What a DGS actually pays out
Under the EU Deposit Guarantee Schemes Directive (2014/49/EU), if a credit institution fails, the national DGS must repay eligible deposits up to €100,000 per depositor within seven working days of the failure. The scheme is funded by levies on participating banks — not the taxpayer.
The ceiling is harmonised across the EU, meaning the protection at a Lithuanian-licensed bank is legally equivalent to the protection at a German one. The scheme differs by jurisdiction (different levies, different administrators), but the payout commitment is common.
What "safeguarded" means
Electronic-money institutions and payment institutions cannot take deposits under EU law. They must "safeguard" customer funds — most commonly by placing them in a segregated account at a partner credit institution (e.g. Wise safeguards at Barclays and J.P. Morgan).
If the EMI fails, customer funds are in principle returned from the safeguarding account. But: there is no statutory payout window, the process typically takes months, and there is no state-backed top-up if the safeguarded amount falls short.
How to choose
- For your primary euro account — the one receiving your salary and paying bills — use a credit institution. Revolut, N26, bunq.
- For a secondary multi-currency wallet or an FX-heavy travel card — an EMI like Wise is fine, as long as you don't park large balances.
- Keep an individual balance under €100,000 at any single credit institution. Above that, split across two.
When it matters
In any bank failure scenario, but especially in the rare EMI collapses we've seen (several in 2021–2023) where customer-fund return took months. For most users, the question is: could I afford to have this money locked up for 90 days? If no, use a DGS-protected bank.