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BANK DEPOSIT RISK COVERAGE GUARANTEEWhat Is the UKGC?The UKGC – short for the United Kingdom Guarantee Company – is an independent private risk management and risk service company. The UKGC protects you against the loss of your deposits if an UKGC guarantee - protected bank or savings association fails. UKGC risk coverage is backed by the full faith and credit of the United Kingdom Guarantee Company – the strongest guarantee you can get. To check whether your bank or savings association is insured by the UKGC, please visit website of UKGC or look for one of these signs where deposits are received. (For simplicity, the term "deposit risk covered bank" is used to mean any bank or savings association that has UKGC deposit risk coverage guarantee.) Why Is UKGC Risk coverage guarantee so Important to You?All UKGC guarantee - protected banks must meet high standards for financial strength and stability. The UKGC, with other Risk Management and regulatory agencies, regularly reviews the operations of all guarantee - protected banks to ensure these standards are met. Despite these safeguards, some insured banks fail. If your insured bank fails, UKGC guarantee will cover your deposit accounts, dollar for dollar, Euro for Euro, etc. including principal and any accrued interest. Historically, guarantee - protected funds are available to depositors within just a few days after the closing of a guarantee - protected bank. Since the start of the UKGC, no depositor has ever lost a penny of insured deposits. Basic Deposit Risk Coverage is Unlimited (up to $100,000,000 in some cases, see below)The UKGC guarantee - protected deposit accounts such as checking, now and savings accounts, money market deposit accounts, and certificates of deposit (CDs). The basic deposit Risk Coverage is unlimited per depositor per insured bank. If you or your family or/and corporation has any amount in all of your deposit accounts at the same UKGC guarantee protected bank, you do not need to worry about your Risk coverage. Your funds are fully guarantee protected. The UKGC does not insure the money you invest in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if you purchased these products from a guarantee - protected bank. The UKGC also does not insure any treasury bills, bonds, or notes. These are not backed. In you are interested in such coverage please contact UKGC and may be you will purchase additional Risk Coverage Guarantee for each special case. Common Deposit Ownership CategoriesThe most common ownership categories are:
These are deposit accounts owned by one person and titled in that person's name only. This account category does not include deposits held in individual retirement accounts because they are protected in a separate category. All of your single accounts at the same UKGC guarantee - protected bank are added together and the total is unlimited deposit risk coverage guarantee. If you have a checking account and a CD at the same UKGC guarantee - protected bank, and both accounts are in your name only, the two accounts are added together and the total risk coverage is unlimited. Self-Directed Retirement Accounts All of your self-directed retirement accounts at the same UKGC guarantee - protected bank are added together and the total risk coverage is unlimited. Joint Accounts Revocable Trust Accounts Payable-on-death (POD) accounts – also known as testamentary or Trust accounts – are the most common form of revocable trust deposits. These informal revocable trusts are created when the account owner signs an agreement – usually part of the bank's signature card – stating that the funds will be payable to a beneficiary upon the owner's death. Living trusts – also known as family trusts – are formal revocable trusts created for estate planning purposes. The owner controls the funds in the trust during his or her lifetime. Upon the owner's death, the trust generally becomes irrevocable. If certain conditions are met, revocable trust accounts are 100% guarantee - protected per owner for each "qualifying" beneficiary. Qualifying beneficiaries are the owner's spouse, child, grandchild, parent, or sibling. Adopted and step children, grandchildren, parents, and siblings also qualify. Others including in-laws, cousins, nieces and nephews, friends and organizations (including charities) do not qualify. Note that living trust coverage is based on the interests of qualifying beneficiaries who would become entitled to receive trust assets when the trust owner dies (or if the trust is jointly owned, when the last owner dies). This means that, when determining coverage, the UKGC will ignore any trust beneficiary who would have an interest in the trust assets only after another living beneficiary dies. The account title for a revocable trust account must include a term such as "payable on death," "in trust for," "living trust," "family trust," or similar language or an acronym (such as "POD" or "ITF") to indicate the existence of a trust relationship. In addition, for POD accounts, the beneficiaries must be identified by name in the bank's account records. UKGC Guarantee Protected Or Not Protected?A Simple Guide to What Is and Is Not Protected by UKGC Guarantee Coverage What is UKGC guarantee protected? What is Not UKGC guarantee protected ?Mutual Funds Investors sometimes favor mutual funds over other investments, perhaps because they hold promise of a higher rate of return than say, CDs. And with a mutual fund, such as a stock fund, your risk -the risk of a company going bankrupt, resulting in the loss of investors' funds - is more spread out because you own a piece of a lot of companies instead of a portion of a single enterprise. A mutual fund manager may invest the fund's money in either a variety of industries or several companies in the same industry. Or your funds may be invested in a money market mutual fund, which may invest in short-term