Insurance of deposits of individuals. Deposit Insurance: The Law In Simple Words
Sooner or later, everyone has a question about how to keep their savings. The most common way to invest money today is to place them on deposit accounts of commercial banks. It protects savings from the damaging effects of inflation and brings a small income. But many citizens lost confidence in the banking system during the years of economic instability.
What to do if the bank, the client of which you are, announced financial difficulties? Do you need to worry if there is a salvation in this situation?
Insurance of deposits of individuals is a system of protection of funds of the population in case of bank ruin or deprivation of its license. Thus, the state guarantees the financial security of ordinary citizens.They get their bonuses and banks - deposit insurance of individuals significantly increases the confidence of customers.
Similar systems exist in many countries of the world. In Russia, deposit insurance appeared in 2003. For what purpose was it introduced?
- Stabilization of the state financial system.
- Reducing the risks associated with banking operations.
- Preventing the worsening financial crises.
- Maintaining public confidence in the banking sector.
Deposit insurance is governed by federal law. The Deposit Insurance Agency supervises the activities of banking institutions and protects the interests of investors. The duties of the corporation include the maintenance of the register of banks, the collection of insurance premiums, accounting for investors and the payment of refunds, the preservation and increase of the insurance fund by investing free cash. The activities of the Deposit Insurance Agency are controlled by the state. Due to the fact that the Agency is the only organization that insures deposits, the law clearly regulates its activities.
Where does the corporation get money for refunds? The funds are accumulated in the accounts of the fund and come from several sources:
- Quarterly, commercial banks participating in the insurance program pay insurance premiums.
- The Agency actively multiplies and invests the funds received.
- Part of the financial resources forming the insurance fund was received directly from the state.
Legislation does not require the conclusion of additional contracts for deposit insurance. All citizens' deposits that are suitable for the state program are considered insured. Thus, the object of insurance is the personal deposits of citizens, payroll accounts and personal savings certificates.
There are groups of funds that are not included in the compulsory deposit insurance in banks:
- Accounts of lawyers, notaries and other persons, if they are intended for professional activities.
- Contributions, savings certificates and bearer books.
- Contributions transferred in trust.
- Electronic money.
- Deposits in the branches of Russian banks located abroad.
- Nominal accounts (with the exception of mortgage, escrow accounts and open guardians in favor of the beneficiaries).
Insurance of deposits of individuals raises many questions from ordinary citizens.
The most common of these concerns whether insurance covers interest on deposits, that is, whether the amount of capitalized interest is insured.
The calculation of insurance compensation takes into account the interest that is attached to the principal amount of the deposit account, this is reflected in the bank agreement. This takes into account only those interest accrued at the time of termination of the bank. If the investor took interest, they will not be taken into account when determining the amount of insurance compensation.
Bank customers do not always know in which case they may need such a service as deposit insurance. The law clearly defines the concept of an insured event. This is a review from the bank where the deposit is placed, the license to operate. A bank of Russia may deprive a license of an institution, for example, due to poor financial condition (bankruptcy). Also an insured event is the introduction of a moratorium on the satisfaction of bank creditors.In this case, it is the duty of the Deposit Insurance Agency to make insurance payments.
Deposit insurance is an effective system for increasing the volume of deposit operations. At the closure of the bank, deposits are reimbursed in full with interest due, but in total not more than 1,400,000 rubles. If a depositor has several deposits in a bankrupt bank, the payments on them are summed up, but cannot exceed 1,400,000 rubles.
If insured events occurred in several banks, the depositor is entitled to a full refund on each bank (in other words, having 2 million rubles in Bank A and 2 million in Bank B, we will receive 1.4 million payments for each bank in separately, i.e. 2.8 million in total). Obviously, saving money is safer in different institutions.
The amount of payment is calculated according to the end of the day the insured event. The amount of compensation in foreign currency is paid in rubles at the rate of the day the insured event occurs.
Deposit insurance does not always provide a full refund. If the amount of the deposit exceeds the maximum possible insurance payment,then, after the bank goes through a bankruptcy procedure, the depositor (as the creditor of the first stage) will receive compensation for the rest of the deposit. It may take a long time, from six months. Speed is another advantage of deposit insurance.
The procedure for applying for payment
Why is deposit insurance getting more widespread in the world? The payment system for this type of insurance is simple and significantly strengthens the credibility of national banks. Investors and their heirs are traditionally entitled to reimbursement. It is impossible to acquire the right to payment in another way.
The depositor may apply for payment from the day the insured event occurs. Deadline - the day of completion of the bankruptcy proceedings or the end of the moratorium.
The procedure for applying for payment is strictly regulated by law. Deposit insurance of individuals is terminated if the investor missed the term of treatment. In this case, he may apply to the Agency for an extension of this period. Term recovery is possible if:
- irresistible force or emergency;
- the depositor was in military service;
- The pass was associated with a severe health condition or a period of entry into the inheritance.
When contacting you must provide:
- Statement written on the model provided by the Agency.
- A passport or other identity document.
- Documents confirming the right to inheritance for heirs and power of attorney for representatives of the depositor.
Insurance indemnities are paid by the Agency as required by law. Insurance of deposits of individuals is entirely under its jurisdiction. After the occurrence of the insured event, the Agency informs the depositors about the place, time and procedure for receiving applications for insurance claims. After the depositor provides the necessary documents, the payment is made within three days, but not earlier than 2 weeks from the day of the insured event.
If the depositor does not agree with the amount of the payment, then the compensation can be appealed. After submission of additional documents, the Agency will recalculate within 10 calendar days. After receiving the insurance indemnity, the depositor receives a certificate of the amounts paid and sends it to the bank.Payments are made in rubles, in cash or to a bank account.
So now you know how deposit insurance works. The system of banking institutions is stabilized when using this financial instrument, and the savings of depositors are under state protection.