How are
deposits at Australian credit unions, building societies and banks protected?Australia
has one of the strongest banking systems in the world. You can have confidence
that all Australian banking institutions – credit unions, banks and building
societies –must meet the toughest regulatory standards and protections,
designed to protect you.
What is
the Financial Claims Scheme (the deposit guarantee)?
All banks, building societies and credit unions
in Australia meet exceptional high standards and rules set by the Australian
Prudential Regulation Authority (APRA). APRA also administers the Financial
Claims Scheme, which is an additional protection for deposits.
The Financial Claims Scheme ensures that
depositors with credit unions, banks, and building societies will be guaranteed
repayment of their funds in the extremely unlikely event that any banking
institution faces stress. The Scheme includes a guarantee of $250,000 per
person per institution. Existing deposits in place at 10th September
2011 have a continuing $1 million guarantee until December 2012.
Why has the Financial Claims Scheme cap
changed?
The initial $1 million cap for the Financial
Claims Scheme was an emergency response to the global financial crisis. It was
introduced in 2008 for three years.
Australia has the strongest banking sector in
the world and the Government has decided this emergency response is no longer
required, given our system’s clear strength.
The new cap brings Australia into line with
similar guarantee schemes overseas.
How does
this affect my deposits?
The Scheme applies in exactly the same way to
all credit unions, building societies and banks. From 1 February 2012, deposits
will benefit from the $250,000 guarantee.
There are transitional arrangements in place for
all term deposits made prior to 10th September, and new deposits
between 10th September and 1 February 2012.
My deposit with an Australian credit union, bank or building
society |
What Financial Claims Scheme cap applies? |
Deposits maturing before February 2012 (including all new deposits made after 10th September 2011 with
this maturity). |
$1M guarantee until maturity. If the
deposit is rolled over, the $1M cap applies until 1 February 2012. The
$250,000 cap then applies. |
Deposits (in place on 10/11/2011) maturing between 1 February & 31 December 2012. |
$1M guarantee applies until maturity. If
the deposit rolled over, the $250,000 cap will apply from the roll-over date. |
Deposits (in place 10/11/2011) that
mature after 31 December 2012. |
$1M guarantee applies until 31 December
2012. The $250,000 cap then applies. |
All new deposits made on or after 1
February 2012. |
The $250,000 guarantee applies. |
Strict
Australian regulation protects your deposits with mutuals
Credit unions, building societies and mutual
banks meet the same strict standards as banks, under the Banking Act with
strict oversight by APRA. APRA’s rules on safety and capital apply to all
banks, building societies and credit unions to the same high standards.
As mutuals, we are owned by our members. Our
focus is on your interests, and we are conservative and careful managers of our
members’ money.
Credit unions and mutual building societies have
the highest level of capital in the banking system providing exceptional stability.
Collectively, mutuals have combined assets over $80 billion, and over 4.5
million Australians as members.
To find out more about
mutual banking, visit the Abacus website at www.abacus.org.au
To find out more about
Government guarantees, visit APRA’s website at www.apra.gov.au
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