Dutch Deposit Guarantee Scheme (DGS)
Guarantee of your credit and savings balances if your bank gets into difficulties
By law, all banks with their own banking licence have to participate in the Deposit Guarantee Scheme (DGS). The scheme is executed by De Nederlandsche Bank (DNB). The DGS guarantees that you will get back all or part of your credit and savings balances if your bank gets into difficulties. If a bank is unable to meet its obligations, DNB will bring the DGS into effect. It is important that banks are financially sound. Rabobank is currently one of the world’s highest rated private banks.
Under the scheme you will be reimbursed the credit balances in all your accounts, up to a maximum of € 100,000 per account holder per bank. The following conditions apply:
- the bank is covered by the DGS
- the account/product/credit balance is covered by the DGS
- the account holder is entitled to claim a reimbursement under the DGS
Rabobank (and its branches in the European Union) is covered by the DGS. Basic information on the protection of credit balances and the reimbursement period is provided in the Depositor information sheet. This also contains an overview of the relevant brands that Rabobank uses.
Some of the organisational divisions of the Rabobank Group have their own banking licences. Relevant examples include Rabo Groen Bank B.V. and Rabohypotheekbank N.V. If you have a credit balance with either of these banks, this will be covered separately by the DGS.
Which credit balances and accounts are covered by the DGS?
The DGS covers credit balances (also in foreign currency) in the following accounts:
- bank accounts and current accounts
- savings accounts
- fixed-term deposits
- life-cycle saving scheme
- bank savings account
- investment accounts
What is not covered by the DGS?
Shares and other financial instruments, bearer bonds and life or other insurance policies and annuity insurances are not covered by the DGS. The same applies to sums held in construction trusts (“bouwdepot”) and electronic money.
Savings deposits against owner-occupied home debt are not covered by the DGS if under the specific statutory scheme these can be set off against the associated owner-occupied home debt (endowment mortgages).
The following groups of persons are excluded from reimbursement under the DGS:
- holders of accounts used for money-laundering
- account holders who have never provided proof of identity
Retail account holders
Retail Rabobank customers can submit an appeal under the DGS. Both adults and minors are covered by the scheme. The cover applies regardless of where you live, your nationality or your age.
Examples of the DGS
In the case of accounts held in the names of two or more persons, such as joint accounts, each account holder is separately entitled to a reimbursement under the DGS. The cover for joint accounts is proportionate (equal tranches), unless otherwise agreed in advance. So for a joint account with two account holders, each account holder is entitled to half of the total balance unless the account holders have agreed a different division with the bank in advance. In this case as well, the reimbursement is capped at € 100,000 per person per bank with a banking licence. If the account holder has other accounts besides the joint account with the same bank, the maximum reimbursement of € 100,000 applies to all balances collectively.
Two account holders have a joint account with a balance of € 150,000. One of them also has a personal account with a balance of € 70,000. The first account holder receives a reimbursement of € 75,000. This is half of the balance in the joint account. The second account holder has a total balance of € 145,000 (€ 75,000 + € 70,000). He will receive a reimbursement of € 100,000 under the DGS. The account holder can file the amount not covered by the DGS (in this case € 45,000) with the receiver for the bankruptcy. This will then share in the payments the receiver may ultimately be able to make to creditors from the bankruptcy. It is not possible for one account holder to transfer the excess amount not covered by the DGS to the other account holder who still has room for additional cover under the DGS.
A released deceased’s account is separately eligible for a reimbursement under the DGS. The reimbursement for a released deceased’s account is up to € 100,000, regardless of the number of heirs. The reimbursement is paid to the heirs of the deceased person.
If you have a savings account for your own home (for example, a Rabo OpbouwSpaarrekening) and a mortgage debt for your home, you are paying monthly interest plus a payment into the account, but you are not repaying your mortgage. You will repay the mortgage at maturity either entirely or partly with these payments and the interest you receive on them. This is known as a bank savings deposit for an owner-occupied home (hereinafter: bank savings deposit).
When the DGS comes into operation, the credit balance in this deposit will be set off against the mortgage debt with the bank. This is established by law. The mortgage will be reduced by the credit balance in the bank savings deposit for an owner-occupied home. In most cases, the credit in the bank savings deposit will be less than the mortgage. This means that after the set-off, the balance in the bank savings deposit will be nil. As the account holder, you cannot make any claim for a reimbursement under the DGS for this deposit. Any other accounts you hold will be eligible for a reimbursement of up to € 100,000.
You have a mortgage debt with Rabobank of € 200,000. You also have a bank savings deposit account with Rabobank that you will use to repay some of the mortgage at maturity. You make monthly payments that include interest and a contribution to your savings. The balance in the bank savings deposit is currently € 110,000.
If the Deposit Guarantee Scheme comes into effect, the balance you have saved at that time will be set off against your mortgage debt. In this example, your remaining debt will be € 200,000 -/- € 110,000 = € 90,000. The balance in your bank savings deposit is now nil.
