Questions and Answers (FAQ)

The depositor protection system is designed to prevent banks from becoming bankrupt. If a bank were to become bankrupt, clients could lose at least part of their deposits.

Depositor protection in Switzerland is made up of the following key elements:

1. Regulation: legislators have laid down strict conditions that banks must meet in order to accept client deposits.
   For example, banks must hold sufficient capital and liquidity to be able to pay out their client deposits at any time. 
   There are also rules about how banks must be organised.
2. Supervision: the Swiss Financial Market Supervisory Authority FINMA supervises banks on an ongoing basis to ensure that they comply with these strict rules.
   If a bank gets into financial difficulty, FINMA can order protective measures or restructuring measures to avert bankruptcy.
3. System stability: the Swiss National Bank (SNB) can take measures to maintain the stability of the financial system.
4. Deposit insurance: the deposit insurance scheme is activated if a bank nevertheless becomes bankrupt.

In the event of a bank’s bankruptcy, the deposit insurance scheme protects client deposits against loss up to the amount of CHF 100 000.

This guarantee is regulated by law.

The deposit insurance scheme consists of the following key elements:

1. All banks must hold collateral consisting of assets in Switzerland equivalent to 125% of the protected and preferential client deposits.
2. Protected deposits have preferential status in the event of bankruptcy.
3. The bank’s liquidator appointed by FINMA uses the bank’s available liquidity to pay out the protected deposits.
4. esisuisse funds the payment for the protected deposits if the bank has insufficient liquidity available.
   The banks make a maximum of CHF 7.9 billion available to esisuisse for this purpose.
   This amount corresponds to the value specified in the law of 1.6% of all protected deposits in Switzerland.
5. If the available liquidity of the bank and the funds of esisuisse should not be sufficient to pay out all secured credit balances, the liquidator uses the proceeds from the sale of the bank's assets.
   In such a case, the payout to the client will be delayed.

For more information, see the question:

«How secure and robust is Switzerland’s deposit insurance scheme?»

In the event of a bank’s bankruptcy, the deposit insurance scheme protects client deposits against loss up to the amount of CHF 100 000.
This guarantee is regulated by law.

The deposit insurance scheme has two objectives: 

1. It aims to protect the general public’s money against the risk of loss in the event of a bank’s bankruptcy (societal objective).
2. It strengthens confidence in the financial system and thus prevents a bank run.

• esisuisse is a self-regulatory organisation for banks in Switzerland.
• esisuisse guarantees that it will cover protected deposits as part of the self-regulation of Swiss banks and securities firms.
• All banks with a branch in Switzerland must be members of esisuisse.
• esisuisse is a private association with its registered office and office in Basel.
• The banks are obliged to pay to esisuisse the amounts stipulated by law to fund the deposit insurance scheme. 
  esisuisse will then pass to the bank’s liquidator the sums required to finance repayment of the protected deposits.
• esisuisse informs the public about depositor protection in Switzerland.

For more information, see the questions:

« What is the bankruptcy procedure for a bank?» and « How secure and robust is Switzerland’s deposit insurance scheme?»

• All banks must hold collateral consisting of assets in Switzerland equivalent to 125% of the protected and preferential client deposits.
• This is intended to ensure that the protected and preferential deposits are fully covered in the event of a bankruptcy.
• In addition, this rule means that assets remain in Switzerland and thus it is easier to realise them.
• The liquidator first uses the bank’s available liquidity to pay out the protected deposits. esisuisse must finance the payout of the protected deposits if the bank’s liquidity is insufficient to pay out the protected deposits (deposit insurance call). Only in this unlikely scenario does esisuisse make the necessary funds available to the liquidator. esisuisse may collect this additional money at any time from all other banks via direct debit.
  The banks make a maximum of CHF 7.9 billion available to esisuisse for this purpose.
  This amount corresponds to the value specified in the law of 1.6% of all protected deposits in Switzerland.
  The Federal Council is authorised to increase this amount if necessary.
  The banks must provide esisuisse with collateral (securities or money) for half of these approximately CHF 7.9 billion by 01.12.2023 at the latest.
• esisuisse has a statutory period of seven working days in which to transfer the necessary funds to the liquidator.
• Thanks to the sale of the bank’s assets (125% rule), the amount paid by esisuisse to the liquidator will be repaid preferentially to esisuisse during the course of the liquidation («legal assignment») and is thus made available again for other deposit insurance calls.
• If the available liquidity of the bank and the funds of esisuisse should not be sufficient to pay out all secured credit balances, the liquidator uses the proceeds from the sale of the bank's assets.
  In such a case, the payout to the client will be delayed.
• The combination of the payout from the bank’s existing liquidity, the financing by esisuisse, the 125% rule and the preferential repayment of the liquidation proceeds to clients and to esisuisse makes the Swiss deposit insurance scheme particularly robust and sustainable from esisuisse’s point of view.

