How to Protect Your Money While Banking Overseas

There is a sentence that does a lot of damage in international banking, and it is this one: "my money is protected up to a hundred thousand." It is usually said by someone who has read the rules of the country they live in, about an account held in a country they do not.

Deposit protection does not follow you. It follows the licence. Which scheme covers your money, up to what amount, and in which currency, is decided by where the institution holding it is authorised — not by your passport, not by your address, and not by which app you opened it in. Get that one relationship right and most of the rest of this article is detail.

The four questions that decide whether you are covered

Before anything else, answer these about the specific account:

1. Which legal entity actually holds the money, and in which country is it authorised?
2. Is that entity a bank, or an electronic money or payment institution?
3. Which scheme covers it, and to what limit?
4. Is the currency you are holding inside that scheme, or outside it?

Most people answer the first two by looking at the app icon. The answer is in the terms, usually in a single line naming the entity and its regulator, and it frequently is not the brand on the icon.

Limits, as published by the schemes themselves

Two things about that table matter more than the numbers.

First, the UK figure moved. FSCS protection was GBP 85 000 from 30 January 2017 until 30 November 2025, and GBP 120 000 applies where the firm failed after that date. If you are reading an older guide, or working from memory, you are working from the previous number. This is exactly why we check the scheme's own page rather than quoting the figure everyone knows.

Second, every one of these is per depositor per institution, and "institution" means the banking licence, not the brand. Two brands sharing one licence share one limit. If you deliberately split money across providers to stay under a limit, you have to check the licence, or you have not split anything.

The currency trap

Deposit protection is not always currency-blind, and this is where holding money abroad quietly diverges from holding it at home.

Australia's Financial Claims Scheme states it plainly: "The FCS does not apply to deposit accounts with funds in foreign currencies." A resident holding AUD is covered. The same person, at the same bank, holding USD in a foreign-currency account, is not.

Other schemes take different positions, and some cover foreign-currency deposits but pay compensation converted into the local currency at a date the scheme chooses — which means the amount you get back is subject to an exchange rate you do not control. If you hold a non-local currency in a foreign account, this is the single question to ask the scheme directly, and it is almost never answered on the bank's marketing pages.

Bank versus e-money: the distinction that catches everyone

The apps people actually use abroad are frequently not banks. They are electronic money institutions or payment institutions, and the difference is not a technicality.

The UK's Financial Services Compensation Scheme states it flatly: "We can't protect the money you have with e-money institutions and payment providers." The Financial Conduct Authority puts the same thing to consumers directly: "If your non-bank payment provider goes out of business, your money won't be protected by the Financial Services Compensation Scheme (FSCS)."

What you get instead is safeguarding. The FCA describes the mechanism: "To safeguard properly, EMIs and APIs must either put your money in a separate safeguarding account with a bank, or protect it with an insurance policy or similar guarantee." Under the EU's electronic money regime the equivalent duty sits in Article 7 of Directive 2009/110/EC, alongside Article 11, which requires issuers to issue electronic money "at par value on the receipt of funds" and to redeem it "at any moment and at par value" on request.

Safeguarding is a real protection and it is not nothing. It is also not the same protection, and the difference shows up at the worst moment. The FCA is candid about the outcome: "if they go out of business, you should get most of your money back. But it may take some time to receive, and it may not be the full amount, as some costs could be taken by the administrator or liquidator of the firm." FSCS makes the same point about timing: "Your money could be tied up for a while during the insolvency process."

Compare that with a covered bank deposit, where the scheme's whole design goal is speed and the full amount. Same balance on screen. Entirely different experience if the entity fails.

We go deeper into the mechanics in who actually holds your money at a neobank.

What to do with this, practically

The part nobody wants to hear

Splitting money across institutions to stay under protection limits is sound, and it is also the point at which people over-engineer. Six accounts in five countries is not six times safer than one well-chosen account. It is six sets of terms, six tax-reporting relationships, six sets of login credentials and six chances to be locked out of something on a Sunday.

The honest counter-argument to this whole article: for most readers, the largest realistic risk is not that a licensed institution fails. Failures are rare and the schemes exist precisely because they are foreseeable. The larger risk is losing access — a frozen account, a lost device, a compliance review that runs for weeks — which no deposit guarantee addresses at all. We wrote the app-only bank outage backup plan for exactly that gap, and it is probably the more useful page for a reader with an ordinary balance.

Protection limits matter most when the balance is large. Access matters every single week.

Regulatory verification, done properly

A scheme only covers institutions that are actually in it, so the register is the thing to check — the regulator's own public register, reached by typing the regulator's address yourself rather than following a link from the institution. Cloned-firm fraud works precisely because a fake site can copy a genuine firm's registration number, and the only defence is starting from the regulator rather than from the firm.

If you cannot find the entity on a register you reached independently, that is the answer. Do not deposit.

General information, not financial or legal advice. Schemes, limits, currency treatment and eligibility vary by country and change; confirm every figure with the relevant scheme and regulator before you rely on it.

Sources

All checked 6 September 2026.

• Directive 2014/49/EU on deposit guarantee schemes, Article 6(1), text as published by legislation.gov.uk: legislation.gov.uk
• Directive 2009/110/EC on electronic money, Articles 7 and 11, text as published by legislation.gov.uk: legislation.gov.uk
• FSCS — banks and building societies cover: fscs.org.uk
• FSCS — e-money and FSCS protection: fscs.org.uk
• FCA — using payment service providers: fca.org.uk
• FDIC — deposit insurance: fdic.gov
• APRA — Financial Claims Scheme, banks, building societies and credit unions: apra.gov.au