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Deposit Insurance and Guarantee Funds: What They Cover and Where the Limits Are
Key takeaways
- Bank deposits in the Czech Republic are insured up to €100,000 per person per bank.
- Investments with a broker are protected by the Securities Dealers Guarantee Fund — up to €20,000.
- The guarantee fund does not cover losses from market declines, only broker insolvency or fraud.
- ETF assets in the EU are segregated from the manager's assets — even bankruptcy of the manager does not transfer them to creditors.
- When choosing a broker, verify which jurisdiction it is regulated in and which fund provides coverage.
Deposit insurance in the Czech Republic covers bank deposits up to €100,000 per person per bank — however, investments with a broker or in a fund operate on entirely different principles.
Bank Deposits: Solid Protection
The Deposit Insurance Fund (FPV) guarantees that in the event of a bank's bankruptcy you will get back up to €100,000 (approximately CZK 2.5 million). For large banks in the Czech Republic, this risk is low, but the protection exists. For higher balances (inheritance, property sales), transitional protection of up to €200,000 applies for 3 months.
Investments with a Broker: Different Rules
A broker in the Czech Republic falls under the Securities Dealers Guarantee Fund (GFOCP). This covers up to €20,000 in the event that the broker goes bankrupt or embezzles funds. Importantly: it does not cover losses from market movements — that is investment risk, not institutional failure.
Foreign Brokers and Protection Limits
- Brokers in the Czech Republic and EU — regulated by the CNB or equivalent, mandatory guarantee scheme
- UK brokers (FSCS) — protection up to £85,000 on investments
- Non-European entities — lower or no statutory protection, caution warranted
When choosing a broker, find out which country it is regulated in and what protection the scheme provides. An overview of verified brokers for Czech investors can be found in the article how to choose a broker in the Czech Republic. For UCITS ETFs, asset segregation is automatic — see the article on UCITS ETFs and Irish domicile.
FAQ
Up to what amount are deposits insured in the Czech Republic?
Up to €100,000 per person per bank. For extraordinary life events (inheritance, property sales), transitional protection of up to €200,000 applies for 3 months.
Does the guarantee fund cover losses from a fall in equity values?
No. The Securities Dealers Guarantee Fund only covers cases of broker insolvency or fraud — up to €20,000. Losses from market movements are the investor's risk, which no fund covers.
Are ETFs protected in the event of the fund manager's bankruptcy?
Yes. UCITS ETFs in the EU have assets that are legally segregated from the fund manager. The fund's assets cannot be used to pay the manager's debts — they belong to investors regardless of bankruptcy.
How do I choose a broker with good protection?
Check the regulation (CNB, FCA, CySEC), the associated guarantee scheme, and its limits. Prefer brokers regulated in the EU or the UK with a clear legal structure for asset segregation.