NDIF

How much is the compensation?

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NDIF pays compensation on the principal and interest of frozen deposits up to the HUF equivalent of EUR 100 000 (one hundred thousand).

The compensation limit is defined by the law in EUR, and payments are made in HUF.

If compensation is paid, the amount payable to the depositor is calculated by converting the EUR 100 000 to HUF, using the central bank (NBH) exchange rate valid as at the date preceding the compensation start date, and the compensation on the depositor’s deposits is paid up to the HUF amount calculated in this way.

Warning!

The Euro exchange rate shown in the example below represents an assumed amount, and is only used for the purposes of this calculation. For actual payments, NDIF uses the currently valid exchange rate.

Example:

HUF deposits of Tamás Kis:
Savings deposit: HUF 27,980,000
Interest: HUF 820,000
Total: HUF 28,800,000

Central bank (MNB) exchange rate assumed by NDIF: 280 HUF/EUR
Compensation limit in EUR: EUR 100,000
Compensation amount in HUF: EUR 100,000 x HUF 280 = HUF 28,000,000

Of the HUF deposits of Tamás Kis:
Payable by NDIF as compensation: HUF 28,000,000
Not payable by NDIF: HUF 800,000

Let us warn you for two frequent misunderstanding:

  1. Many interpret the insurance limit to be paid by NDIF as the HUF equivalent of EUR 100 000 from the deposit amount and – in addition to that – the contractual interest due on that amount.
  2. Another fallacy is that only the deposit amount, i.e. the principal is protected, whereas the interest due is not.

This is not so!

Pursuant to the law, the limit is the maximum amount that can be paid by NDIF to a bank client. That includes the principal amount paid to a current account, fixed-term deposits, any bank papers purchased, bonds secured, etc. as well as any interest due on these. What NDIF does, then, is to add up all principal and interest receivables of the depositor client – from the insolvent bank –, however, the amount payable is maximised in line with the current limit.

At this point, let us refer again to the fact that sole entrepreneurs are legally distinct from private individuals, i.e. the bank accounts and deposits of a person’s household and sole enterprise are considered as separate deposits – from the aspect of deposit insurance –, and in the event the bank becomes insolvent, NDIF pays compensation separately on the said deposits up to the valid limit, respectively.