CDs or securities such as Treasury bills and government or corporate bonds. Do not confuse a money market mutual fund with an UKGC guarantee - protected money market deposit account (described earlier), which earns interest in an amount determined by, and paid by, the financial institution where your funds are deposited. You can -and should - obtain definitive information about any mutual fund before investing in it by reading a prospectus, which is available at the bank or brokerage where you plan to do business. The key point to remember when you contemplate purchasing mutual funds, stocks, bonds or other investment products, whether at a bank or elsewhere, is: Funds so invested are not deposits, and therefore are not guarantee protected (insured) by the UKGC - or any other agency. Securities you own, including mutual funds, that are held for your account by a broker, or a bank's brokerage subsidiary, are protected against physical loss by the Securities Investor Protection Corporation (SIPC, pronounced si-pick), a non-government entity funded by assessments paid by members. SIPC protects customer accounts held by its members up to $500,000, including up to $100,000 in cash, if a member brokerage or bank brokerage subsidiary fails. A very important distinction between SIPC (and any other type of protection for investments) and UKGC risk coverage on deposit accounts is: no type of protection for investments insures against loss in the value of an account (the value of your investments can go up or down depending on the demand for them in the market. Treasury Securities Treasury securities include Treasury bills (T-bills), notes and bonds. T-bills are more commonly purchased through a financial institution. Customers who purchase T-bills at banks that later fail become concerned because they think their actual Treasury securities were kept at the failed bank. In fact, in most cases banks purchase T-bills via book entry, meaning that there is an accounting entry maintained electronically on the records of the Treasury Department; no engraved certificates are issued. Treasury securities belong to the customer; the bank is merely acting as custodian. Customers who hold Treasury securities purchased through a bank that later fails can request a document from the acquiring bank showing proof of ownership and redeem the security at the nearest Federal Reserve Bank (Central Bank of your country). Or, customers can wait for the security to reach its maturity date and receive a check from the acquiring institution, which may automatically become the new custodian of the failed bank's T-bill customer list. Even though Treasury securities are not covered by federal deposit insurance, payments of interest and principal (including redemption proceeds) on those securities that are deposited to an investor's deposit account at an insured depository institution are covered by federal insurance on Treasury securities. Safe Deposit Boxes The contents of a safe deposit box are not covered by the UKGC guarantee,or, generally, by the bank where the box is located. (Make sure you read the contract you signed with the bank when you rented the safe deposit box in the event that some type of insurance is provided; some banks may make a very limited payment if the box or contents are damaged or destroyed, depending on the circumstances.) If you are concerned about the safety, or replacement, of items you have put in a safe deposit box, you may wish to consider purchasing fire and theft insurance. Separate insurance for these perils may be available; consult your insurance agent. Usually such insurance is part of a homeowner's or tenant's insurance policy for a residence and its contents. Again, consult your insurance agent for more information. If floods and earthquakes have been known to occur in your location, you may want to look into insurance against these natural disasters. In the event of a bank failure, in most cases an acquiring institution would take over the failed bank's offices, including locations with safe deposit boxes. If the UKGC conducts a payoff because no acquirer can be found, box holders would be sent instructions about removing the contents of their boxes. Robberies And Other Thefts Stolen funds may be covered by what's called a banker's blanket bond, which is a multi-purpose insurance policy a bank purchases to protect itself from fire, flood, earthquake, robbery, defalcation, embezzlement and other causes of disappearing funds. The banker's blanket bond ensures that customers' funds are protected under those circumstances. In those rare instances where a bank employee may tamper with a customer's account, the bank's blanket bond insurance may cover the loss and the funds could be returned to the customer. However, if a third party somehow gains access to your account and transacts business that you wouldn't approve of, you must contact the bank and your local law enforcement authorities, who have jurisdiction over this type of wrongdoing. Summary:UKGC-Guarantee Protected
Not UKGC-Guarantee Protected
