Where Your Savings Account Money Goes

Your savings account is not a box with your name on it.

You deposit €1,000.

The bank keeps 1% back at the central bank, here €10.

The rest can fund loans.

Loans pay the bank 4%, for example. You get 2%. The gap pays the bank.

If a bank fails, the EU guarantee covers up to €100,000 per person, per bank.

Did you know where your savings go?

Education, not investment advice.

Read the sheet as text

Title: Where Your Savings Account Money Goes
Highlight: Savings Account
Subtitle: Your bank does not keep your euros in a vault.

Part 1: You Deposit. €1,000 goes into your account.
Part 2: A Little Kept Back. 1% of certain deposits sits at the central bank. Here: €10.
Part 3: The Rest Can Be Lent. To families and firms.
Part 4: The Gap Pays the Bank. Loans pay 4%, you get 2%. The bank keeps 2%.
Part 5: Guarantee. The EU covers up to €100,000 per person, per bank.

Example: For Example. €1,000 → €20 interest a year, at 2%.
Note: Example rates. Yours depend on your bank.

Footer: redstartjournal.com · Education, not investment advice · CC BY-NC-ND 4.0

Sources (4)

What are minimum reserve requirements?European Central Bank, 2016, updated 2023: euro area banks hold 1% of specific liabilities, mainly customer deposits and short-term debt, in accounts at their national central bank. Checked 2026-10-29.
Minimum reservesDeutsche Bundesbank, undated: the ratio has been 1% since 18 January 2012. Press reports in mid-2026 say the ECB may consider 2%; no decision found on 2026-10-29, so the sheet says 1%. Checked 2026-10-29.
Directive 2014/49/EU on deposit guarantee schemesEuropean Parliament and Council, 2014: €100,000 per depositor, per bank. Checked 2026-10-29.
I have savings and other bank accounts: what are my guarantees?FGDR (France's national scheme), undated: €100,000 per customer, per bank, paid within seven working days. Checked 2026-10-29.