For more information, see the question:

«What is depositor protection and what is deposit insurance?»

Deposits are generally client balances on accounts held at banks.

This money is known as a «deposit».

For more information, see the question:

«What type of deposits are protected?»

Depositors are generally clients who hold a credit balance in an account with a bank.

This client is known as a «depositor».

• Deposits at banks that operate a branch in Switzerland authorised by the Swiss Financial Market Supervisory Authority FINMA are covered by the deposit insurance scheme. This includes the cantonal banks and PostFinance. Only deposits at securities firms authorised by FINMA as «account-holding» are covered by the deposit insurance scheme.
• Deposits at foreign banks are also covered, provided the deposits are booked with a branch in Switzerland that is authorised as a bank by FINMA.
• Deposits distributed through the following channels are placed with the following Swiss banks and are thus covered by the deposit insurance scheme (Subject to change. No guarantee.):
  1. «Neon», «Coop Finance+»: Hypothekarbank Lenzburg AG
  2. «Yuh»: Swissquote Bank SA
  3. «Zak»: Bank Cler AG
  4. «CSX»: UBS Switzerland AG

For more information, see the question:

«At which providers are assets not covered by the deposit insurance scheme?»

The deposit insurance scheme does not cover:

1. Assets held at providers that have not been authorised by the Swiss Financial Market Supervisory Authority FINMA to operate a branch in Switzerland.
   FINMA maintains a list of authorised banks that is updated regularly. If FINMA becomes aware of activities by an unauthorised provider, the bank is added to FINMA’s warning list.
2. Assets at companies that use the «sandbox» authorisation (pursuant to Art. 6 Banking Ordinance) and accept a maximum of CHF 1 million in deposits, or at companies that use the FinTech authorisation (pursuant to Art. 1b Banking Act). 
   Such companies must expressly inform clients that their balances are not covered by the deposit insurance scheme.
3. Assets at certain branch offices of cooperatives (e.g. «Coop Depositenkasse») and mutual savings banks of cooperatives, foundations and associations.
   These institutions may accept assets as banks without authorisation under some conditions. The deposit insurance scheme does not apply to assets deposited with these institutions.
4. Assets at securities firms authorised by FINMA as «non-account-holding» are no longer covered by the deposit insurance scheme. FINMA maintains a continuously updated list of non-account-holding securities firms (list of authorised banks).

All clients (private and corporate) of banks are protected by deposit insurance:

1. Natural persons (adults, children).
2. Legal entities (e.g. stock companies, limited companies, foundations, associations, governmental organisations).
3. Groups of people (e.g. communities of heirs, general partnerships, simple partnerships, homeowners’ associations, condominium associations).

Clients resident or domiciled abroad are also protected by deposit insurance.
The identity of the «beneficial owner», beneficiary or authorised representative does not play a role.
The decisive factor is the bank’s contractual partner.

Deposits of banks and other authorised or supervised financial intermediaries at other banks are not covered by deposit insurance.
The list of these financial intermediaries can be found in Art. 42c para. 2 of the Banking Ordinance.

