How does the deposit insurance system for individuals work?
Posted: Tue Feb 18, 2025 10:28 am
For more than 20 years, Russia has had a state deposit insurance system (SDI). We explain why it is needed, how it works, and which deposits are subject to insurance.
What is deposit insurance
Mandatory deposit insurance is a special mechanism for protecting the savings that bank clients keep in accounts and deposits. In the event of an insured event, the depositor can receive monetary compensation within the limits established by law.
Why is a deposit insurance system needed?
The SSS is a system that benefits all market participants:
Banks are interested in receiving depositors' money. For them, this is the basis for business development, and they want to guarantee the safety of invested funds in order to attract more assets.
The state is focused on supporting the banking industry. For it, this is gansu mobile number database a guarantee of a stable market economy. When banks develop, they take more loans from the Central Bank, buy government bonds, and pay large amounts of taxes. All this replenishes the state budget. Therefore, it is so important to provide favorable and safe conditions for depositors.
Individuals need a reliable investment method that not only provides a guaranteed income but also eliminates risks. The best of these methods is considered to be a bank deposit. Thanks to insurance, the depositor is guaranteed to keep the money invested, even if the bank has difficulties.
How the system works
The law that regulates the SSS is Federal Law No. 177, which came into force in 2003. It lists the principles of the system:
Each bank accredited by the Central Bank is obligated to participate in the deposit insurance system.
What is deposit insurance
Mandatory deposit insurance is a special mechanism for protecting the savings that bank clients keep in accounts and deposits. In the event of an insured event, the depositor can receive monetary compensation within the limits established by law.
Why is a deposit insurance system needed?
The SSS is a system that benefits all market participants:
Banks are interested in receiving depositors' money. For them, this is the basis for business development, and they want to guarantee the safety of invested funds in order to attract more assets.
The state is focused on supporting the banking industry. For it, this is gansu mobile number database a guarantee of a stable market economy. When banks develop, they take more loans from the Central Bank, buy government bonds, and pay large amounts of taxes. All this replenishes the state budget. Therefore, it is so important to provide favorable and safe conditions for depositors.
Individuals need a reliable investment method that not only provides a guaranteed income but also eliminates risks. The best of these methods is considered to be a bank deposit. Thanks to insurance, the depositor is guaranteed to keep the money invested, even if the bank has difficulties.
How the system works
The law that regulates the SSS is Federal Law No. 177, which came into force in 2003. It lists the principles of the system:
Each bank accredited by the Central Bank is obligated to participate in the deposit insurance system.