Are Pots covered by the EU deposit guarantee scheme?


(Duncan) #1

Perhaps a dumb question, but it’s hard to know how things work on the backend at Monzo. Does money in pots (up to £75k, right?) still get covered by the EU deposit guarantee scheme?


#2

The EU scheme is €100,000 and the UK’s implementation of the EU Law is at £85,000 (it is no longer £75,000 as was adjusted to take into account the deteriorated value of Sterling after the Referendum)


(MikeF) #3

Whatever your account is covered for the Pots are covered for since they’re inside your account and not separate things.


(Kevyn) #4

I’m happy to be corrected but I understood that the Financial Services Compensation Scheme is all about overall deposits and/or savings in a bank, not specific bank accounts or parts thereof. Your overall deposits and/or savings in Monzo Bank Limited, up to £85,000, are protected.


(Jolin) #5

It’s in fact about overall deposits/savings with a banking group. People with more than £85k combined in savings accounts are recommended to make sure they have accounts at different banking groups to ensure it’s all covered. If you have £60k in savings at RBS and another £40k savings in NatWest, there’s £15k that wouldn’t be covered by the FSCS (£100k-£85k), no matter how many accounts they are spread across. You’d need to, for example, open an account with TSB for the £40k to ensure it’s all covered by the FSCS.


(Duncan) #6

Would be good to hear something from a Monzo staffer about this.


(MikeF) #7

You want bank staff to confirm thay comply with the law on a public forum? I can’t imagine them saying anything else!


(Naji Esiri) #8

Money stored in pots is just ringfenced in your account - it’s not kept in a separate account, so any money in there is still covered by FSCS protection :slightly_smiling_face:


#9

This statement seems like you are saying how silly you are for asking something so obvious

Just bear in mind not everyone is so savvy as some here. Nothing wrong in asking for an official view on something which is not clear for someone.


(MikeF) #10

As always, it’s very hard to be responsible for the way other people read a post.

Personally, I find the ‘assumed voice’ that I read things in very often says far about my thoughts about the person or opinion being expressed than it does about the individual who actually wrote the words I’m reading.


(Duncan) #11

Thanks Naji! Great to know.


(Duncan) #12

The law according to what you think it is. Now, I was pretty sure that Pots didn’t change anything, but you never know, and I’d rather be sure by asking than take your opinion on the matter. All due respect, but you’re just some guy on the internet with a keyboard.


(MikeF) #13

True enough.

Other people’s opinions were more informed than mine in any case so I was actually responding based on their information.


#14

No such thing. You might be asking he exact same question that others might be thinking.


(Kevyn) #15

Monzo cannot change the law. They also cannot state that some money is covered, and others are not. The law is clear. Any deposits and savings with the bank group are protected.

It does make me wonder if legally the prepaid account money is actually covered because Monzo is now a bank, but that is a question which probably wouldn’t ever be tested with prepaid disappearing soon.


#16

Not strictly true as under the deposit protection scheme technically there are certain exceptions to the rules including deposits from reinsurance entities etc.

A deposit is excluded from protection if:
(1) The holder and any beneficial owner of the deposit have never been identified in accordance with money laundering requirements. For further information, contact your bank, building society or credit union.
(2) The deposit arises out of transactions in connection with which there has been a criminal conviction for money laundering.
(3) It is a deposit made by a depositor which is one of the following:
credit institution
financial institution
investment firm
insurance undertaking
reinsurance undertaking
collective investment undertaking
pension or retirement fund (unless they are deposits by personal pension schemes, stakeholder pension schemes and occupational pension schemes of micro, small and medium, sized enterprises)
public authority, other than a small local authority.

For further information about exclusions, refer to the FSCS website at www.FSCS.org.uk


(Kevyn) #17

The Bank of England defines a deposit as:

  1. a credit balance which results from funds left in an account or from temporary situations deriving from normal banking transactions and which a credit institution is required to repay under the legal and contractual conditions applicable, including a fixed-term deposit and a savings deposit, but excluding a credit balance where:
    a) its existence can only be proven by a financial instrument as defined in MiFID II, unless it is a savings product which is evidenced by a certificate of deposit made out to a named person and which exists in a Member State on 2 July 2014;
    b) its principal is not repayable at par; or
    c) its principal is only repayable at par under a particular guarantee or agreement provided by the credit institution or a third party;
  2. a share in a building society, excluding a deferred share;
  3. a share in a credit union, excluding a deferred share; or
  4. a share in a Northern Ireland credit union, excluding a deferred share.

(system) #18

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