Mechanics
Eligible deposits are the deposits that fall within the scope of deposit guarantee scheme protection. The DGSD starts from the wide category of deposits, meaning credit balances arising from funds left in an account or from temporary situations deriving from normal banking transactions, and then carves out certain deposits that are not eligible for repayment, such as those of other credit institutions, financial institutions and public authorities, and deposits connected with money laundering. What remains is the set of eligible deposits.
Eligible versus covered
Eligible deposits are broader than covered deposits. A covered deposit is the portion of an eligible deposit that falls within the coverage level, which the DGSD harmonises at EUR 100,000 per depositor per institution, with temporary high balances protected above that level for a limited period in defined circumstances. A depositor holding EUR 150,000 in an eligible account therefore has a covered deposit of EUR 100,000 and an eligible but uncovered claim of EUR 50,000. The distinction is not merely terminological, because the two tranches rank differently in resolution and insolvency.
Role in the creditor hierarchy
The BRRD gives deposits a preferential position through depositor preference. Covered deposits sit at the very top of the ranking and are, in practice, met by the deposit guarantee scheme, which is subrogated to the depositor's claim. Ranking above ordinary senior creditors but below covered deposits are the eligible deposits of natural persons and micro, small and medium-sized enterprises to the extent they exceed the coverage level. This tiering means that when losses are imposed in resolution, eligible deposits of individuals and SMEs are shielded ahead of ordinary unsecured debt, and covered deposits are excluded from bail-in altogether.
Relevance
For depositors, the eligible-versus-covered distinction determines both how much is repaid quickly by the scheme and how any uninsured remainder is treated if the bank fails. For banks, the volume of covered and eligible deposits feeds the calculation of deposit guarantee scheme contributions and shapes the balance sheet, since deposits enjoy strong protection and are costly to bail in. For resolution authorities, depositor preference and the exclusion of covered deposits are central constraints when assessing whether a bail-in can credibly absorb a failing bank's losses, because a large deposit base narrows the pool of liabilities available to bear loss. The same figures feed the single customer view that lets a scheme repay covered depositors within the statutory deadline.