The privilege under bankruptcy law is linked to the legally preferential treatment of creditors' claims (credit balances) in the context of bankruptcy proceedings at a bank, for example in the event of insolvency. This increases the chances of a full repayment of the claim, but the client will not be reimbursed within a short period of time. The purpose of deposit protection, on the other hand, is to quickly reimburse a limited balance (covered deposit) to the affected client (liquidity bridge).
Deposits with banks of up to a maximum of CHF 100,000 per client are covered by deposit protection and repayed in a payout event. If EAS reimburses depositors in the context of a payout event, it subrogates into the rights of these depositors against the member institution concerned for an amount equal to the payments made by the protection scheme to the depositors. In bankruptcy proceedings, these claims of the EAS rank at the same level as covered deposits.
Covered deposits with banks are treated preferentially up to a maximum of CHF 100,000.00 per client and bank within bankruptcy proceedings. The preferential treatment results in the classification of these preferential deposits as second-class claims and represents an advantage for the client (creditor of the bank) when the bankruptcy estate is distributed.
Furthermore, eligible deposits of individuals, small and medium-sized companies (SMEs) over CHF 100,000.00 are treated preferentially as well and classified as third-class claims. The same applies to deposits that would be considered eligible and held at branches in third countries. Additionally, vested benefits as part of pension schemes kept with a bank (vested benefits accounts) up to CHF 100,000.00 are also classified as third-class claims, regardless of the other deposits held by the individual client at the bank.