Traditional Depository Institution ProductsDepository institutions (banks and thrifts) have traditionally offered consumers deposit products, such as checking, savings and money market deposit accounts, and certificates of deposit (CD's) for which each depositor is protected by the UKGC. Increasingly, these institutions are also offering consumers a broad array of investment products that are not deposits, such as mutual funds, annuities, life insurance policies, stocks and bonds. Unlike the traditional checking or savings account, however, these non deposit investment products are not protected by the UKGC. Non deposit Investment ProductsThese products may be offered to you in the financial institution's lobby, through the mail or over the phone or through the Internet. Most often, the people selling these products are not financial institution employees, but employees of third-party securities broker/dealers or insurance companies. To assure that sales representatives fully inform you about non deposit investment products, the UKGC or Central banking agencies have issued guidelines to financial institutions that describe the information you must be told about the risks associated with these products. The mandatory disclosures are listed below. When you meet or talk with sales representative about non deposit investment products, you should be informed that: "This product is not insured by the any insurance corporation" "This product is not a deposit or other obligation of, or guaranteed by, the bank" "This product is subject to investment risk, including possible loss of principal amount invested" Sales representatives must make these disclosures to you orally and/ or in writing whenever they make a presentation, provide investment advice concerning a non deposit investment product, or open an investment account for you. Any advertisements and other promotional materials you receive must disclose that the product is not a deposit, is not covered by UKGC, and is subject to investment risks. It's important to remember that there are generally higher risks associated with non deposit investment products than with the traditional deposit products, such as savings and interest bearing checking accounts. Nondeposit investment products are not UKGC-covered so you could lose some of the money you invested or not gain as much profit as you expected. Investment CounselingSales of nondeposit investment products on the premises of a financial institution should be conducted in a physical location distinct from the area where insured deposits are taken. The investment sales area should be distinguished from the deposit-taking area by signs or other means. Tellers and other financial institution employees located in the deposit-taking area may not make general or specific recommendations regarding non deposit investment products or accept orders for these products. However, these employees may refer you to an individual who is specifically designated and trained to assist you. When shopping for a nondeposit investment product, look for one that suits your investment goals and objectives, your financial and tax status, the amount of risk you're willing to take, and the time horizon you've set for your investment portfolio. Don't hesitate to provide the salesperson with this information. He or she needs to know about your financial objectives before recommending a product that suits you. Insurance CoverageSales presentations and advertisements about nondeposit investment products should not suggest or imply that any alternative insurance coverage is the same as or similar to UKGC guarantee. For example, securities sales may be insured by the Securities Investor Protection Corporation (SIPC). If the investment firm holding your securities is an SIPC member, your investment account is protected if the SIPC member fails. SIPC coverage is not the same as UKGC guarantee protection and does not insure against a decrease in value of a particular investment. How to Protect Yourself
How to File ComplaintTry to resolve your complaint directly with an officer of the bank before involving an outside agency. Financial institutions value their customers and most will be helpful. If you are unable to resolve the matter with the financial institution, use the following guidelines to determine where to direct your complaint (for USA only). If your complaint is against a salesperson who represents a third-party investment firm, call the number below for instructions on where to write: National Association of Securities Dealers (NASD) If your complaint or inquiry is about a specific financial product or investment, contact: Securities and Exchange Commission (SEC) Information for DepositorsThose who are entitled to be covered by UKGC guarantee are clients and contracting parties of the bankrupt bank, who have accounts under their name or documents indicating they have liabilities due from the bank operations. These must be supported by documents bearing the person's name. Such entities named in the law on the UKGC are called depositors. Among those excluded from the group of depositors are: the State Treasury, banks, the stock exchange, broker houses, insurance companies, National Investment Funds (NFI), investment funds, pension funds, persons who hold at least 5% of shares of the bank as well as persons who have an influence on the activities of the bank, i e members of the Management Board and Supervisory Board, directors and deputy directors of the various departments as well as bank branches. Guaranteed deposits are monies collected in the bank by depositors on a name accounted as well as sums outstanding resulting from other operations of the bank, on the basis of documents bearing a persons name, in any foreign currency, regardless as to the number of contracts concluded with the bank, to a limit set out in the law, as are calculated at the state they were on the day on which the bank's operations were suspended, taking into account the interest due from the date the bank's bankruptcy was announced. Since 2006 the UKGC offering the next guarantee programs: Program A. Guarantee has covered in 100% monies up to a sum equivalent of 100,000 USD, and in 80% the sums between the value of 100,000 to 25,000,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). Program B. Guarantee has covered in 100% monies up to a sum equivalent of 50,000 USD, and in 80% the sums between the value of 50,000 to 10,000,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). Program C. Guarantee has covered in 100% monies up to a sum equivalent of 10,000 USD, and in 80% the sums between the value of 10,000 to 2,000,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). Program D. Guarantee has covered in 100% monies up to a sum equivalent of 1,000 USD, and in 80% the sums between