The 25 Top Safest Banks in the World in 2024

Q: Which is the safest bank in the world?

The safest bank in the world, according to rankings by Global Finance magazine, is KfW (Kreditanstalt für Wiederaufbau), a German government-owned development bank. KfW has topped the list due to its exceptional credit ratings (AAA) from major rating agencies like Moody’s, S&P, and Fitch, backed by the full faith and credit of the German government. Other highly ranked safe banks include institutions like Zurich Cantonal Bank (Switzerland), Landwirtschaftliche Rentenbank (Germany), and L-Bank (Germany), all of which are known for their strong financial health, low-risk profiles and solid credit ratings.

Explore a comprehensive list of the safest banks in the world ranked by their credit ratings and secure banking practices in 2024.

In an unpredictable financial landscape, the importance of bank safety has never been more crucial. As financial crises have reshaped the global banking system, identifying the safest banks in the world has become a priority for individuals and businesses.

While Europe is known as the home to some of the most trusted banking institutions known for their stability and secure banking practices, safe and reliable banks can also be found across other regions. The search for the safest banks spans continents, with institutions in the Middle East, North America, and beyond also earning reputations for their financial stability and security.

This article will provide insights into the safest banks in the world. We will also offer guidance on finding the best international banks for your needs and highlight the key factors that contribute to a bank’s safety.

How do you determine the safest banks in the world?

Whether dealing with an online or a traditional bank, ensuring the safety of your finances is crucial. When evaluating a bank’s safety, especially in the context of offshore banking, it’s essential to understand how it measures up within the broader banking system, how it protects against unauthorized transactions, and how the financial institution will survive in a case of bank failure, especially after witnessing the unpredictability of an economic crisis.

Here are a few factors that highlight what makes a bank secure and how it compares to other banks in the world:

Financial stability

A safe bank starts with a financial institution that is financially stable, with a strong balance sheet and plenty of liquidity. This means it can weather any financial crisis and still be there for its customers.

The financial instability of a bank is often revealed during tough times, such as an economic crisis. The 2007 to 2008 financial crisis demonstrated how irresponsibly a number of large national banks had operated with their client’s savings, inevitably requiring saving from bankruptcy by the same taxpayers they held money for.

Regulation and supervision

Financial institutions are subject to strict regulations and supervision by financial authorities, such as the European Central Bank (ECB) in Europe, the Financial Conduct Authority (FCA) in the United Kingdom, or the Federal Reserve in the United States. They ensure that banks run in a sound and judicious manner and that customers’ bank accounts are protected.

Deposit guarantee schemes

Deposit guarantee schemes provide a safety net for bank depositors by insuring their deposits up to a certain limit. In the European Union, all banks are covered by this scheme, which guarantees that account holders will be reimbursed up to €100,000 ($106,000) per person in the event of a bank’s insolvency or inability to release funds.

Globally, similar deposit insurance schemes exist to protect depositors, though the coverage limits and regulations can vary by country. These schemes help maintain financial stability and protect individuals’ savings across different financial systems. When researching the most secure banks for opening an account, it’s essential to consider the extent of deposit insurance and the bank’s overall stability.

Credit Ratings

When looking for one of the safest banks in the world, credit rankings are one of the critical factors. Credit ratings are expressed on a letter-based scale, where higher ratings indicate lower risk and greater creditworthiness. Therefore, AAA or AA indicates strong banking security, meaning the bank is financially sound and less likely to default, which reassures investors and customers. This is the full rating scale:

AAA: The highest rating means extremely safe, with a very low risk of default.
AA, A: High credit quality but slightly more risk than AAA.
BBB: Medium credit quality; considered “investment grade.”
BB, B: Higher risk, known as “speculative” or “junk” bonds.
CCC, CC, C: Very high risk of default.
D: In default.

You can check if a bank has high credit ratings by evaluating its assessments with well-respected agencies such as Moody’s, S&P Global, and Fitch that measure its ability to repay its debts, reflecting its financial health and stability.

A bank with high credit ratings can offer more reliable banking services, attract more deposits, and borrow at lower interest rates, contributing to its overall safety and stability in the financial system.

Financial institutions with high credit ratings also make it easy to open a money market account, which combines a savings account with the flexibility of a checking account. It offers high interest rates while providing easy access to funds.

Therefore, choosing a money market account with one of these banks ensures that your funds earn competitive interest rates and are protected by the bank’s stability and sound financial health.

Asset Quality

If your primary concern is bank failure, look into the bank’s asset quality, which reflects the health of a bank’s loan portfolio. A lower percentage of non-performing loans (NPLs) indicates better asset quality, reducing the risk of significant losses. A bank’s stability and safety are also based on carefully assessing borrower creditworthiness and diversifying their loan portfolios to mitigate risk.

Capital Adequacy

The bank’s capital adequacy ratio (CAR) measures its capital in relation to its risk-weighted assets. A higher CAR indicates that the bank has enough capital to absorb potential losses and is more resilient during financial downturns. Regulatory bodies like the Basel Committee on Banking Supervision set minimum CAR requirements to ensure stability.

Liquidity Management

A safe bank maintains sufficient liquidity to meet short-term obligations and customer withdrawals. High liquidity ratios mean the bank can quickly convert assets to cash without significant losses, providing a cushion during periods of financial stress.

Risk Management Practices

Finding the right international banks also means taking a good look at their risk management practices. Effective risk management includes strong governance and internal controls, as well as identifying, measuring, and managing risks. These include credit risk, market risk, operational risk, and interest rate risk. A safe bank has solid frameworks and policies to manage these risks and ensure they have a banking system they can fall back on in case of setbacks.

Government Support

When looking at one of the largest banks, some financial institutions are considered “too big to fail” and may receive government backing or support during financial crises. This implicit or explicit support can enhance their perceived safety.

The Safest Banks in the World

The world is your oyster, and choosing where to live and bank is a critical decision. Wherever you might be considering, finding the safest bank for your deposit accounts, including savings accounts and checking accounts, is essential to protecting your wealth.

Global financial stability is more crucial than ever, especially in the wake of recent financial crises and bank failures. High-net-worth individuals, in particular, need to ensure their assets are protected by selecting the safest banks in the world, especially those offering high-yield savings accounts and other secure banking options.

Europe remains a stronghold for financial security, with many of the world’s safest banks headquartered there. However, diversifying your banking portfolio and building banking relationships is helpful when mitigating risk.

So, it is important to learn more about the different reputable banks around the world, as banking safety is not limited to Europe. Numerous top-ranking banks around the globe also stand out for their financial stability, great credit ratings, and secure banking practices, especially for those looking into offshore banking.

Here is a list of some of the safest banks across the globe: