Swiss deposit insurance: What applies if a bank fails

In Switzerland, deposit insurance protects account balances up to CHF 100,000 per customer and bank if a bank fails. Securities in a custody account and fund units follow different rules. According to FINMA, they belong to the customers and do not form part of the bankruptcy estate; instead, they are segregated and handed over. None of these routes protects against price losses. Data as of 27 October 2026.

Three routes of protection at a glance

A different mechanism applies depending on the type of asset. The division into three routes is the editorial team's own classification.

Account balances: Swiss deposit insurance up to CHF 100,000

Money in an account is protected, but only up to CHF 100,000 per customer and bank. The limit does not apply per account. Amounts above it are not protected and can only flow back as a bankruptcy dividend. This is the share that creditors receive pro rata after the bankruptcy estate has been realised.

According to FINMA, protected deposits rank in the second bankruptcy class, ahead of creditors in the third class. The classes determine who is paid first in bankruptcy. All other creditors rank in the third class.

Who funds deposit insurance

Deposit insurance is set out in the Banking Act (BankA). On 31 December 2025, esisuisse had 251 members: 225 banks, 19 securities firms and 7 institutions in the process of winding up their business. Protected balances totalled CHF 506.3 billion.

For the contribution period from 1 July 2026 to 30 June 2027, the banks must contribute at most CHF 8.1 billion. That is 1.6% of protected deposits. At least half of this amount (CHF 4.1 billion) is held with an external custodian (an independent body that safekeeps the assets), in securities or cash. In addition, the banks hold assets in Switzerland amounting to 125% of protected and preferential balances.

Joint accounts

Since 1 January 2023, a community has counted as a depositor in its own right. This includes spouses, simple partnerships, communities of heirs and communities of condominium owners. According to esisuisse, balances held in the name of such a community are protected up to a total of CHF 100,000. The limit therefore applies to the joint account as a whole, not to each person involved individually. The individual accounts of the persons involved are protected separately in addition.

Esisuisse gives two examples. A joint account holding CHF 140,000 is CHF 40,000 above the limit, and these CHF 40,000 rank in the third class. If a married couple had only one joint account, the change reduced the protected amount from CHF 200,000 to CHF 100,000. Any amount above CHF 100,000 cannot be credited to another person.

Pillar 3a and vested benefits

Pillar 3a pension assets and vested benefits are not protected by deposit insurance. Vested benefits are balances in vested benefits accounts, to which pension money is transferred when someone changes jobs. According to esisuisse, however, both have preferential status up to CHF 100,000. This means they rank higher in bankruptcy, in the second rather than the third class. According to FINMA, the bank does not pay them out immediately from liquid funds, and the protection scheme does not cover them. According to esisuisse, preferential balances are generally paid out only during or at the end of the liquidation.

The federal government is considering a change. On 12 August 2026, the Federal Council opened a consultation on the Banking Act, that is, a public hearing on a draft law. It runs until 19 November 2026. According to the FDF, the draft provides for vested benefits and pillar 3a money to be paid out faster, with priority and without a maximum amount. The draft is not yet law.

How quickly is the money paid?

According to FINMA, if the bank has sufficient liquid funds, it pays out protected deposits immediately. If they are not sufficient, the deposit insurance scheme makes advance payments and esisuisse funds the payout. Since 1 January 2023, esisuisse has had seven instead of twenty working days to transfer the necessary funds to the bankruptcy liquidator. The liquidator is the body that handles the bankruptcy. This does not mean that customers have their money after seven days. Esisuisse's target for 2028 is a payout within seven working days of the customer's instruction.

Securities in a custody account are not part of the bankruptcy estate

Shares and fund units in a custody account belong to the customers, not to the bank. According to FINMA, they do not form part of the bankruptcy estate; instead, they are segregated and returned. According to Pestalozzi, the legal basis is Art. 37d of the Banking Act. As the law firm describes it, this happens by operation of law and in full.

Difficulties arise if customer holdings and the bank's own holdings are not kept separate. In that case, according to Pestalozzi, segregation is cumbersome. For this reason, since 1 January 2023, custodians have had to keep their own holdings and customer holdings separate.

How are fund units protected?

With funds, two cases need to be distinguished. In the first, the investor's bank goes bankrupt and the units are held in the investor's custody account. FINMA expressly counts fund units held in custody as custody assets. They are therefore segregated as described above.

In the second case, the fund management company goes bankrupt, that is, the company that runs the fund. Art. 40 of the Financial Institutions Act (FinIA) then applies. The assets and rights of the investment fund are segregated for the benefit of investors, subject to the claims of the fund management company under Art. 38 FinIA. Debts of the fund management company outside the fund contract cannot be set off against claims of the fund. More on this case is in the article on what applies if an ETF or ETP provider goes bankrupt.

How to identify the legal form of a product is shown in the article Reading a factsheet.

Example: A fictitious customer with an account, custody account and funds

Risks and limits

• Price losses: No mechanism covers them. It is the securities that are handed over, not their value. Losses up to a total loss remain possible.
• Balances above the limit: Amounts above CHF 100,000 per customer and bank are not protected. How much flows back as a bankruptcy dividend is uncertain.
• Custody account: According to Pestalozzi, segregation is cumbersome if customer holdings and the bank's own holdings are not kept separate. How long the handover takes is uncertain.
• Pension assets: Pillar 3a and vested benefits have preferential status only up to CHF 100,000. They are not paid out immediately and are not covered by the protection scheme.
• Duration: Preferential balances are generally paid out only during or at the end of the liquidation. The seven-working-day deadline concerns the transfer from esisuisse to the liquidator, not the payout to customers.
• Abroad: According to esisuisse, balances held at foreign branches are not protected, but have preferential status up to CHF 100,000.
• Debt instruments: Products such as certificates are promises to pay by the issuer. Their value depends on the issuer's ability to pay, as the article on Lehman certificates in 2008 shows.
• Status of the rules: Limits and figures apply as of the date stated. The consultation on the Banking Act is under way, and the rules may change. This is a general description. Individual situations may differ; the law, the contractual terms and the bankruptcy proceedings are decisive.

Conclusion

Deposit insurance in Switzerland covers account balances up to CHF 100,000 per customer and bank. According to FINMA, securities in a custody account belong to the customers and are segregated in the bank's bankruptcy; according to Pestalozzi, this is cumbersome where holdings are mixed. If the fund management company fails, the fund assets are kept separate from its other assets, subject to the claims of the fund management company under Art. 38 FinIA. None of the three routes protects against price losses, and pension assets only have preferential status.