Do you have a bank account and want to know how much money you can hold on to it? The answer seems obvious: there is no maximum deposit limit on your current account. However, attention must be paid to a series of thresholds that determine the occurrence of some unpleasant conditions.
Let’s see how much money we can keep in our bank account. The answer seems not to be taken for granted.
How much money can we keep in the bank? let’s see in detail
If you are a small saver you might think of the stamp duty on depositing your money into your checking account as a hefty and unacceptable tax. It is a single tax that is triggered when the average annual balance of money in your account exceeds the threshold of 5 thousand euros. The calculation of the average stock is an average of the presence of the money made on all days of the year. The stamp duty for accounts held in the name of individuals is 34.20 Euros per year, while for accounts held in companies it is 100 Euros per year.
If you do not want to pay the stamp duty, you need to keep an eye on the reporting of your account, because it can be applied quarterly, semi-annually or annually. Remember that it is not enough just to remove the money from the account at the time of reporting: the average stock is calculated by adding the daily balances of the current account, and then dividing them by the number of reporting days.
The risk of depositing large sums of money into the checking account
If you are a really big saver, and you have the possibility to keep sums of more than 100 thousand euros in your bank account, you must know that this is the maximum threshold beyond which your savings will not be protected in the event of a severe financial crisis of your credit institution. Current European regulations require a bank in crisis to implement a procedure called bail-in, which provides the write-down of shares and receivables and their conversion into shares to absorb losses and recapitalize the bank in difficulty..
Among the resources that can be used for the conversion there are also the sums present in the deposits above the threshold of 100 thousand euros. It is also essential that your bank adheres to the Interbank Deposit Protection Fundbecause this fund guarantees coverage of deposits up to 100 thousand euros, in the event of administrative liquidation. In summary keeping more than 100 thousand euros in a single current account is a riskwhich can be avoided by simply holding the money on two different current accounts. If the account is jointly held, they are deemed to be covered 100 thousand euros for each holder.