Australian Government guaranteed deposits
The Australian Government has developed an easy to recognise seal that authorised deposit-taking institutions (ADI’s) can choose to use to help depositors understand that their deposits are protected under the Government’s bank deposit guarantee (also commonly referred to as the Financial Claims Scheme (FCS)).
If you see this seal on letters or brochures relating to your account, you’ll know that your account is covered by the guarantee. This is an example only – you may see it in other colours. Your financial institution does not have to use or display the seal. If it chooses not to display it, that doesn’t mean your account is not guaranteed. If you are not sure whether your account is guaranteed, ask your financial institution.
What is the Financial Claims Scheme?
The Financial Claims Scheme (FCS) is an Australian Government scheme that provides protection and quick access to deposits in banks, building societies and credit unions in the unlikely event that one of these financial institutions fails. Under the FCS, certain deposits are protected up to a limit of $250,000 for each account holder at any bank, building society, credit union or other authorised deposit-taking institution (ADI) that is incorporated in Australia and authorised by the Australian Prudential Regulation Authority (APRA). The FCS can only come into effect if it is activated by the Australian Government when an institution fails. Once activated, the FCS will be administered by the Australian Prudential Regulation Authority (APRA). In an FCS scenario, APRA would aim to pay the majority of customers their protected deposits under the Scheme within seven calendar days.
How is the FCS limit applied?
The FCS limit of $250,000 applies to the sum of an account holder’s deposits under the one banking license. Therefore, all deposits held by an account holder with a single banking institution must be added together towards the $250,000 FCS limit, and this includes accounts with any other banking businesses that the licensed banking institution may operate under a different trading name.
Types of accounts covered under the Financial Claims Scheme
The Financial Claims Scheme (FCS) applies to a wide range of deposit accounts held with banks, building societies and credit unions that are incorporated in Australia, but only applies to deposit accounts with funds in Australian dollars.
The FCS applies to the following accounts:
- savings accounts
- call accounts
- term deposits
- current accounts
- cheque accounts
- debit card accounts
- transactions accounts
- personal basic accounts
- cash management accounts
- pensioner deeming accounts
- mortgage offset accounts (either 100 per cent or partial offset) that are separate deposit accounts
- trustee accounts
Where can I get further information on the FCS?
Information on the FCS is available on the FCS website – www.fcs.gov.au.
