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Qualified Financial Adviser (QFA) Regulations Exam 1 Practice Test

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Jacinta invested €80,000 in a deposit tracker bond in July 2016. What amount, if any, of Jacinta's investment is covered by the Deposit Guarantee Scheme?
Correct Answer:
€80,000
Explanation:
The key idea is what the Deposit Guarantee Scheme covers and up to what limit. In Ireland, the scheme protects deposits up to €100,000 for each depositor per credit institution. A deposit tracker bond is treated as a deposit with the bank rather than a general investment, so it falls under the scheme’s protection. Since €80,000 is within the €100,000 limit, the entire amount is covered. If the amount had exceeded €100,000, only up to the limit would be protected, and any portion above that would not be guaranteed. So, the full €80,000 is covered by the Deposit Guarantee Scheme.

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