Background

Under the deposit guarantee scheme, deposits with Austrian banks are generally protected on a bank's insolvency, up to EUR 100,000. This sum may be higher in certain cases, for example, for sums deposited from the sale of a private residential property within 12 months before the insolvency, the guaranteed amount is EUR 500,000. 

An agency responsible for paying out the guaranteed amounts recently claimed that if the customer – prior to the bank’s insolvency - transferred the funds to another account held by them at the same bank, only the base amount of EUR 100,000 would be protected. 

The Austrian Supreme Court has provided welcome clarification in the matter.  

Decision

The Austrian Supreme Court held that the central question is whether a credit balance resulting from a protected deposit is still available when the insolvency occurs. 

If a customer holds several accounts and there are transactions between these accounts, the overall guaranteed sum is determined by taking into account these transactions and the remaining credit balance on all of the customers’ accounts held with the bank. 

The Austrian Supreme Court concluded that even if funds from protected deposits are transferred between accounts (held with the same bank), the customer is still entitled to the higher secured amount as long as the protected deposits are reflected in the customer's remaining overall balance with the bank.

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