| FAQs for Savers |
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1. How do I obtain the guarantee offered by IPAB and what does it cost?
By law, the bank savings protection system that IPAB administers is made available automatically and free of charge to persons who celebrate operations that are considered guaranteed under the terms of the LPAB.
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2. What is protected by IPAB and to what amount?
The coverage for guaranteed obligations protected by IPAB is for up to the equivalent in Mexican currency of 400 thousand investment units (UDIs) per natural or legal person, whatever the number and class of such obligations owed to them by the same bank.
Guaranteed obligations are those mentioned in LIC Article 46, Items I and II. They include credit and loans payable by the bank, but their primary component is represented by bank deposits of money on sight, such as checking accounts, as well as deposits withdrawable on predefined days, in savings and term investments, or on prior notice.
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3. What is not protected by IPAB?
IPAB does not protect investments in investment firms, insurers, savings funds, savings and loan companies, brokerage firms, or development banks, even if such investments are offered or promoted in bank branch offices. Under the LPAB, bank obligations payable to the following persons are excluded from the coverage regime:
- Corporations that form part of the same financial group as the bank.
- Financial entities.
- Shareholders, board members, and officers at the top two levels of the bank’s organization and attorneys-in-fact.
Also, IPAB does not guarantee the following operations:
- Operations that have not observed the applicable legal, regulatory, and administrative provisions.
- Bank obligations that deviate from sound banking practices and methods.
- Liabilities documented in negotiable instruments, as well as bearer instruments.
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4. What financial institutions record operations covered by IPAB?
Obligations negotiated in all full service banks and included among those identified in Article 46, Items I and II, of the Law of Credit Institutions are protected by IPAB.
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Full service banks are joint stock corporations with fixed capital authorized discretionally by the federal government, through the Ministry of Finance and Public Credit, to provide banking and credit services under the terms of the Law of Credit Institutions. Their primary function is to serve as intermediaries in the accumulation and placement of money, in other words to accumulate funds from the public and transform such funds into credit to individuals and businesses. |
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5. What will happen to my deposits/investments that are not protected?
IPAB does not cover their amount, but the holders of such operations maintain their standing as creditors in relation to the bank and may exercise the legal actions available to them to demand their payment.
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6. Does my bank have the obligation to inform me if a product is protected?
Yes. Under the terms of Article 6 of the Bank Savings Protection Act (Spanish acronym LPAB), banks have the obligation to inform their clients of the type and amount of guaranteed operations.
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7. If I maintain deposits below the coverage limit in force in two different full service banks and they merge, bringing the total balance of my deposits over the coverage limit in force, will the total of my deposits be protected?
No. When two banks merge, insured deposits (also known as guaranteed obligations) are protected for up to the coverage limit of 400 thousand UDIs. The combined balance of two accounts that exceed the coverage limit will not be guaranteed.
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8. Does the death of any co-account holder affect deposit coverage for joint accounts?
No. In case of death of one of the co-holders of a joint account, IPAB will divide the amount corresponding to the deceased co-account holder among the beneficiaries and will pay such obligations observing the limits established in Article 56 of the Law on Credit Institutions.
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9. How is payment of guaranteed obligations made in accounts with more than one beneficiary?
The balance will be divided based on the specific percentages corresponding to each of the co-beneficiaries named in the contract. If such percentages are not established, it will be divided in equal parts among the existing co-beneficiaries. |
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10. How will the amount I will receive from IPAB be calculated?
The amount (principal of guaranteed obligations plus interest minus taxes, when applicable) will be converted to Investment Units (Spanish acronym UDIs) on the day IPAB publishes the resolution regarding the bank’s liquidation or failure. Payment of guaranteed obligations will be made in pesos. The UDI value quoted on the payment date will be used to make the conversion from UDIs to Mexican pesos.
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11. Does IPAB protect deposits in foreign currency?
Yes. To determine the UDI value of accounts denominated in United States dollars, the peso equivalency will be calculated based on the exchange rate published by the Central Bank in the Official Gazette of the Federation for the banking day before the day IPAB publishes the resolution regarding the bank’s closing.
Equivalencies in other currencies will be calculated by the Central Bank at IPAB’s request, using the U.S. dollar exchange rate in force in international markets on the day IPAB publishes the resolution regarding the bank’s closing. |
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12. Does IPAB protect deposits of persons that are not residents in Mexico?
Yes. The depositor’s place of residency does not affect the insurance offered by IPAB. Deposits pertaining to savers who reside outside Mexico receive the same protection provided for by law in terms of coverage, by person and by bank, in all banks covered by IPAB.
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13. Does IPAB insure corporate and personal accounts jointly or separately?
Deposits protected in corporate accounts are insured separately and independently from deposits protected in accounts under the name of the company’s owner, provided the business or company is a separate legal entity.
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