I was talking about this the other day to a very wealthy man. He told me his financial adviser had said that the guarantee of 20,000 euros is not true and that it depends on the arrangement you have with your bank in Spain. I personally thought it was European law that banks had to guarantee at least 20,000 euros. But what he said got me thinking.

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Hopefully Andy will look in later, he'll know

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Just looked up European law. As I thought you are guaranteed a minimum return of 20,000 euros from a banking institution in the EU, but the EU is looking at changing the rules.

AUSTRIA:

-- Deposits at Austrian banks are guaranteed up to a limit of at least 20,000 euros per person per bank. There are separate schemes for the country's commercial banks, savings banks, cooperative banks and state-owned banks, some of which voluntarily guarantee higher amounts.

BULGARIA:

-- The Bulgarian Deposit Insurance Fund insures depositors for amounts up to 40,000 levs (20,425 euros) per bank.

-- All banks that operate in Bulgaria pay annual contributions to the fund. Branches of foreign banks operating in Bulgaria, whose headquarters are in countries where there are no guarantee schemes, also contribute to the fund.

DENMARK:

-- The Guarantee Fund for Depositors and Investors covers cash deposits up to 300,000 crowns. The Guarantee Fund covers deposits with the financial institution less any debt to the financial institution.

FRANCE:

-- The Deposit guarantee known as 'cash guarantee' gives a maximum compensation limit of 70,000 euros per depositor. The maximum guarantee applies to each institution, regardless of the number of accounts opened by the same depositor in France or in branches of the institution located in the European Economic Area.

GREECE:

-- The Hellenic Deposit guarantee fund (TEK) insures depositors for amounts up to 20,000 euros per bank. All banks pay into TEK, including foreign banks operating in Greece whose headquarters are outside the EU. TEK's liquid assets totalled 940 million euros in 2007.

IRELAND:

-- Ireland had previously guaranteed bank deposits up to 20,000 euros, which it raised to 100,000 euros 10 days ago. The scheme introduced on Tuesday sets no limit to the funds guaranteed. The new pledge, which covers up to 400 billion euros ($575 billion) of liabilities and includes retail, commercial and interbank deposits, takes effect immediately and expires in September 2010.

ITALY:

-- The Interbank Deposit Protection Fund provides for a minimum level of protection equal to 20,000 euros per depositor. The fund also compensates the depositors of members' branches in other European Union countries.

GERMANY:

-- The Compensation Scheme of German Banks (EdB) is limited to 90 percent of deposits and the equivalent of 20,000 euros per depositor.

-- The Deposit Protection Fund of the Association of German Banks fully secures the deposits of customers at private commercial banks not covered by the EdB up to a ceiling of 30 percent of the relevant liable capital of each bank.

NETHERLANDS:

-- The DGS guarantees balances up to a total of 40,000 euros per account-holder per institution (regardless of the number of accounts held). For each account-holder, the amount over 20,000 euros is subject to a 10 percent account-holder risk.

PORTUGAL:

-- The Deposit Guarantee Fund covers in full the overall value of the cash credit balances of the depositor in each bank, whenever that value does not exceed 25,000 euros in each bank.

SLOVENIA:

-- Slovenia guarantees up to 22,000 euros of all bank deposits in the country.

SPAIN:

-- The amount guaranteed is limited to a maximum of 20,000 euros per depositor.

UNITED KINGDOM:

-- The Financial Services Compensation Scheme (FSCS) gives a compensation limit of 35,000 pounds which applies to each depositor for the total of their deposits with an organisation. However Prime Minister Gordon Brown said on Tuesday the government planned to raise the guarantee for bank savings to 50,000 pounds ($90,560) in a new banking law.

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Thanks Janet.

But is money saved with Abbey covered by the UK at £35,000 or since it is owned by Santander cover by Spain at £15,800?

Is it not time that all banks in the EU were the same?

If it is with Abbey in the UK, then it will be covered by UK legislation regardless of the fact that the bank is actually owned by Santander. It is where the account is that matters. I don't suppose there are too many banks left now that aren't owned by another bank somewhere else

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Legislation has just changed in the last few days in Spain and the level has been raised, but I can't seem to find the new level. Anyone have any idea.

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A new report has just appeared on Canarias24Horas:

EU Finance Ministers have agreed to raise the guarantee of deposits to 50,000€. Some countries, however, including Spain, will offer further guarantees ... to a minimum of 100,000€.

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If the guarantee is 100,000 euros this should enable most mortals to sleep peacefully at night.

What happens to the couple retiring to Spain and buying their dream apartment, if they transfer the whole of the cost to a bank in Spain which then goes bust 10 minutes afterwards? Does this process put them at risk, finding that the bankers draft presented at notary has no value above 100,000 euros?

I know this sounds most unlikely, but if a bank goes bust, it is bound to happen to somebody, and it would be most annoying.

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γνωθι σεαυτόν. And on the eighth day, god made the fossils

It looks as though 300,000 UK savers are in trouble with savings in a Bank in Iceland, Icesave, which have frozen their accounts () where they stand to lose any investment above 50,000 pounds, and where they will not be able to get access to anything for at least 3 months.

Grauniad

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γνωθι σεαυτόν. And on the eighth day, god made the fossils

Yeah well to me this is like someone holding a gun to your head and saying "take it easy, I guarantee I won't pull the trigger".

There are never any true guarantees in life. At a time when markets & banks can only be described as unstable, that's when your money is declared safe!

Do goverments the world over actually have enough in the kitty to reimburse everyone should it happen?

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