What happens to my money if the bank fails?

The guarantee covers current accounts and savings accounts up to the legal limit. Two details change the arithmetic: the limit is per person, so a joint account between two people is protected for double; and it is per bank, not per account — three accounts at the same bank multiply nothing.

Watch one particular trap: several commercial brands can sit under a single banking licence, and in that case they share one limit. If you have meaningful sums split "across two banks", it is worth checking they really are two banks.

Shares, bonds and fund units held in a securities account do not form part of the bank's assets: they are yours, the bank merely holds them. If it fails, they are transferred to another intermediary and you remain the owner of what you owned.

This is why "spreading investments across several banks for safety" makes little sense: the risk in a securities account isn't that the bank fails, it is that the holdings inside lose value — and changing bank does nothing about that.

First: if the cash at a single bank exceeds the guaranteed limit, splitting it is a free move that removes a real risk. You don't need to reorganise your whole wealth, only the part held in cash.

Second: check that what you buy really is an instrument held in custody and not a product issued by the bank itself. A bond issued by your own bank is a loan to that bank: if it fails, it isn't held in custody — it is lost along with it. That distinction is what separates an inconvenience from a real loss in a banking crisis.