How safe is your money in the bank? That’s a question the Fondo de Garantía de Depósitos in Madrid answers.
The Fondo de Garantía de Depósitos or FGD is Spain’s Deposit Guarantee Fund. It protects depositors if a bank fails. Think of it as a safety net for your savings. It is located on Calle de José Ortega y Gasset.
The FGD was created in November 1977. Its goal was simple. Protect depositors especially those with modest savings. It also aimed to ensure the banking sector operates responsibly. Other European countries and the United States had similar systems. Spain followed their lead. Initially the Banco de España managed the FGD.
The guarantee originally covered up to 15000 euros per depositor. This increased to 20000 euros in 2000. Since 2008 the coverage stands at 100000 euros.
Before 2011 there were three separate funds. One covered banks. Another covered savings banks. The third covered credit cooperatives. In October 2011 these merged into the Fondo de Garantía de Depósitos de Entidades de Crédito.
In 2021 the fund held over 4 billion euros in assets. It received over 1 billion euros in contributions. It had investments in public debt exceeding 4 billion euros. 116 institutions were members. Since 2009 it has provided over 23 billion euros in net aid.
The Fondo de Garantía de Depósitos operates under strict regulations. These are set by Royal Decree-Law 16/2011. A management commission governs the FGD. It includes representatives from the Ministry of Economy the Ministry of Finance and the Bank of Spain. Representatives from member credit institutions also participate.
All Spanish credit institutions must belong to the Fondo de Garantía de Depósitos. The official Credit Institute is an exception. The Bank of Spain informs the European Banking Authority of each new member. Branches of non-EU credit institutions may join. If they offer similar protection they may be exempt.
The FGD protects account balances. It also protects funds from temporary transactions. Nominated deposit certificates are covered too. The protection applies to deposits in any currency. The deposits must be in Spain or another EU member state.
The guarantee covers each depositor. This applies whether they are individuals or companies. The limit applies to the total deposits. The limit is 100000 euros per institution.
The Fondo de Garantía de Depósitos is more than just a fund. It is a promise. It is a promise that your savings are safe. It offers peace of mind in uncertain times. The FGD helps maintain confidence in the Spanish banking system. It stands as a silent guardian of your financial security here in Madrid. Its offices are on Calle de José Ortega y Gasset.