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The Scheme is designed to protect “eligible depositors” in the event that a Jersey bank fails, promoting financial stability and serving as a safety net for essential savings. The key features of the Scheme are:
The Scheme protects money held by individuals (natural persons) and Jersey registered charities in an account or accounts with Jersey banks. This generally includes money held in Jersey bank accounts by:
Depositors are protected up to a maximum of £50,000 per eligible depositor per Jersey banking group.
If you have joint accounts, the above limit will apply for each individual (as set out in the FAQ below).
If you have accounts in your name but for the benefit of a child, the child will count as a depositor, and the above limit will apply to them in respect of any accounts for their benefit.
Compensation available from the Scheme is not guaranteed. The ability of the Scheme to pay compensation relies on it having adequate funding to do so.
The Scheme is funded from a combination of a loan from the States of Jersey, levies received from Jersey Banks, and recoveries from the liquidation of the failed bank.
If there is insufficient funding available to the Scheme, the level of compensation paid by the Scheme will be reduced. In such circumstances, the JRDCA will make further payments of compensation (up to the maximum limit) as and when more funding becomes available to the Scheme (for example proceeds from the liquidation of the failed bank).
The Scheme covers all banks that are registered to operate in Jersey under the Banking Business (Jersey) Law 1991.
A list of banks covered by the Scheme is available below (jrdca.org.je/jdcs)
When calculating an individual’s deposit value, the balance of joint accounts are divided equally among the account holders. For example, if two people share a joint account with a balance of £20,000, each person is considered to have £10,000.
The compensation limit is up to £50,000 per person, covering the total amounts held across all accounts with a single Jersey banking group. This applies regardless of the number of accounts, whether held individually or jointly, and even if the accounts are under different brands of the same banking group.
The following example illustrates this further:
The joint account would be split equally between Individual 1 and 2 resulting in them each being allocated £35,000.
No, the £50,000 Limit is per person, per banking group, not per account. All your eligible deposits across different accounts within the same Jersey banking group would be added together, and the £50,000 limit would apply to the total.
No, the Scheme does not provide additional compensation in relation to temporarily high balances. The maximum compensation limit is set by law and is £50,000 per eligible depositor, per banking group.
Company Accounts:
Company accounts are not covered by the Scheme. However, if the company is registered as a charity in Jersey by the Jersey Charities Commission, it is eligible for compensation from the Scheme.
Trust Accounts: Deposits with banks in respect of trusts are not covered by the Scheme. However, if the trust is registered as a charity in Jersey by the Jersey Charities Commission, it is eligible for compensation from the Scheme.
Sole Trader/Partnerships:
A sole trader depositing money as an individual but under a trading name is eligible for compensation from the Scheme (for example J. Bloggs re ‘Painting Excellence’). However, the balance on the sole trader’s account would be combined with the balance of any accounts in their personal capacity when determining how much compensation is due from the Scheme.
Deposits held by a partner in connection with a partnership, or deposits held directly by a partnership, are not covered by the Scheme. However, if the partnership is registered as a charity in Jersey by the Jersey Charities Commission, it is eligible for compensation under the Scheme.
This type of account is covered under the Scheme. Under the law, when you hold an account (or accounts) for the benefit of your child (or a child for whom you have parental responsibility), you are treated as an "eligible depositor" in respect of that account (or accounts) in a separate capacity from your own personal accounts.
For example:
You have £40,000 in a personal savings account.
You also have a separate account in your name on behalf of your child with a balance of £25,000.
Both accounts are with the same Jersey bank.
If this bank failed, you would be entitled to compensation of £40,000 for your personal account and separate compensation of £25,000 for the account held on behalf of your child.
Compensation is only payable if the account holder is an "eligible depositor". Deposits held via trusts and self-invested personal pensions are not covered by the Scheme. Therefore, even if you are the ultimate beneficiary, if the account is held in the name of a professional trustee, a pension provider or a SIPP company, it is not covered by the Scheme.
No. The Scheme does not protect investment or insurance products. In this case, the legal owner of the deposit with the bank is the investment/insurance company, not you. Since investment and insurance companies are not eligible depositors, the deposit is not covered by the Scheme.
Additionally, investments held on your behalf by your bank are not covered by the Scheme. However, these should be held separately from the bank’s own assets under Jersey’s Client Asset rules. In such a scenario you should contact the bank, or the liquidator of the bank, to arrange the transfer of your investments to a new firm.
Yes. Your residency does not affect your eligibility for compensation. As long as your deposit is with a Jersey bank that is covered by the Scheme and in an account in Jersey, you are eligible under the Scheme.
No. The Scheme only covers deposits placed with banks registered in Jersey and where the bank accounts are in Jersey. If your account is with a Jersey registered bank in one of its overseas branches (e.g., UK, Guernsey, Isle of Man) or your bank is in another jurisdiction, it may be covered by another compensation scheme in that jurisdiction.
Setting a limit is a standard feature of depositor protection schemes around the world. It allows the Scheme to provide a safety net for a significant proportion of individual depositors, whilst ensuring the Scheme remains affordable.
A depositor who has more than £50,000 with a failed bank is entitled to receive compensation from the Scheme only up to the limit (i.e. £50,000).
