Many EU governments such as France and Italy see a deposit guarantee across Europe as the next logical step to avoid the problems that brought on the euro debt crisis and the financial collapse of 2009.
At talks in Luxembourg, the EU's 28 finance ministers agreed for the first time to an EU roadmap towards a deposit guarantee scheme across Europe.
"Negotiations at the political level will start as soon as sufficient further progress has been made on the measures on risk reduction," said a statement after the talks.
Saving depositors from potential ruin is the third pillar of banking union that was agreed at the height of the crisis.
Once agreed, it would follow tighter supervision of banks and rules on how to handle failed banks.
"Germany has set its conditions," a senior eurozone official told reporters after the talks.
The wording was agreed by the influential German Finance Minister Wolfgang Schaeuble, who insisted that countries must first agree to clean up their heavily indebted banks and obey strict financial rules.
"It is not possible that we accumulate ever greater risks because we don't obey rules and that after they come and ask: now we must share the risk equally," Schaeuble said after the talks.
Despite the strict conditions, the agreement was hailed as an important breakthrough by several EU member states.
"The glass is more half full than half empty," said Finance Minister Pier Carlo Padoan who is currently trying to steer Rome away from a banking crisis.