Are there any banks with unlimited Deposit Insurance? If so where?

[Mister Sir]

Are there any banks, brokerages, credit unions, financial institution or alike with "unlimited Deposit Insurance"; If so where?

 

[Sols]

An interesting question with no easy answer, because you have what the law says and then you have to think about what reality would be in a disaster scenario.

E-money institutions (EMI) licensed in EU/EEA and UK are required to ring fence their accounts and maintain 100% or higher reserve. This money cannot be touched by creditors if the EMI goes under. This arrangement should be so that even if the bank that the EMI banks with fails, the funds are ring fenced and guaranteed.

These ring fencing arrangements are checked by the regulator and re-checked during audits, inspections, at random, and/or on a recurring basis. AFAIK, every EMI that has failed has been able to repay its customers in full.

I don't think we have yet seen an example of a bank that holds client funds for an EMI failing. Wirecard was technically such a bank but the way they failed was quite unusual. To the best of my recollection, no clients of EMIs that used Wirecard lost money.

Offering those kind of bank accounts for EMIs is very costly, since the money can't be used for anything else and fees need to be low enough that the EMI can afford it. It's usually only major institutional banks or government banks that offer them. Some of the biggest client funds safe keeping institutions are JPMorgan, Barclays, BNP Paribas, and the central bank of Lithuania. They are banks so big that if they were to fail, the government/s would probably step in, and bail them out.