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Eligible deposits comprise credit balances on an account, including the proceeds of transitional situations arising from banking transactions but excluding the deposits referred to in Royal Decree 2606/1996, Article 4(4), that the bank is under an obligation to reimburse under the applicable legal and contractual terms and conditions, whatever the currency in which such balance might be denominated, provided that the account was opened in Spain or another European Union Member State, and including a fixed-term deposit or a savings deposit. The part of eligible deposits that does not exceed the legally established coverage level will qualify as covered deposits.
Funds arising from transitional situations, as mentioned in the preceding paragraph, will invariably include amounts of money entrusted to the institution for the provision of any investment service, in accordance with the consolidated text of the Spanish Securities Market Act, or which arise from the provision of such investment services or activities.
Credit balances in which any of the following circumstances apply will not qualify as eligible deposits for the purposes of Royal Decree 2606/1996:
- Where its existence can only be proven by a financial instrument defined under Article 2 of the consolidated text of the Securities Market Act, as approved by Royal Legislative Decree 4/2015. Accordingly, reverse repurchase agreements and bearer certificates of deposit will not qualify as deposits.
- If the principal is not repayable at par.
- If the principal is only repayable at par under a particular guarantee or agreement provided by the credit institution or a third party.
Coverage level of deposits
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The maximum coverage level for deposits is €100,000 or, for deposits denominated in a foreign currency, the equivalent value at the corresponding exchange rate, in accordance with prevailing law and regulations.
In addition, the following deposits shall be protected irrespective of their amount for three months after the amount has been credited or from the moment when such deposits become legally transferable:
- Deposits resulting from real estate transactions relating to private residential properties.
- Deposits received by the depositor linked to particular life events such as marriage, divorce, retirement, dismissal, redundancy, invalidity or death.
- Deposits based on the payment of insurance benefits or compensation for criminal injuries or wrongful conviction.
Liabilities of the depositor against the credit institution shall not be taken into account when calculating the repayable amount unless they have fallen due on or before the reference dates provided for in Article 8(1) of Royal Decree 2606/1996 and in the statutory and contractual provisions governing the contract between the credit institution and the depositor.
In any case, credit institutions shall inform depositors prior to the conclusion of the contract when their liabilities towards the credit institution are taken into account when calculating the amount covered as per the terms of the previous paragraph.
In the case of non-euro denominated deposits, the covered amount will be the equivalent value at the relevant exchange rate on the day that one of the events triggering the payout of the guarantee by the FGD takes place, or on the next working day if the event happens to fall on a public holiday.
Protection under the FGD will be applied per depositor, whether they are a natural or a legal persons and irrespective of the number and class of cash deposits they hold at the same institution. This limit will also apply for depositors holding deposits that exceed the maximum covered amount.
When an account has more than one holder, the balance will be divided by the number of holders in accordance with the deposit agreement or, otherwise, into equal parts.
When the deposit holders act as nominees or agents on behalf of third parties, and provided that the legal beneficiary has been identified, or can be identified, before the events triggering payment of the guarantee by the FGD take place, the cover will be proportionally applied to the third-party beneficiaries of the deposit.
However, when the nominee or agent is one of the entities excluded from the coverage provided by the FGD (as listed in points 3º, 4º, 5º, 7º and 8º of Article 4(4)(a) of Royal Decree 2606/1996), it will be considered that the deposit belongs to said entity and it will not be covered by the FGD.
Any deposits existing if and when a member of the FGD has its authorisation revoked will continue to be protected until the institution is wound up or liquidated, and the institution will still be required to make the legally required contributions. In the case of current accounts, the covered balance shall be the balance existing at the date of revocation, less any debits occurring between that date and the date on which the event triggering payment of the compensation is announced.