Under the Deposit Guarantee Scheme, if a temporary large deposit is held for a limited period, what is the maximum coverage limit during that period?

Under the Deposit Guarantee Scheme, if a temporary large deposit is held for a limited period, what is the maximum coverage limit during that period?

• A. €1,000,000
• B. €150,000
• C. €250,000
• D. €200,000

Answer: (A)

The important idea is that the Deposit Guarantee Scheme can provide a temporary higher level of protection for a large deposit held for a short period. While the usual protection is up to €100,000 per depositor per credit institution, there is a special provision that raises this to up to €1,000,000 for deposits held briefly to support large transactions or temporary cash balances. So, during that limited period, a depositor can have up to €1,000,000 covered with the same institution. The other amounts don’t apply to this temporary boost; they reflect lower, non-temporary limits, which is why they aren’t the correct maximum during the period.

The important idea is that the Deposit Guarantee Scheme can provide a temporary higher level of protection for a large deposit held for a short period. While the usual protection is up to €100,000 per depositor per credit institution, there is a special provision that raises this to up to €1,000,000 for deposits held briefly to support large transactions or temporary cash balances. So, during that limited period, a depositor can have up to €1,000,000 covered with the same institution.

The other amounts don’t apply to this temporary boost; they reflect lower, non-temporary limits, which is why they aren’t the correct maximum during the period.