The Australian Government guarantees deposits, up to $250,000 per bank per account holder. Any institution registered as an Authorised Deposit-taking Institution (ADI) - also known as banks and credit unions - are covered. The government does this to reassure consumers that if something happens to their bank or credit union, their deposits will be repaid to them by the government.

The government guarantee on deposits gives people confidence to deposit cash into smaller institutions in particular. It was introduced by the Rudd Government at the onset of the Global Financial Crisis and for a period it was $1 million, but in 2012 with most concerns around the GFC over it was changed to $250,000.

But there are some details that you need to keep in mind.

What is the government's deposit guarantee?

The Australian government's guarantee on deposits in the banking system is called the Financial Claims Scheme (FCS). It protects the deposits in Australian banks and credit unions if the institution fails or is unable to pay its debts or honour withdrawal requests from account holders.

In the unlikely event that a bank or credit union 'fails' of is unable to fund withdrawals, the government has accepted liability to repay all depositors, up to $250,000 each. This covers each deposit you have with each bank, but keep in mind some banks share banking licences, which we'll get into later. The guarantee is also available for each account holder.

How much is the government deposit guarantee?

The government's deposit guarantee, called the Financial Claims Scheme, covers the first $250,000 of deposits held by an account holder in one ADI. Any money over that amount is not covered.

People with more than $250,000 to deposit should consider splitting their money into more than one deposit and sharing it around different institutions in order to ensure that it is completely covered.

What is the big catch with the FCS?

One big catch with the FCS is that it is limited to $250,000 per institution. So if you have more than $250,000 to deposit, you need to split the money and put it in more than one institution to be covered.

But, did you know that many of Australia's banks and lenders are merely brand names of other Australian banks? And the government doesn't care about branding, just who is really behind the bank.

The Australian Prudential Regulatory Authority warns:

"When determining whether the total value of all your accounts with an ADI is below the $250,000.00 limit, it's important to include any accounts that you hold which have been marketed by the ADI under a different name."

For example, RAMS, St George Bank, Bank of Melbourne and BankSA are all owned by Westpac, so all of these brands are just one ADI - the Westpac Group. A more comprehensive breakdown is below.

How the government deposit guarantee scheme works

Case study: Mavis has $300,000 in term deposits and savings accounts. She wants all her money to be covered by the scheme so she withdraws more than $50,000 and deposits that in another bank.

Now Mavis has less than $250,000 in two separate institutions so her whole $300,000 is covered by the FCS.

Banks and credit unions covered under the $250,000 guarantee

The good news is all institutions registered as an Authorised Deposit-taking Institution (ADI) are covered. If you have a deposit with a company purporting to be a bank and it is not an ADI, you will not be covered; it is illegal to market as a bank and not actually have an ADI. 

Covered institutions, as well as their subsidiaries, include:

  • Alex Bank Pty Limited
  • AMP Bank Ltd
  • Arab Bank Australia Limited
  • Australia and New Zealand Banking Group Limited (ANZ)
  • Australian Military Bank Ltd
    • RSL Money
  • Australian Mutual Bank Limited
    • Endeavour Mutual Bank and Sydney Mutual Bank
  • Australian Settlements Limited (provides industry services)
  • Australian Unity Bank Limited
  • Auswide Bank Ltd
    • Queensland Professional Credit Union Ltd
  • Avenue Bank Limited*
  • Bank Australia Limited
  • Bank of China (Australia) Limited
  • Bank First
  • Bank of Queensland Limited
    • BOQ Specialist (BOQS)
    • ME Bank
    • Virgin Money
  • Bank of Sydney Ltd
  • Bank of Us
  • Bendigo and Adelaide Bank Limited
    • Adelaide Bank
    • Alliance Bank
    • AWA Alliance Bank
    • BDCU Alliance Bank
    • Bendigo Bank
    • Circle Alliance Bank
    • Community Sector Banking
    • Delphi Bank
    • Nova Alliance Bank
    • Rural Bank
    • Service One Alliance Bank
    • Up Bank
    • Tiimely Home
  • Beyond Bank Australia
    • Nexus Mutual
  • BNK Banking Corporation Limited
    • Goldfields Money
  • Cairns Bank
  • Central Murray Credit Union Limited
  • Central West Credit Union Limited
  • Challenger Bank Limited
  • Coastline Credit Union Limited
  • Commonwealth Bank of Australia
    • Bankwest
  • Community First Credit Union Limited
    • Community First Bank
    • Easy Street Financial Services
  • Credit Union SA Ltd
  • Cuscal Limited (provides industry services)
  • Defence Bank Limited
  • Dnister Ukrainian Credit Co-operative Limited
  • Family First Credit Union Limited
    • Family First Bank
  • Fire Service Credit Union Limited
  • First Choice Credit Union Ltd
  • First Option Bank Ltd
  • Geelong Bank
  • G&C Mutual Bank Limited
  • Gateway Bank Ltd
  • Great Southern Bank (formerly CUA)
  • Goulburn Murray Credit Union Co-operative Limited
  • Horizon Bank
  • HSBC Bank Australia Limited
  • Hume Bank Limited
  • IMB Bank
    • The Shire
  • Illawarra Credit Union Limited
  • in1bank Ltd
  • Indue Ltd
  • ING Bank (Australia)
  • Judo Bank Pty Ltd
  • Laboratories Credit Union Limited
  • Lithuanian Co-operative Credit Society "Talka" Limited
  • Lutheran Laypeople's League of Australia
  • MacArthur Credit Union Ltd (trading as The MAC)
  • Macquarie Bank Limited
  • Macquarie Credit Union Limited
  • Maitland Mutual Limited (trading as The Mutual Bank)
  • Members Banking Group Limited (trading as RACQ Bank)
  • MOVE Bank
  • MyState Bank Limited
  • National Australia Bank Limited
    • Ubank
    • Citi
  • Newcastle Greater Mutual Group Ltd
    • Newcastle Permanent
    • Greater Bank
  • Northern Inland Credit Union Limited
  • Orange Credit Union Limited
  • P&N Bank
    • BCU
  • People First Bank
    • Heritage Bank
    • People’s Choice Credit Union
  • Police Bank Ltd (trading as Border Bank and Bank of Heritage Isle)
  • Police Credit Union Limited
  • Pulse Credit Union Limited
  • QPCU Limited (trading as QBANK)
  • Qudos Mutual Ltd (trading as Qudos Bank)
  • Queensland Country Bank Limited
  • Rabobank Australia Limited
  • Regional Australia Bank Ltd
  • South West Slopes Credit Union Ltd
  • Southern Cross Credit Union Ltd
  • Summerland Credit Union
  • Suncorp-Metway Limited
  • Teachers Mutual Bank Limited including subsidiaries:
    • Firefighters Mutual Bank, Health Professionals Bank, Hiver Bank and UniBank
  • The Broken Hill Community Credit Union Ltd
  • The Capricornian Ltd
  • Traditional Credit Union Limited
  • Transport Mutual Credit Union Limited
  • Tyro Payments Limited
  • Unity Bank Limited (trading as Reliance Bank, Bankstown City Unity Bank and Unity Bank)
  • Warwick Credit Union Ltd
    • Dalby Credit Union 
    • Gympie Credit Union
  • WAW Credit Union Co-Operative Limited
    • BankWAW 
  • Westpac Banking Corporation
    • Bank of Melbourne
    • BankSA
    • St George Bank
  • Woolworths Team Bank Limited

Photo by Joshua Hoehne on Unsplash