Australian Government Deposit Guarantee Guide
DEPOSIT GUARANTEE REDUCED TO $250,00011 September 2011 The Australian Government has announced it is reducing its guarantee on bank deposits to $250,000, effective from 1st February 2012. This permanent deposit guarantee scheme replaces the emergency scheme which covered deposits up to $1 million and was introduced in 2008 at the height of the global financial crisis. The initial emergency scheme was designed to prevent any panic runs on Australian banks during the financial crisis by providing reassurance to depositors that their money was safe. The expiry date for the existing cap was next month. Credit unions, building societies and banks now have four months to prepare customers for the lower cap and adapt their own funding plans if necessary. According to Treasurer Wayne Swan, even at the new cap, the scheme would still protect the savings held in 99% of deposit account numbers in Australian-licensed banks, building societies and credit unions. It will ensure that we continue to have one of the most generous and secure deposit insurance schemes in the world, Mr Swan said. The new Australian cap is less than the equivalent of a $288,000 deposit scheme in the US, but is more than double programs in Canada and Japan. Britain protects the equivalent of $167,000 in savings. The new lower cap was based on advice from the Council of Financial Regulators, a committee that includes the governor of the Reserve Bank, the Treasury secretary and the Australian Prudential Regulation Authority chairman. The changes also provide longer protection for existing term deposits, which will be protected at the $1 million level until December 31, 2012 or until maturity, whichever comes first. The new scheme will not apply to deposits sitting in branches of Australian banks overseas. However, it will apply to deposits held here of foreign banks which hold an Australian-based banking licence. The recommendation comes after Mr Swan last year made the guarantee permanent as part of the government's attempt to intensify banking competition. For up to date information about the scheme go to Government Deposit Guarantee site. Savings Accounts ... |
Australia | New Zealand
