Overnight deposit is a good possibility to earn higher interest over night on your current account.
- It lets your money earn a return even while it is not directly working in your business.
- The bank will transfer the interest calculated on your current account as early as the next business day.
- The balance of your current account is checked daily to calculate the interest on overnight deposits.
- The bank transfers the accrued interest on your current account on the following business day.
- Interest on overnight deposits accrues if the close-of-day balance of your current account is 64000 euros or more, or the equivalent in USD, SEK, NOK, GBP.
- When you sign the contract, you should specify the current account numbers and currencies for which you want the overnight deposit contract.
From 01.10.2017, Nordea and DNB have combined their knowledges and created a new bank Luminor. Funds deposited in Luminor are guaranteed with the Estonian deposit guarantee scheme. The deposit guarantee scheme protects both deposits and funds on bank accounts.
The deposit guarantee scheme was established with the aim of managing banks` financial risk. The deposit guarantee scheme guarantees payment of compensation for finances kept in banks, if the bank is not able to pay out the finances customers have deposited with them due to insolvency or if the bank`s supervisory institution cancels the bank`s license.
The deposits guarantee scheme covers both private and legal persons` deposits (see exclusions for legal persons below).
How the deposit guarantee scheme works
Customers have the right to compensation if the bank is unable to fulfil its obligations due to insolvency. Customers have the right to compensation also in case the Estonian Financial Inspectorate decides to cancel Luminor’s license and an order is given to use the funds in the Guarantee Fund.
The maximum size of the compensation is 100 000 euros per customer. If the total amount of deposits belonging to the customer is below 100 000 euros, the actual value of the deposits is compensated. If the account has been opened in two or more people`s name, then the maximum sum of compensation applies to each person separately.
If many customers` money is kept on an account (e.g. law offices, asset management companies), then according to the general rule of the Estonian deposit guarantee scheme, deposits are guaranteed to the actual owners of the funds i.e. to each customer separately, to the maximum compensation extent.
Payment of compensation takes place through the Estonian deposit guarantee sub-fund.
Additional information about the Swedish deposit guarantee scheme is available from the Guarantee Fund`s homepage.
QUESTIONS AND ANSWERS
1. How are the sums to be compensated to customers calculated?
Deposits protected under the deposit guarantee scheme are compensated with the interest accrued by the date the bankruptcy decision or the Estonian Financial Inspectorate`s decision is announced. The maximum limit of 100 000 euros is applied to the total sum deposited by a single depositor in one bank, but not to each opened deposit separately.
2. Which legal persons does the deposit guarantee scheme not cover?
- National authorities and local municipality units
- Credit institutions
- Creditors and credit intermediaries
- Financing institutions
- Insurance providers and reinsurance undertakings
- Investment funds and fund managers
- Investment firms
3. If the customer has both a loan and deposits at the same bank, then does the loan balance reduce on account of the guaranteed deposits in case of a compensation case?
The right to compensation is not off-set with debts that the customer has at the bank.
4. What currency is the compensation calculated and paid in?
The compensation is calculated and paid in euros..