How the Government guarantee on bank deposits works

The Financial Claims Scheme, widely known as the Government guarantee on deposits, protects money held with Australian banks, building societies and credit unions if one of them fails. It covers up to $250,000 per account holder at each institution, the level that has applied since 1 February 2012. For larger cash balances, it helps to know exactly how that limit is counted.

The scheme covers up to $250,000 per account holder at each institution

The scheme was set up during the 2008 global financial crisis. For deposits, it applies to authorised deposit-taking institutions, or ADIs: the banks, building societies and credit unions incorporated in Australia and authorised by the Australian Prudential Regulation Authority (APRA), the regulator that supervises them. If one of these institutions fails, the Australian Government can activate the scheme, and APRA then runs it.

An account holder can be a person, a company, a trust or a self-managed super fund (SMSF), and each has its own $250,000 limit at each ADI. The limit applies to the combined total that holder keeps with the institution. Interest earned up to the time the scheme is activated is included, less any bank fees and tax that apply.

The guarantee applies to deposit accounts held in Australian dollars

The guarantee covers a wide range of accounts, including transaction, savings, call and cheque accounts, term deposits, cash management accounts and mortgage offset accounts that are separate deposit accounts. The money must be held in Australian dollars. Several things fall outside it.

• Investments. Shares, bonds, managed funds and hybrid securities, which mix features of bonds and shares, are investments, and the guarantee does not extend to them. That includes bonds and capital notes issued by banks.
• Super. The scheme does not cover super funds themselves. Inside super it reaches only cash a fund holds on deposit with an ADI, where the trustee is the account holder and one $250,000 limit usually applies to the whole fund. In a large fund, only a small part of each member's cash is likely to be protected.
• Foreign currency and foreign branches. Accounts in other currencies are excluded, as are deposits with branches of foreign banks operating in Australia and accounts at overseas branches of Australian banks.

The limit applies to everything held with one ADI, across all its brands

All of a holder's accounts at one ADI are added together before the limit applies. Three accounts of $100,000 each at the same bank make $300,000, of which $250,000 is covered. Money placed with separate ADIs is covered up to $250,000 at each of them.

Some ADIs trade under more than one brand, and every brand counts towards the same limit. APRA's list of ADIs and their trading names, last updated on 10 August 2026, shows St George Bank, Bank of Melbourne and BankSA as trading names of Westpac, and Bankwest as a trading name of the Commonwealth Bank. Someone with $200,000 under one brand and $200,000 under another brand of the same ADI holds $400,000 with that ADI, and $150,000 of it is above the limit. The list does not include accounts sold under the name of a subsidiary or another company, and APRA recommends checking the product's terms and conditions or asking the institution.

Joint accounts are split equally between the holders. Each person's share is counted together with any accounts they hold alone at that ADI, and the limit applies to the combined amount. In one APRA example, two people share a $300,000 joint account and one of them also holds $50,000 alone at the same institution. That person is covered for $200,000 and the other for $150,000.

The limit applies regardless of where the money came from or how long it stays. Proceeds from a property sale or a super lump sum count like any other deposit.

APRA aims to pay most depositors within seven calendar days

If the Government activates the scheme after an ADI fails, APRA's stated aim is to pay most account holders within seven calendar days. In most cases, payment would come as a cheque or as an electronic transfer to another account the depositor nominates. Depositors would hear directly from APRA and the institution about anything they need to do.

Any amount above the limit is outside the scheme. A depositor may still recover some or all of it when the failed institution is wound up and its assets sold, depending on what is available.

Spreading larger balances across separate ADIs gives each part its own limit

Anyone with more than $250,000 at one ADI, counting all its brands and their share of joint accounts, has some money outside the guarantee. Placing funds with several separate ADIs gives each amount its own $250,000 limit. APRA's list of ADIs and their trading names shows which brands belong together, and its deposit checker helps add up what is covered.

Your adviser can help here, by arranging cash accounts and term deposits across several separate ADIs, keeping track of how much each account holder has with each one, and watching maturity dates, since interest added at rollover can lift a balance over the limit. For money held for longer, your adviser can also explain how bonds, managed funds and other investments compare, as these sit outside the guarantee and carry their own risks.

If you hold larger cash balances, or expect a lump sum, talk to your adviser about how the guarantee applies to your accounts and how your cash could be spread to stay within it.

This article is general information only. It does not take into account your objectives, financial situation or needs, and it is not a recommendation to buy, sell or hold any investment. Figures are as published on the dates given. Past performance is not a reliable indicator of future performance. Read the full risk warning