RateCity.com.au
Advertisement

What is a deposit guarantee?


RateCity Staff

By RateCity Staff

2 min read

The deposit guarantee was setup by the Australian Government with the aim of ensuring financial stability for the Australian economy during the global financial crisis. The aim of the guarantee is to increase the confidence of individuals investing deposit balances of up to $250,000 per institution into online savings accounts or a term deposit for instance, by protecting their investment. This means that if the financial institution covered by the guarantee runs into trouble, investors will be able to recover their money from the government.

The $250,000 cap

The cap is $250,000 per person, per Authorised Deposit-taking Institutions (ADI). This means that you can have multiple nominations of $250,000 guaranteed as long as each amount is with a different ADI. Anything over $250,000 per ADI won’t be guaranteed.

ADI’s and brands

It’s important to be aware that ADI’s can cover multiple brands. This means that putting $250,000 in three separate branded accounts under one ADI will only cover one lot of $250,000 not the whole $750,000. So make sure you ask your bank which ADI they are with.

In the case of joint accounts, each couple is entitled to an individual $250,000 guarantee.

To get a detailed list of all the banks that are covered under the Australian government deposit guarantee and for more information visit the Australian Prudential Regulation Authority (APRA) website.

To grow your wealth today, compare high interest savings accounts, crunch the numbers using our savings calculator and follow our news articles to get the latest savings tips. For more information visit our detailed savings account guide.

Advertisement

Contact a Broker

A broker will compare hundreds of home loans to help find the right deal for you, at no cost.

By submitting this form, I accept Loan Market's terms and conditions, privacy policy and Collection Statement for this service.

Yes, I'd like to get email updates from RateCity

Submit your details now and a local expert will be in touch within a few business hours. They'll compare hundreds of home loans from up to 20 lenders including the big banks to find the loan that's right for you. Book your free appointment today.

Loan Market Pty LTD | Australian Credit License 390222 ABN 89 105 230 019

Compare your product with the big 4 banks, or add more products to compare
Advertisement