Protected deposits include:

1. Credit balances in a government-issued currency on accounts held in the client’s name (e.g. private accounts, current accounts, savings accounts, investment accounts, salary accounts, postal accounts and numbered accounts).
2. Credit balances on metal accounts (gold, silver, platinum and palladium), provided the client has an exclusive or alternative contractual right to payment in a government-issued currency.
3. Medium-term notes in a government-issued currency held in the name of the bearer at the issuing bank.
4. Overnight deposits, fixed-term deposits or time deposits.

Deposits in foreign government-issued currencies are also covered by deposit insurance.
The exchange rate in Swiss francs when the bankruptcy proceedings are initiated is used to determine the amount of the protection. 
The claim is generally paid out in Swiss francs.

The special provisions of Pillar 3a and vested benefits accounts are described in more detail. See the question:
«How are vested benefits and Pillar 3a credit balances protected in the event of a bankruptcy?»

Deposits, balances, assets and claims that are not covered include, in particular, the following (not exhaustive):

1. Deposits of more than CHF 100 000 per client and bank.
2. Deposits booked at foreign branches of the bank.
   However, there is preferential treatment under bankruptcy law here. For more information, see the question:
   «What is the difference between preferential deposits and protected deposits?»
3. Credit balances on vested benefits or Pillar 3a accounts or in vested benefits or Pillar 3a securities accounts.
   However, there is preferential treatment or a right to issuance under bankruptcy law here. For more information, see the question:
   «How are vested benefits and Pillar 3a credit balances protected in the event of a bankruptcy?»
4. Claims in the name of the holder and not in the name of the client (e.g. cash cheque or bill of exchange).
   Deposit insurance protects medium-term notes, provided they have been deposited with the issuing bank. For more information, see the question:
   «What type of deposits are protected?»
5. Claims in the form of bonds or similar securities or book-entry assets.
6. Credit balances not held in a government-issued currency (e.g. units of cryptocurrencies on accounts or WIR assets).
7. Credit balances on metal accounts, provided the client does not have an exclusive or alternative contractual right to payment in a government-issued currency.
8. Securities in a securities custody account: securities (stocks, bonds, funds, certificates, etc.) in the securities account are held in safekeeping by the bank, but they are the property of the client. In the event of a bankruptcy, they are issued to the client. The bank may have a contractual right of lien or offset to cover the client's debts to the bank (incl. mortgage).
9. Cryptocurrency units in a cryptocurrency securities account: cryptocurrency units (bitcoins, etc.) are issued to the client, provided they are individually allocated to the client or a group of clients and it is clear which share of the joint assets belongs to the client. The bank may have a contractual right of lien or offset to cover the client's debts to the bank (incl. mortgage).
10. Contents of bank safety deposit boxes («bank vault»): the contents of bank safety deposit boxes are not affected by the bankruptcy. The contents are released to the owner during the bankruptcy proceedings.
11. Assets that the bank receives as payment for a contract (e.g. purchase, rental or service contracts) are not protected deposits.
12. Beneficiaries of a life insurance wrapper.
13. Claims or compensation claims from derivatives.
14. Assets at providers that do not have a banking licence from the Swiss Financial Market Supervisory Authority FINMA. For more information, see the question:
    «At which providers are assets covered by deposit insurance scheme?»
15. Contractual and non-contractual claims for damages such as claims for compensation for non-existent values in the custody account.
16. Assets that are dormant at the time of the opening of bankruptcy proceedings.

• The protection is limited to CHF 100 000 per client and bank.
• If a client has multiple accounts at the same bank, the credit balances are added together, with a maximum amount of CHF 100 000 covered.
• Mortgages, loans, overdrafts and unbooked interest in favour of the client and fees are not taken into account, regardless of whether they are accrued, due or have expired. Accrued interest in favour of the client is taken into account.
• If the client’s total balances exceed CHF 100 000, the excess amount goes into the third creditor class for unsecured claims in the bank’s bankruptcy proceedings.

At the end of the proceedings, the client generally receives a share of the original balance in the third creditor class (known as a «bankruptcy dividend»).
For further details, see the question:
«What is the bankruptcy procedure for a bank?»

