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What is deposit insurance? How savings are protected if a bank fails

By SendPay Business · · 2 min read

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Deposit insurance is a government-backed scheme that pays savers back, up to a limit, if their bank or building society fails. It exists so that ordinary people do not lose their savings and do not rush to withdraw money at the first sign of trouble.

Schemes around the world

In the UK, the Financial Services Compensation Scheme (FSCS) covers eligible deposits up to a set limit per person, per banking licence. In the US, the FDIC covers up to $250,000 per depositor, per bank, per ownership category. EU countries guarantee at least €100,000 per depositor, per bank. Check each scheme's own website for the current limit and rules.

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What is usually covered

  • Current and savings accounts at a licensed bank or building society.
  • Money held in the account's own currency, depending on the scheme.
  • Balances up to the limit, per person, per banking licence.
  • Joint accounts, which often get a limit for each account holder.

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Why e-money is different

Money held with an e-money institution is not usually covered by deposit insurance. Instead, the firm must safeguard customer money, keeping it separate from its own funds, so it can be returned if the firm fails.

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Where SendPay fits

SendPay platforms are powered by licensed partners, and SendPay tells you in writing which licences apply to your platform, and how customer money is protected, before you launch.

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How it works

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SendPay Business is a technology company, not a bank. Accounts, cards and payments are powered by licensed partners.

Questions people ask

Are my savings within the limit?

Our free deposit insurance calculator checks your balance at each bank against the limit.

Deposit insurance calculator →
What is safeguarding?

How e-money customer funds are protected.

Safeguarding →
E-money institution vs bank

The key differences.

EMI vs bank →
What is a bank run?

When many savers withdraw at once.

Bank runs →

Read next

Spotted a mistake or something out of date? and we'll fix it. How our guides are made

This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.