A demand guarantee is a guarantee that your bank put towards the municipal council of the municipality. If the municipality have had expenditure such as cash benefit to the applicant the municipality will require the expenditure covered by the collateral.

An escrow account is an account in a financial institution in which you inserts the amount in which the municipal council of the municipality has a mortgage in. This means that it is only the municipality who has access to the account. If the municipality have had expenditure such as cash benefit to the applicant the municipality will require the expenditure covered by the amount on the escrow account.

You must provide for the collateral guarantee when the Danish Immigration Service asks for it.

The collateral guarantee must be valid for 10 years from the date on which the applicant is expected to be granted residence permit. The date will be stated in the letter with the request from the Danish Immigration Service. The guarantee must be irrevocable for the entire duration.