However, depositors with deposits above the limit may also receive a recovery in respect of any higher balance from the liquidation of the failed bank. Depositors would have to wait until the liquidator had completed the liquidation to find out how much, if anything, they might receive in addition to the compensation paid by the Scheme.
In certain circumstances, to counteract prejudice caused by the application of foreign law, the JRDCA may transfer the rights of depositors above the £50,000 compensation limit (known as Excess Rights) to the Scheme. In such a scenario, the JRDCA would liaise with the liquidator of the failed bank to obtain recoveries of the full amount of your deposit and, subject to having paid all depositor compensation due to you and other eligible depositors, would repay any excess amount to you.
Excess Rights are the rights of eligible depositors to deposits in a failed bank in excess of the £50,000 maximum compensation limit available from the Scheme. For example, if you hold multiple accounts with a failed bank with total deposit value of £75,000 your Excess Rights would equal £25,000 (£75,000 less the £50,000 limit of compensation).
In certain circumstances, to counteract prejudice caused by the application of foreign law, the JRDCA may transfer the rights of depositors above the £50,000 compensation limit (known as Excess Rights) to the Scheme. In such a scenario, the JRDCA would liaise with the liquidator of the failed bank to obtain recoveries of the full amount of your deposit and, subject to having paid all depositor compensation due to you and other eligible depositors, the JRDCA would then repay any excess amount to you.
If your account is in a currency other than pounds sterling, the balance will be converted into sterling using an exchange rate from the date the bank failed. The sterling balance would be used to determine the level of compensation due to you. Compensation will always be paid in pounds sterling.
You are entitled to compensation from the Scheme in relation to dormant accounts.
However, we may require you to apply for compensation and / or provide us with further information, to ensure we can verify your identity and reconcile that to the bank’s data, before we can process any compensation.
Community Savings Ltd (“CSL”) is a Jersey registered charity. Its members’ money is deposited by CSL with banks in Jersey. Should one of those banks fail, the Scheme will provide compensation directly to CSL in respect of the balance on each of its members’ accounts, up to the limit of £50,000 for each member.
The Scheme does not provide cover in the event of separate failure of Community Savings Ltd.
Only charities registered with the Jersey Charity Commissioner under the Charities (Jersey) Law 2014 are eligible for compensation from the Scheme.
The Scheme provides protection exclusively for eligible deposits held with registered Jersey banks in a bank account in Jersey.
Most e-money and payment app providers are regulated in other jurisdictions and / or are not licensed as banks in Jersey. Therefore, any funds you hold with them are not protected by the Scheme.
You should check directly with your service provider to understand how your money is held and what protections may be in place.
The Scheme is designed to allow pay out without the need for you to apply for compensation.
However, in some circumstances we may need additional information to ensure we can verify your identity or to allow us to properly process your compensation. We will usually contact you and ask you to provide additional information.
Compensation will be sent by cheque through the post. The cheque will go to the address you have on file with the failed bank. It is important to keep your bank updated with your current mailing address, even if you usually receive communications by email.
The Scheme aims to issue cheques within 7 working days after receiving the necessary information from the failed bank. Although the Scheme is triggered on the day the bank fails, the 7-day payment period starts once the bank provides the required customer data. For example, if it takes 2 days for the bank to send this information, the Scheme may not issue cheques until 9 working days after the bank fails.
Additionally, we may not be capable of paying all depositors straight away, for example, due to problems with the failed bank’s records. In such cases it will take longer for us to process your compensation.
Your compensation entitlement is separate from any loan(s) you owe the bank. When calculating the amount of compensation due, no account is taken of any set-off or counterclaim the bank may have against you. You will be entitled to receive compensation up to the limit of £50,000.
However, your loan(s) will remain payable to the failed bank. Repayment or transfer of any loan(s) will be dealt with separately by the failed bank's liquidator.
The Scheme is administered by the Jersey Resolution and Depositors Compensation Authority, an independent body responsible for managing bank failures and depositor compensation in Jersey.
If a bank fails, the Scheme will be funded through a combination of a loan from the States of Jersey, levies on other Jersey banks, and any money recovered from the failed bank.
It is possible that the funding available may not be sufficient to cover the total compensation in full resulting in a reduction to compensation paid, as set out below.
Post-funding is considered the most appropriate way of meeting the funding needs of Scheme, ensuring the costs of a bank failure are met by the banking industry at the time of the event, not before. Although there are advantages and drawbacks to both models, a pre-funded Scheme would not be appropriate or proportionate in Jersey. The funding of the Scheme is supported by the ability for the States of Jersey to provide a loan, ensuring that the absence of pre-funding does not delay the payment of compensation.
If there is insufficient funding available to the Scheme, the level of compensation paid by the Scheme will be reduced proportionately across all eligible depositors.
In this scenario the JRDCA would work with the liquidator of the failed bank to seek recoveries from the liquidation. Any money recovered would be used to make further compensation payments, until either the full compensation has been paid or there are no remaining assets available to the Scheme.
There is no limit to the total amount that the Scheme can pay out for a single bank failure.
However, there may be circumstances where the total compensation exceeds the funding available to the Scheme (see above).
As part of administering the Scheme, the JRDCA will work with the liquidator of the failed bank to seek to obtain recoveries from the liquidation. These recoveries would be used to either: