The Institutional Protection Scheme of the Savings Banks Finance Group protects deposits at a savings bank, a Landesbank or a Landesbausparkasse (building society). The aim of the Institutional Protection Scheme is to prevent financial difficulties at the affiliated institutions. The system achieves this through voluntary institutional protection within the framework of legal requirements. In this way, business relationships with customers are continued as contractually agreed.
The Institutional Protection Scheme thus offers customers of the Savings Banks Finance Group the highest level of security. Since the establishment of the Institutional Protection Scheme in the 1970s,
· no customer of a member institution has ever lost any of their deposits or interest,
· no depositors have ever had to be compensated,
· no member institution has ever gone bankrupt.
In addition, the Institutional Protection Scheme of the Savings Banks Finance Group has been officially recognized as a statutory deposit guarantee scheme. Under the statutory deposit guarantee, the customer is entitled to a refund of their deposits from the deposit guarantee scheme up to EUR 100,000, as stipulated in Germany’s Deposit Guarantee Act (EinSiG).
Under the umbrella of the German Savings Banks Association (“DSGV”), the Institutional Protection Scheme of the Savings Banks Finance Group consists organisationally of 13 functionally connected subfunds:
· eleven subfunds of the regional savings banks associations ("savings banks subfund"),
·
the subfund of the Landesbanken and Girozentralen and
·
the subfund of the Landesbausparkassen.
This Institutional Protection Scheme is officially recognized as a deposit guarantee scheme in accordance with Section 43 EinSiG.
Should a member institution be experiencing or at risk of financial difficulties, the responsible subfund of the Institutional Protection Scheme steps in. Its task is to ensure the solvency and liquidity of this institution within the framework of the statutory requirements.
The following measures, for example, can then be considered for institutional protection:
· Injecting equity capital,
· issuing guarantees and sureties,
· fulfilling third-party claims
The respective subfunds of the Institutional Protection Scheme are functionally connected.
The regional savings banks associations have a total of eleven savings bank subfunds. If the necessary means required for a a support measure in one region exceed the responsible subfund’s available financial means, the Supraregional Compensation Mechanism comes in place. Through this link, all eleven savings bank subfunds are aggregated which means the financial means of all savings bank subfunds are at hand if needed.
There are separate subfunds for the Landesbanken and Girozentralen as well as the Landesbausparkassen:
· the subfund of the Landesbanken and Girozentralen and
· the subfund of the Landesbausparkassen.
If needed, all subfunds are linked through the Scheme-wide Compensation Mechanism, namely
· all 11 savings bank subfunds ,
· the subfund of the Landesbanken and Girozentralen and
· the subfund of the Landesbausparkassen.
This applies in the case that the necessary means for a support measure exceed the available financial means of the responsible subfund. This System-wide Compensation Mechanism means that in the case of a crisis, the financial means of all 13 subfunds of the Institutional Protection Scheme are available for measures to safeguard institutions.
The Institutional Protection Scheme is based primarily on prevention. Therefore, risk monitoring is carried out. Standardized processes and identical organizational structures are in place for this purpose in all 13 subfunds. By closely monitoring the member institutions, risks can be identified at an early stage and countermeasures can be initiated in good time. This is to avoid a depositor compensation case.
Risk monitoring data is collected several times a year. They are then evaluated by experts of the Institutional Protection Scheme and independent auditors and prepared for the responsible committees of the Institutional Protection Scheme. The results are presented to the members of the Institutional Protection Scheme on a nationwide basis. They form the basis for preventive measures in the respective subfunds. In addition to preventive measures, the Institutional Protection Scheme also has a catalogue of sanctions. This enables the system to have a lasting impact when fundamental problems arise.
The law stipulates that the Institutional Protection Scheme builds up its financial resources by 2024. The statutory target level of the available financial means is 0.8 per cent of the covered deposits of the member institutions of the Institutional Protection Scheme and was achieved on time. As a substantial portion of the necessary financial means had already been contributed from existing assets, the Institutional Protection Scheme of the Savings Banks Finance Group always had a solid financial base.
The contributions of the member institutions are based on risk parameters defined by the supervisory authority. The contributions of a member institution increase in line with its regulatory risk parameters. This creates incentives
· for risk-conscious behaviour and thus
· for ensuring the solidity
of the member institutions.
To enhance efficiency and effectiveness, all institutions within the Savings Banks Finance Group are building up an additional fund since 2025, which is available in addition to existing financial means. As well as meeting regulatory requirements, this additional fund is designed to enable acting even more swiftly in the event of a crisis and providing support flexibly to institutions where necessary.
The purpose of an institutional protection scheme is not only to protect customer deposits. It also ensures that business relationships with customers continue.
Due to European requirements, German law has also obliged institutional protection schemes to take up the function of deposit guarantee scheme. Nevertheless, depositor compensation is only a fallback solution, since the Institutional Protection Scheme of the Savings Banks Finance Group is specifically designed to avoid the need for statutory depositor compensation in the first place. Depositor compensation is therefore only applied if, contrary to expectations, the protection provided by the Institutional Protection Scheme does not take effect. In this case, customers are protected as required by the German Deposit Guarantee Act.
If the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) has determined a compensation event, customers are entitled to compensation. This must be paid within seven working days. The deposit guarantee function is taken up by the
Deutscher Sparkassen-
und Giroverband e.V.
Administrative Office of the Institutional Protection Scheme of the German
Savings Banks Finance Group
Charlottenstraße 47, 10117 Berlin
E-Mail:
Administrative Office of the Institutional Protection Scheme of the German
Savings Banks Finance Group
Charlottenstraße 47, 10117 Berlin
E-Mail: sicherungssystem@dsgv.de.
The process of compensating depositors in the event of a payout event is described in detail here à. The exact amount of the claim for depositor compensation is based on the provisions of the German Deposit Guarantee Act (EinSiG). In general, covered deposits up to EUR 100,000 are protected by the statutory claim.
The Institutional Protection Scheme of the Savings Banks Finance Group includes eleven savings bank subfunds of the regional savings banks associations:
· Hanseatischer Sparkassen- und Giroverband
· Ostdeutscher Sparkassenverband
· Rheinischer Sparkassen- und Giroverband
· Sparkassen- und Giroverband Hessen-Thüringen
· Sparkassen- und Giroverband für Schleswig-Holstein
· Sparkassenverband Baden-Württemberg
· Sparkassenverband Bayern
· Sparkassenverband Niedersachsen
· Sparkassenverband Rheinland-Pfalz
· Sparkassenverband Saar
· Sparkassenverband Westfalen-Lippe
All savings banks are members of their respective regional savings bank subfund.
The following member institutions belong to the subfund of the Landesbanken and Girozentralen:
· Bayerische Landesbank, Munich
· DekaBank Deutsche Girozentrale, Frankfurt/Main
· Landesbank Baden-Württemberg, Stuttgart, Karlsruhe and Mannheim
· BSK 1818 AG, Berlin
· Landesbank Hessen-Thüringen - Girozentrale -, Frankfurt/Main and Erfurt
· Landesbank Saar, Saarbrücken
· Norddeutsche Landesbank Girozentrale, Hannover, Braunschweig and Magdeburg
In addition, the following institutions are also affiliated with the subfund of the Landesbanken and Girozentralen:
· Frankfurter Bankgesellschaft (Deutschland) AG, Frankfurt
· BSK 1818 Holding AG, Berlin
· S-Kreditpartner GmbH, Berlin
· S Broker AG & Co. KG, Wiesbaden
· Weberbank Actiengesellschaft, Berlin
The following member institutions belong to the subfund of the Landesbausparkassen:
· LBS Landesbausparkasse Hessen-Thüringen, Frankfurt/Main and Erfurt
· LBS Landesbausparkasse Süd, Stuttgart and Munich
· LBS Landesbausparkasse Saar, Saarbrücken
· LBS Landesbausparkasse NordWest, Münster and Hannover
· LBS Landesbausparkasse NordOst, Hamburg, Kiel and Potsdam
The Institutional Protection Scheme safeguards the trust that people place in the ‘Sparkasse’ brand
As public sector institutions, Savings Banks are not primarily geared towards maximising returns. Therefore, Savings Banks avoid excessive risks. However, it cannot be completely ruled out that an institution may experience financial difficulties. If this does occur, the Institutional Protection Scheme of the Savings Banks Finance Group ensures that the long-term stability of the affected institution is restored.