• Securities in a securities custody account: securities (stocks, bonds, funds, certificates, etc.) in the securities account are held in safekeeping by the bank, but they are the property of the client.
• In the event of a bankruptcy, they are issued to the client.
• The bank may have a contractual right of lien or offset to cover the client's debts to the bank (incl. mortgage).

• The mortgage is not affected by the bank’s bankruptcy. The mortgage contract remains in place.
• The client continues to owe the bank interest and mortgage payments.
• The client must repay the mortgage in full when due.
• The liquidator will contact all clients with a mortgage in writing to provide them with the details regarding the payment of interest, amortisation or repayment of the mortgage.
• The bank may not offset the mortgage against protected or preferential client deposits (i.e. up to CHF 100 000 per client and bank).
• However, in the case of deposits of more than CHF 100 000, offsetting may be permitted depending on the contractual relationship between the client and the bank.
• The client may contact the liquidator in writing to clarify any individual questions.

• The bank cannot offset client debts towards the bank (including mortgages) against protected deposits held by the client at the bank.
• However, in the case of deposits of more than CHF 100 000, offsetting may be permitted depending on the contractual relationship between the client and the bank.
• Mortgages, loans, overdrafts and unbooked interest in favour of the client and fees are not taken into account, regardless of whether they are accrued, due or have expired. Accrued interest in favour of the client is taken into account.

If the bank is closed due to a bankruptcy, all fixed-term and time deposits become due. This means the client may request payment, even if the fixed-term deposit or time deposit has a longer term to run.

• If several persons own an account together, this group is treated as an individual, separate client when it comes to protection.
• If this group holds multiple accounts, these are added together.
• The balance for the group is protected up to a total of CHF 100 000.
• If individuals in such a group have their own separate client relationship with the bank, a balance of up to CHF 100 000 is also protected for this separate client relationship.
• As an example, groups might comprise spouses, simple partnerships, communities of heirs or condominium associations.

Example 1:

• Mr and Mrs Smith have one joint account at the bank with a credit balance of CHF 140 000.
• Mr and Mrs Smith have a protected deposit of CHF 100 000 as a group.

Example 2:

• Mr and Mrs Smith have a joint account with a credit balance of CHF 140 000.
• Mrs Smith also has a personal account with a credit balance of CHF 50 000.
• Mr Smith also has a savings account with a credit balance of CHF 20 000.
• All the accounts are held at the same bank.
• Mr and Mrs Smith have a protected deposit of CHF 100 000 as a group from the joint account.
• The «surplus» share of CHF 40 000 falls into the third creditor class.
• «Surplus» amounts cannot be transferred to the other spouse or other persons.
• Mrs Smith's credit balance of CHF 50 000 and Mr Smith's credit balance of CHF 20 000 are also fully protected.
• The insurance in this example totals CHF 170 000.

• The credit balance on the vested benefits or Pillar 3a account (account solution) is not covered by deposit insurance.
  However, the credit balance is preferential under bankruptcy law up to a maximum of CHF 100 000 per client and pension fund (collocation in the second creditor class).
  The vested benefits and Pillar 3a credit balances are preferential in addition to and irrespective of the other protected and preferential deposits held by the individual policyholder at the bank (e.g. savings account).
  Claims from vested benefits and Pillar 3a accounts are paid out only during or at the end of the liquidation procedure. The credit balance is paid out to the pension fund.
  For more information, see the question:
  «What is the difference between preferential deposits and protected deposits?»
• Vested benefits and Pillar 3a credit balances in the form of securities in securities custody accounts (securities solution) are not directly affected by the bankruptcy of the bank and are not covered by the deposit insurance scheme.
  The securities are the property of the vested benefits or Pillar 3a fund and are issued to the pension fund if the bank becomes bankrupt.
  For this reason, it is not necessary to protect them through deposit insurance or preferential treatment under bankruptcy law.
• Vested benefits and Pillar 3a credit balances in the form of a policy at an insurance company (insurance solution) are not covered by the deposit insurance scheme or given preferential treatment under bankruptcy law if the insurance company becomes bankrupt. However, the credit balances are protected under insurance law.
  The policyholder’s claim is a restricted and unfunded obligation.
  If the insurance company becomes bankrupt, the policyholder will be paid from the proceeds of the restricted assets before all other creditors.