In addition, you have a Rabo InternetSparen account with Rabobank with a balance of € 70,000. The total balance in your accounts is then € 70,000, as you have € 70,000 in Rabo InternetSparen and the balance in the bank savings deposit is nil. Under the DGS, you are entitled to reimbursement of up to € 100,000. In this case, you will receive € 70,000 from DNB.
If you have not been reimbursed for part of your balance out of the DGS and you still have a debt with the bank, you may be able to request a set-off by the bank’s receiver. Whether this is possible or not depends on the rules of civil law and the agreements we have made with you. This is separate from the DGS.
Business / corporate account holders
Business customers of Rabobank, whether their business is small or large, are covered by the DGS. The following groups of business customers are not covered by the DGS:
- Governments. This includes national and regional government bodies, such as municipalities, district water boards, provinces and the Dutch Central Government.
- Financial enterprises such as banks and (re)insurers.
- Professional investors and professional market parties, such as financial enterprises and institutional investors such as pension funds, banks, investment institutions, investment firms and collective investment schemes.
Note that private companies incorporated to make periodic payments (pensioen-BVs or stamrecht-BVs) are not subject to this exclusion. This means that such companies are covered by the DGS.
Notes on the DGS
All types of legal persons are covered by the DGS apart from the exclusions stated above.
Partnerships, general partnerships and limited partnerships are not legal entities, they are business partnerships.
At Rabobank, the account holder for partnerships is always the natural person and/or the legal person. In the case of a general partnership with for example three partners, this means that the account holder is not the general partnership, it is the three partners individually.
Account holder A has an account with Rabobank with a balance of € 40,000.
Account holder A is also a partner in a general partnership with two other partners. The three partners have a business account at Rabobank. Each of them individually is an account holder. The general partnership is not the account holder. Actually what we have here is a business joint account with three account holders. The business account has a balance of € 150,000.
How much is covered by the DGS in this case?
Account holder A has a balance of € 40,000 in his personal account.
He is also one of the account holders of the business account. The cover for a joint account like this is proportionate (equal tranches). So in this case, A has a claim on one third of the balance, € 50,000.
Account holder A can consequently claim a total reimbursement of € 40,000 + € 50,000 = € 90,000. The other two partners (who are also account holders) can each claim a reimbursement of € 50,000.
If you have both a business and a personal account with Rabobank, the following is important. The reimbursement under the DGS is not calculated per account, but per person per bank. This means in your case that you can only make one claim against the guarantee of up to € 100,000. Your business and personal balances will be added together if you are a sole business owner and/or a general partnership. In the case of a private limited company (BV) with a director-majority shareholder (DGA), both the BV and the DGA can make separate claims against the guarantee of up to € 100,000.
In the case of accounts held in the name of two or more legal persons, such as a joint account, each account holder is separately entitled to a reimbursement under the DGS. The cover for joint accounts is proportionate (equal tranches), unless otherwise agreed in advance. So for a joint account with two account holders, each account holder is entitled to half of the total balance unless the account holders have agreed a different division with the bank in advance. In this case as well, the reimbursement is capped at € 100,000 per person per bank with a banking licence. If the account holder has other accounts besides the joint account with the same bank, the maximum reimbursement of € 100,000 applies to all balances collectively.
Reimbursement under the DGS
The DGS guarantees a reimbursement of up to € 100,000 per account holder per bank. If a legal or natural person has several accounts with the same bank, the balances in these accounts are added together. The maximum reimbursement of € 100,000 applies to the total balance in these accounts. To receive the reimbursement, you must declare that you waive your right to settlement of this balance against any debts to the failed bank. This is a legal requirement. If you waive your right to settlement, DNB can pay you the reimbursement within the allotted term. If you do not provide this declaration, DNB will not be able to reimburse you. The declaration applies only to the sum you receive in reimbursement under the DGS. This is up to € 100,000.
An account holder has two accounts with balances of € 50,000 and € 70,000 at the same bank. Collectively, this is a balance of € 120,000. This account holder will receive the maximum reimbursement of € 100,000 under the DGS. The account holder can file the amount not covered by the DGS (in this case € 20,000) with the receiver for the bankruptcy.
Some savings accounts involve a future tax liability. This applies for instance to bank savings accounts such as Rabo ToekomstSparen and Rabo GoudenHanddrukSparen. Formally speaking, pay-out of these accounts is subject to income tax. This is not the intention of the DGS. DNB is examining in consultation with the Tax & Customs Administration what possibilities there are to avoid or mitigate the negative tax effects of payments under the DGS as far as possible.
Implementation of the Deposit Guarantee Scheme
Further information on the DGS is provided in the Depositor information sheet.
The DGS is executed by De Nederlandsche Bank NV (DNB).
Further information on the DGS including the reimbursement period and example calculations can be found on the DNB website.