The Institutional Protection Scheme of the Savings Banks Finance Group therefore fulfils an important function for the institutions and for the protection of customers' trust. No customer has ever lost deposits or interest due on them in the Savings Banks Finance Group. Insolvencies of member institutions have been successfully prevented and their liquidity ensured.
What protection scheme does the Savings Banks Finance Group use?
The Deposit Guarantee Act (EinSiG) came into force in Germany on 3 July 2015. The law implements a corresponding EU directive. The Savings Banks Finance Group has realigned its Institutional Protection Scheme, which has existed since the 1970s, with these legal requirements. In doing so, the Savings Banks Finance Group decided to continue the proven voluntary Institutional Protection Scheme for all German Savings Banks, Landesbanken and Landesbausparkassen. This ensures that business relationships with customers can continue and that a depositor compensation event is avoided. Since its foundation, this system has been operating successfully: to date, no institution within the Savings Banks Finance Group has become insolvent.
In addition, the Savings Banks Finance Group also ensures compliance with the statutory requirements for depositor compensation – as a mandatory fallback solution for institutional protection. The deposit guarantee scheme is administered by the German Savings Banks Association.
What does institutional protection by the Institutional Protection Scheme mean?
The savings banks, Landesbanken and Landesbausparkassen in Germany stand by each other. They guarantee the solvency and liquidity of the institutions even in financial difficulties.
The following measures, for example, can be considered for institutional protection:
· injecting equity,
· issuing guarantees and sureties, and
· fullfilling third-party claims
The basis of institutional protection is:
· mutual liability,
· the use of uniform risk monitoring standards, and
· the prevention of financial difficulties at the affiliated institutions by means of early preventive measures
What does deposit guarantee by the Institutional Protection Scheme mean?
The deposit guarantee protects covered deposits of the customers of an institution in accordance with the Deposit Guarantee Act. If the Federal Financial Supervisory Authority (BaFin) determines a compensation event, customers are entitled to compensation within seven working days. The deposit guarantee scheme of the Savings Banks Finance Group is administered by the German Savings Banks Association e. V.
Voluntary institutional protection
The primary objective of the Institutional Protection Scheme is to avoid a compensation event and to protect the affiliated institutions themselves, in particular to ensure their liquidity and solvency (institutional protection). In this way, the business relationships of the affiliated institutions with their customers continue as contractually agreed. Within the framework of the legal requirements, the voluntary Institutional Protection Scheme therefore averts any impending or existing financial difficulties.
Please note: Capital with equity funds character, in particular pursuant to paragraphs 41, 44 of the Communication from the EU Commission 2013/C 216/01 of 30 July 2013 (‘Banking Communication), does not fall under the institutional protection of the Institutional Protection Scheme of the Savings Banks Finance Group.
Statutory deposit guarantee
Due to European requirements, German law also requires depositor compensation to be guaranteed in addition to institutional protection. For the Savings Banks Finance Group, this requirement is purely a fallback solution. It ensures that the customers of institutions within the Savings Banks Finance Group are protected at least as well as required by the German Deposit Guarantee Act. The statutory entitlement means that customer deposits are protected up to EUR 100,000.
What is the structure of the Institutional Protection Scheme of the Savings Banks Finance Group?
The Institutional Protection Scheme of the Savings Banks Finance Group consists of 13 functionally connected subfunds. Within the framework of statutory requirements, they are jointly responsible for safeguarding the solvency and liquidity of member institutions in the event of impending or existing financial difficulties.
The Institutional Protection Scheme consists of:
· eleven savings bank subfunds,
· the subfund of the Landesbanken Girozentralen and
· the subfund of the Landesbausparkassen
The structure of the Institutional Protection Scheme
ensures that the member institutions can be closely monitored. It thus reduces
the risk of financial difficulties.