The payout process is as follows:

1. The liquidator appointed by the Swiss Financial Market Supervisory Authority FINMA contacts all clients immediately following the bank’s bankruptcy.
   The liquidator sends each client a form by post to request payout.
2. On the payout request form, the client indicates an account at another bank to which the protected deposit is to be paid out.
   The client returns the completed payout request form to the liquidator.
3. After the liquidator has received and reviewed the payout request form, he pays out the protected deposits.

The amount of time required for the payout depends on the bank’s structures and the cooperation of the client. A duration of several weeks can be expected.
As of 01.01.2028: After the liquidator has received the client's payout instruction, the aim is to pay out within seven working days.

• If the Swiss Financial Market Supervisory Authority FINMA initiates bankruptcy proceedings against a bank, FINMA appoints a liquidator to liquidate the bank.
• The liquidator uses the proceeds from the sale of the bank’s assets to pay creditor claims, to the extent possible.
• Creditors with claims against the bank include, for example,
  
  • clients,
  • employees and
  • suppliers.
• If the client’s deposits are not fully covered by the deposit insurance scheme (e.g. in the case of deposits in excess of CHF 100 000), these outstanding claims are included in the next stage of the bankruptcy procedure.
• When the bankruptcy proceedings are initiated, a deadline for creditors to submit their other claims is published.
• For the payout of protected deposits, see the question:
  «What should the client do to receive payout of the protected deposits and how long does this take?»
• If the liquidator is aware of all creditor claims and has sold sufficient bank assets, it commences with the payout to the creditors. In general, however, the protected deposits will have already been paid out to clients.

When making payouts, the liquidator must comply with the following legally prescribed sequence:

1. First, all first creditor class claims are paid out, as far as possible. 
   The first creditor class includes, for example, the salary claims of bank employees.
2. Second, all second creditor class claims are paid out, as far as possible.
   The second creditor class includes, for example, the claims of clients with protected or preferential deposits.
   However, by law, esisuisse takes the place of the client if esisuisse has made money available for payout of protected deposits («legal assignment»).
3. After this, all third creditor class claims for unpledged claims are paid out, as far as possible.
   The third creditor class includes all other claims that are not by laq in the first or second creditor class.

If the money is not sufficient to satisfy all the claims of a creditor class, the creditors in this creditor class will receive an equal percentage share of their claim («bankruptcy dividend»).

• Payments from an account at the bank concerned can no longer be made.
• E-banking and bank cards for cash withdrawals at ATMs or for payment at points of sale are deactivated.
• Standing orders are no longer carried out, either.
• Transfers to accounts at the bank are no longer processed (e.g. salaries and pensions).
• These transfers are automatically returned to the initiating party (e.g. employer, compensation fund, pension fund).

esisuisse recommends that clients who expect payments to their account (e.g. salary, pension) immediately contact the party initiating the transfer.
This party must be provided with the details of an account at another bank. It may be necessary to open an account with another bank first.

Affected clients who expect payment to their account (e.g. salary, pension) should immediately contact the party initiating the transfer (e.g. employer, compensation fund, pension fund).
This party must be provided with the details of an account at another bank. It may be necessary to open an account with another bank first.

• Deposit insurance is also used at cantonal banks with a state guarantee.
• The deposit insurance scheme ensures disbursement at the start of the liquidation procedure.
• In the case of a state guarantee, the canton covers the deposits at the end of the long-term liquidation procedure if any uncovered gaps still remain when the liquidation procedure is concluded.
• However, the amount of the state guarantee may be limited and as a result not all deposits may be guaranteed.
• The amount and scope of the state guarantee is governed by the respective cantonal law.
• Not all cantonal banks have a state guarantee.