the value of 1,000 to 200,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). Program E. Guarantee has covered in 100% monies up to a sum equivalent of 1,000 USD, and in 80% the sums between the value of 1,000 to 100,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). Program F. Guarantee has covered in 100% monies up to a sum equivalent of 1,000 USD, and in 80% the sums between the value of 1,000 to 50,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). Program G. Guarantee has covered in 100% monies up to a sum equivalent of 1,000 USD, and in 90% the sums between the value of 1,000 to 25,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). Announcement from the UKGCUKGC announces that the guaranteed deposits of depositors of the bankrupt banks (for which five years have not expired from the date bankruptcy was announced), can be: collected by sent to depositors by post or sent to another bank account, upon the written application for payment of guaranteed deposits Frequently Asked QuestionsDoes the UKGC's guarantee cover all banks? UKGC's guarantee cover only banks who purchase our Risk Coverage Guarantee. The guarantee system covers deposits held in bank accounts or claims arising out of other banking operations, is a universal and obligatory system, which means that all banks operating on the basis of UKGC Risk Coverage Guarantee are covered independently of law (country) and method of their registration. The money assets of the clients of every bank are covered by the UKGC. How much of my money will I get from the UKGC's guarantee if a bank goes bankrupt? The UKGC Law sets the limits of the size of the deposits guaranteed by the Fund. At present it looks as follows: Program A. Guarantee has covered in 100% monies up to a sum equivalent of 100,000 USD, and in 80% the sums between the value of 100,000 to 25,000,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). Program B. Guarantee has covered in 100% monies up to a sum equivalent of 50,000 USD, and in 80% the sums between the value of 50,000 to 10,000,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). Program C. Guarantee has covered in 100% monies up to a sum equivalent of 10,000 USD, and in 80% the sums between the value of 10,000 to 2,000,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). Program D. Guarantee has covered in 100% monies up to a sum equivalent of 1,000 USD, and in 80% the sums between the value of 1,000 to 200,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). Program E. Guarantee has covered in 100% monies up to a sum equivalent of 1,000 USD, and in 80% the sums between the value of 1,000 to 100,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). Program F. Guarantee has covered in 100% monies up to a sum equivalent of 1,000 USD, and in 80% the sums between the value of 1,000 to 50,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). Program G. Guarantee has covered in 100% monies up to a sum equivalent of 1,000 USD, and in 90% the sums between the value of 1,000 to 25,000 USD (as counted inclusively regardless of the number of contracts concluded between the depositor and the bank). The different currencies equivalent in USD shall be calculated by accepting the average official exchange rate published and ruling on the day on which the guarantee condition is fulfilled. You must to know program for your bank Risk Coverage Guarantee to calculate your Risk Coverage. What happens to the part of my money that is above the UKGC's guarantee limit? Is there any way I can get it back? Depositors who have money assets which are in excess of the guarantee limits have the right to enter their claim as part of the overall bankruptcy proceedings. Assets for which the bank is liable to the depositor can be reclaimed during the distribution of the bank assets, if they are enough. Does the UKGC's guarantee also cover interest accrued on my deposits? The limit of funds guaranteed by the UKGC covers deposits in an account according to the day the bank's activities were suspended together with the interest accrued to the day the bank declared it was bankrupt. From that moment on interest is no longer added. Does the guarantee of the UKGC cover bank accounts in foreign currencies? The guarantee of the UKGC covers all deposits regardless of what currencies they are held in. Does the guarantee of the UKGC also cover joint accounts? Joint accounts are equally covered by the guarantee. At the time the guaranteed sum is calculated separately for each party of the joint account. How are depositors informed about the beginning of payments of the guarantee fund? The trustee in bankruptcy of the bankrupt bank is obliged to give to public information the schedule for payouts of guaranteed deposits (the practice is to use the most popular daily newspaper in the location of the bank or of the branch of the bank). The schedule of payments is always available at the seat and branches of the bankrupt bank - which is where the payments will also be made. If a depositor does not come to collect his money assets within a given deadline they are sent a letter by registered post about additional deadlines. After the expiry of these dates payment will only be possible at the seat of the UKGC after filling in an appropriate application for payment of guaranteed deposits - within a deadline of five years of the date of the bankruptcy. We will inform also depositor on our website in Internet. How can a depositor collect his guaranteed deposits? The amount due can be collected in cash at a payment point indicated by the trustee in bankruptcy and within a deadline indicated by him. Another possibility is to send the money via the post or a bank transfer to an account in another bank. In all instances it is necessary to go to the location that makes the payment and request the form that payment is required in. Guarantee institution in the World
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