The Swedish deposit guarantee

For those of you who were around for the 2008 financial crisis the word “deposit guarantee” (🇸🇪 insättningsgaranti) might’ve stuck somewhere in the back of your mind. But the Swedish version has actually been around since the financial crisis of the 90s, to be exact it came into effect 1996.

But what does it actually mean? And should it impact how you think about where to keep your savings? The short answer: yes. So let’s look at how it works.

As one can elude from the name, someone/something guarantees something for someone else. Specifically it guarantees that you, the owner of a savings account with a certain bank, will be reimbursed by the state if the bank goes bankrupt. The guarantee is valid for all individuals (incl children) along with companies and other legal entities.

How much? Currently the guarantee caps out at 1 050 000 SEK per person + bank. Meaning you are covered above 1 050 000 SEK as long as you make sure to never keep more than that with one single bank.

It’s also worth noting that if a savings account has multiple account holders the guarantee is counted for each person individually (not collectively). Furthermore, the guarantee is not affected by owing a certain bank money (having a mortgage for example).

Are all banks and all accounts automatically covered by the deposit guarantee? No, only cash is covered (meaning savings accounts), not financial instruments such as stock/funds/bonds/ETFs. Furthermore each company offering a savings account must apply to have their savings account approved by the National Debt Office (🇸🇪 Riksgälden). If it’s not approved it won’t be covered by the deposit guarantee and the company must clearly inform their customers of this.

Just so you know though, the 3 best banks in Sweden (imho): Lysa, Nordnet and Avanza, are all covered by it.

But what about your investments via ISK or KF accounts? Aren’t they covered? No, not by the deposit guarantee. But, there’s a separate version called the “investment guarantee” which I’ll cover in an upcoming post. Stay tuned!