• Each individual Raiffeisen cooperative is a separate bank (independent cooperative).
• Deposit insurance of a maximum of CHF 100 000 per client applies independently to each individual cooperative.
• However, branches and subsidiaries are not independent cooperatives.
• For this reason, it must be clarified in each individual case at which independent cooperative the deposit is booked.

• Currently, there are four systemically important banks:
  
  • UBS
  • PostFinance
  • Raiffeisen and
  • Zürcher Kantonalbank (ZKB).
• These banks have taken precautions and made contingency plans to ensure that their domestic deposit business can continue seamlessly, even if the bank gets into difficulty.
• However, deposits held at systemically important banks are still protected by deposit insurance.

• Some banking groups have a contractual joint liability scheme; in others, each bank stands on its own in the event of bankruptcy.
• esisuisse has no knowledge of the content of these contracts. esisuisse advises clients to make enquiries at the bank in this regard.

• Deposit insurance and personal liability on the part of private bankers are not the same, although the aim of both is to protect bank deposits.
• Deposit insurance comes into effect at the beginning of the liquidation process.
• Personal liability on the part of private bankers comes into effect at the end of a liquidation process that often takes years to resolve.
• However, to ensure that private bankers do not have to resort to personal liability, an option to restructure using the private bankers’ personal assets is a possibility.

The Federal Council can adjust the CHF 100 000 limit if its value is eroded.

Preferential and protected do not mean the same thing. Preferential is primarily a question of bankruptcy law. It means that the deposits fall into the second creditor class rather than the third.

Deposits that are preferential, but not protected, include:

1. Deposits booked at foreign branches of a Swiss bank, up to a total of CHF 100 000 per client and bank.
   If a client has deposits at a foreign branch of the bank, they are considered to be an individual, separate client of this branch.
   Deposits booked in Switzerland and deposits booked in a foreign branch are not added together for protection purposes or for privileged treatment under bankruptcy law.
2. Credit balances on vested benefits and Pillar 3a accounts up to CHF 100 000 per client. For more information, see the question:
   «How are vested benefits and Pillar 3a credit balances protected in the event of a bankruptcy?»

The distinction has the following effects:

1. Protected deposits are paid out through the deposit insurance scheme.
2. Preferential deposits at foreign branches of a Swiss bank are paid out immediately only if the bank has sufficient funds to cover the deposits immediately. Otherwise, they are paid out in the course of or at the end of the liquidation procedure.
3. Claims from vested benefits and Pillar 3a accounts are paid out only during or at the end of the liquidation procedure. The credit balance is paid out to the pension fund.

• Deposit insurance is regulated by Arts. 37a to 37k of the Banking Act.
• In addition, the Federal Council’s Banking Ordinance (in particular, Arts. 42a to 44a) and the Swiss Financial Market Supervisory Authority’s FINMA Banking Insolvency Ordinance contain provisions on deposit insurance.
• Art. 67, para. 2 of the Financial Institutions Act stipulates that the provisions of the Banking Act concerning deposit insurance apply analogously to securities firms.

• esisuisse answers general questions about the deposit insurance scheme in general.
• esisuisse cannot answer any questions about an individual client relationship with the bank (e.g. account balance, payout amount, contractual relationship, mortgage, account statements or the transfer of securities).
• esisuisse does not have access to client data.
• Questions about individual client relationships must be put to the liquidator in writing.

• All member states of the European Union (EU), the European Economic Area (EEA), the United Kingdom (UK, GB, England) and the United States of America (USA) have a deposit insurance scheme.
• The maximum amount per client is EUR 100 000 in the EU/EEA, GBP 85 000 in the UK and USD 250 000 in the USA.
• However, the statutory provisions vary in all countries and are not comparable with Switzerland.

For risk distribution purposes, it is advantageous to distribute deposits across banks with different business models. All banks in Switzerland are members of the esisuisse deposit insurance scheme.
Consequently, all deposits are protected within the framework of the legal provisions.

For more information, see the question:

«Up to what amount are deposits protected?»