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Livret A, current account, stocks, life insurance… what guarantees for your money?


Even if the Covid-19 crisis has nothing to do with that of 2008, many savers fear further bankruptcies. A

Given the scale of the Covid-19 recession, some customers are concerned about the fate of their cash and savings. Their fear? Whether their bank or investment intermediary files for bankruptcy. This risk exists, even if it has reduced with the tightening of banking regulations after the 2008 financial crisis. Since then, a fund has been created, the Deposit Guarantee and Resolution Fund (FGDR). It is responsible for compensating savers for their lost assets in the event of the bankruptcy of a French bank or investment company or with a subsidiary in France.

"The FGDR was created in 2009 in order to avoid any impact for the customers of this bank," explains Thierry Dissaux, the president of its management board. In ten years, the Fund, which has 4.5 billion euros from contributions from banks, has intervened in securities guarantees twice in 2010 and 2013 ”. And in the face of the coronavirus crisis, the FGDR is more than ever "vigilant, gun on foot, ready to react, as always", assures its president. Here are its guarantees.

Deposit guarantee

Be aware that money deposited in a bank account - deposits or savings on an unregulated passbook (CEL, PEL, PEP) - is guaranteed up to 100,000 euros by the FGDR. "The ceiling was raised after the 2008 crisis to better cover bank customers, but also to increase confidence in the banking sector and avoid movements of concern", underlines Thierry Dissaux.

This guarantee is aimed at all individuals, individual entrepreneurs, associations, groups and also companies (SA, SARL, EURL, etc.). It is valid per depositor and per establishment. In other words, if your company has several accounts in the same bank, all your deposits will be added up and compensated up to 100,000 euros maximum. So, if you have 120,000 euros with one establishment, you are better off placing 20,000 euros in another to protect all your capital.

Guarantee of regulated booklets

The money accumulated on the Livret A, the LDDS, or the LEP benefits from a specific global guarantee, also capped at 100,000 euros. This guarantee is again operated by the FGDR on behalf of the State according to the same rules as the deposit guarantee.

Title guarantee

Whatever the currency, your shares, bonds held directly or through a PEA, your shares or shares in a collective investment scheme (Sicav, FCP, savings plan), your debt securities, but also all attached cash accounts are covered up to 70,000 euros if you meet a double condition. Your securities must have "disappeared", in other words, no longer be accessible and your intermediary must be cessation of payments.

Mere failure is not enough. "Because the ownership of the securities resists bankruptcy and you remain the owner of your titles", recalls Thierry Dissaux. So no need for the FGDR. On the other hand, “if, in the event of fraud or an IT incident, your securities disappear and if the establishment responsible, instead of returning your securities to you or reimbursing them on the date of the loss, does bankruptcy, we intervene, he specifies. This is what happened in 2010 to the European company of private management (EGP). The customers of its branch in Italy could not recover the securities they held, these having disappeared offshore (Editor's note: abroad) when the company went bankrupt.

Choose your bank wisely

Do not confuse bank and payment institution. Because the fund only covers banks with their banking license in France and subsidiaries of foreign banks with their head office in France. This includes online banks, subsidiaries of large banking groups (Boursorama, Fortuneo, BforBank, Monabanq, Orange Bank, Ma French Bank) and brands developed by banks already approved: Avantoo (Crédit mutuel), C-Zam (Carrefour Banque ), Eko (Crédit agricole), Hello Bank (BNP Paribas).

But beware of fintechs and payment institutions like Nickel Account (even if it is a subsidiary of BNP Paribas), Lydia and Pixpay. These do not have a banking license and you will therefore not be covered by the FGDR in the event of bankruptcy. However, some, such as Qonto, "confine" their customers' money to a partner bank member of the FGDR (Crédit Mutuel), thus covering your deposits.

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Finally, be careful, because some players operate directly in France with only the banking approval of their country of origin. This means that their clients in France are not covered by the FGDR, but by the fund of their country of origin, which does not necessarily meet the same compensation conditions. This is the case for Revolut, whose approval comes from Lithuania, N26 (Germany), ING Direct (Netherlands) and Starling Bank (United Kingdom). Before signing any contract, be sure to check the legal form of your future establishment. To help you, the FGDR has created a search engine listing its members.

How does compensation work?

The Fund intervenes as a last resort at the request of the Supervisory Authority and resolution (ACPR) when the bankruptcy is inevitable. Consequently, your compensation is triggered automatically, without any prior action on your part. The FCPR creates a secure compensation area for customers to be referenced. "It is important to have another bank account to receive compensation from your funds," says Thierry Dissaux.

The special case of life insurance

In the case of a life insurance policy, taken out through a bank or directly with an insurer, your cover in the event of bankruptcy amounts to 70,000 euros per insured and per insurer, whatever that is the number of contracts signed at this one. Thus, if you hold several contracts with the same insurer, your guarantee will be capped at 70,000 euros. In the event of co-subscription, the amount of compensation doubles to 140,000 euros. Created in 1999, the Personal Insurance Guarantee Fund (FGAP) is the only one able to compensate you upon referral from the ACPR.

Source: leparis

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