All savings banks are members of their respective regional savings bank subfund. If an institution encounters financial difficulties, the support initially falls within this subfund’s responsibility. This is to ensure that liquidity and solvency are maintained at all times. If a regional savings bank subfund does not have sufficient available financial means to provide support, a supra-regional compensation mechanism comes into play: All savings bank subfunds then jointly participate in any necessary measures to support an institution.
In addition, if necessary, within the framework of the scheme-wide compensation mechanism,
· all savings bank subfunds
· the subfund of the Landesbanken and Girozentralen and
· the subfund of the Landesbausparkassen
work together, in case the necessary financial means to support an institution exceed the available financial means of the responsible subfund. This scheme-wide compensation mechanism ensures that, in the event of a crisis, all financial means of all the subfunds are available for institutional protection measures.
What methods does the Institutional Protection Scheme use for prevention and risk monitoring?
A central element of the Institutional Protection Scheme is prevention through risk monitoring. To this end, there are standardised processes and organisational structures in all 13 subfunds. This uniform supervision of the member institutions enables risks to be identified at an early stage and countermeasures to be initiated.
Data for risk monitoring is collected several times a year. Experts from the Institutional Protection Scheme and external auditors evaluate the results and prepare them for the relevant committees of the Institutional Protection Scheme. The results form the basis for possible preventive measures in the respective subfunds. In addition, the Institutional Protection Scheme has a catalogue of possible sanctions. This enables the scheme to exert a sustained influence on the institutions concerned in the event of fundamental problems.
What financial resources does the Institutional Protection Scheme have at its disposal?
The law requires the Institutional Protection Scheme to build up its available financial means by 2024. The statutory target level of 0.8 per cent of the covered deposits of the members of the Institutional Protection Scheme was achieved on time. As a substantial portion of the necessary financial means had already been contributed from existing assets, the Institutional Protection Scheme of the Savings Banks Finance Group always had a solid financial base.
The contributions of the member institutions are based on risk parameters defined by the supervisory authority. The contributions of a member institution increase in line with its regulatory risk parameters. This creates incentives
· for risk-conscious behaviour and thus
· for ensuring the solidity
of the member institutions.
Whose deposits are protected by the deposit guarantee of the Savings Banks Finance Group?
As a creditor of a savings bank, Landesbausparkasse or Landesbank, every depositor is, in principle, entitled to compensation from the Institutional Protection Scheme in the event of a compensation event. This includes, in particular, private customers and partnerships as well as corporations. Inter alia, there is no protection for the deposits of credit institutions and financial service providers, insurance companies, investment companies and public authorities.
Which deposits are covered by the deposit guarantee?
The deposit protection covers all savings, fixed-term and demand deposits, i. e. savings books, money market accounts, fixed-term deposit accounts and transaction accounts, as well as savings bonds issued in a customer's name. A credit institution's debt securities, such as bearer bonds and certificates, on the other hand, are not covered by the statutory deposit guarantee.
Capital with equity funds character, in particular in accordance with points 41, 44 of the Communication from the EU Commission 2013/C 216/01 of 30 July 2013 (‘Banking Communication’), is also not secured.
Are certificates protected if the issuing credit institution goes bankrupt?
No, because these certificates are third-party bearer bonds, which are generally not covered by the deposit guarantee scheme of the Savings Banks Finance Group.
Is there a maximum limit up to which customer deposits are protected by the deposit guarantee scheme?
The amount of the compensation claim is capped. Under the statutory deposit guarantee, deposits are protected up to a limit of EUR 100,000 per person per institution.
However, this statutory compensation claim is purely a fallback solution: within the Institutional Protection Scheme of the Savings Banks Finance Group, the German savings banks, Landesbanken and Landesbausparkassen mutually guarantee each other’s continued existence through their financial resources. This is intended to avoid the need for compensation for depositors.
Does the claim for compensation also include interest on deposits?
Within the limit of EUR 100,000, statutory deposit protection also covers customers’ claims for interest.
Are there cases where more than EUR 100,000 is protected?
