also seen evidence of "unnecessary" (because of deposit insurance) bank runs, and the US Fed, Bank of England and EU did well to head off what was close to a total banking melt down. In my opinion the Fed and Bank of England should have stepped in sooner, as large banks were falling like dominoes and at an accelerating rate when they finally acted, shortly after the failure of Wachovia Bank in the US and Halifax/HBOS in the UK. I think there may have been good reasons why the Bear Stearns investment bank was allowed to fail in March 2008, but things started to accelerate during the summer of 2008 and got ugly when Lehman Brothers was allowed to fail in September 2008, and Washington Mutual (a savings bank, a bit like a building society) just a couple of weeks later. At that point it seemed like everyone started playing the "who's next?" game, with banks starting to look like a row of dominoes.

And, if it came to the crunch, could the governments of Jersey and Guernsey really afford to compensate investors if their financial institutions went under?