Yes, in certain cases and life circumstances, amounts exceeding EUR 100,000 may exceptionally be protected. This is the case, for example, with one-off payments arising from property transactions relating to privately used properties. Furthermore, this applies to sums intended for social or statutory purposes and linked to specific life events of the depositor (e.g. marriage, divorce, retirement, , termination of employment, birth, illness, need for care, disability or death), as well as for deposits that serve purposes laid down in national law and are based on the payment of insurance benefits or compensation for criminal injuries or wrongful conviction. These funds must not have been in the account for more than six months at the time of determination of a compensation event. In such event, the depositor must substantiate the claim separately in writing, providing evidence of the facts giving rise to the claim.
Are customer accounts held in foreign currencies also protected by the deposit guarantee scheme of the Savings Banks Finance Group?
Yes.
Which credit institutions are members of the Institutional Protection Scheme of the Savings Banks Finance Group?
The Institutional Protection Scheme of the Savings Banks Finance Group includes all savings banks, Landesbausparkassen and Landesbanken in Germany, as well as DekaBank. In addition, the following institutions holding customer deposits are members of the Institutional Protection Scheme: S-Broker, Frankfurter Bankgesellschaft Deutschland and Weberbank.
Are customer deposits held at branches abroad also protected?
Where affiliated institutions maintain branches within the European Economic Area (EEA), deposits held there are covered by the deposit guarantee. The nationality of the customer is irrelevant in this regard.
Is my securities account with a Savings Banks, a Landesbank or DekaBank covered by the deposit guarantee scheme of the Savings Banks Finance Group?
There is no need for securities to be covered by the deposit guarantee scheme of the Savings Banks Finance Group. The contents of the securities account – i.e. shares, investment funds, certificates, etc. – remain the property of the customer at all times. They are merely held in custody by the custodian institution. The account holder may demand the return of these assets at any time, provided that the holder has not pledged those securities.
How are joint accounts, such as those held by spouses, protected?
In principle, every depositor is entitled to statutory compensation of up to EUR 100,000. In the case of joint accounts, this protection applies to each account holder’s respective share. In the absence of specific account agreements, deposits are allocated to the account holders in equal shares. The scope of protection is therefore the same whether spouses hold their assets in individual accounts or in a joint account. On the other hand, to determine the maximum compensation limit of currently EUR 100,000, all of a customer’s deposits from their individual accounts and their shares in joint accounts are added together.
How are accounts held by civil law partnerships (GbR) treated?
Accounts held by civil law partnerships are not regarded as joint accounts of the respective partners, but as an account held by the partnership – just as with a genuine legal entity. The civil law partnership therefore generally has a claim for compensation limited to EUR 100,000.
Who is entitled to compensation in the case of fiduciary accounts?
Fiduciary accounts are accounts opened by an account holder on behalf of a third party. In the case of fiduciary accounts, the deposit guarantee limit applies not to the account holder but to the relevant third party as the depositor. The prerequisite for this is that the existence of a fiduciary relationship is clearly documented.
When does a compensation event occur?
Under the German Deposit Guarantee Act, a compensation event arises when the Federal Financial Supervisory Authority (BaFin) determines such an event in accordance with the criteria laid down by law. Only then can the deposit guarantee scheme of the Savings Banks Finance Group begin to compensate depositors. All affected depositors must be informed immediately of the determination of a compensation event.
Within what timeframe must affected depositors be compensated by the deposit guarantee scheme?
Customers are entitled to compensation within seven working days.
Where do the funds for the deposit guarantee scheme of the Savings Banks Finance Group come from?
The deposit guarantee scheme of the Savings Banks Finance Group collects annual contributions from its members. The contributions paid by members towards the deposit guarantee scheme are channelled into a special fund, which is set aside for use in the event of compensation claims. The Institutional Protection Scheme of the Savings Banks Finance Group is legally obliged to invest its members’ contributions in such a way as to ensure the greatest possible security and sufficient liquidity of the investments.
*Note: Only the German version of the Framework Statutes for the Institutional Protection Scheme of the Savings Banks Finance Group is legally binding.