How the Financial Claims Scheme works

What it is

The Financial Claims Scheme is an Australian Government guarantee on deposits held with authorised deposit-taking institutions — banks, building societies and credit unions supervised by APRA.

If an ADI fails and the Government activates the scheme, protected deposits are repaid up to the cap. Depositors do not pay for it and do not apply for it.

The limit

A$250,000 per account holder, per ADI.

Each part matters:

• Per account holder — a joint account with two holders is covered up to $250,000 each, so $500,000 in total.
• Per ADI — all your accounts at one institution are added together against a single $250,000 cap.

Licences, not brands

The most common misunderstanding, and the one worth acting on.

The cap applies per ADI licence, not per customer-facing brand. Several well-known Australian banking brands are subsidiaries or trading names of a single licensed institution.

If you hold $200,000 with one brand and $150,000 with another, and both operate under the same ADI licence, you are covered for $250,000 in total — not $350,000. The remaining $100,000 is not protected.

To hold more than $250,000 with protection, spread it across separately licensed ADIs.

What is covered

• Transaction accounts
• Savings accounts
• Term deposits
• Cash management accounts held with an ADI
• Deposits with credit unions and building societies that are ADIs

What is not covered

• Shares, managed funds and ETFs
• Superannuation
• Insurance products, other than certain general insurance under a separate part of the scheme
• Cryptoassets
• Money held with entities that are not ADIs
• Deposits held with a foreign bank branch that is not an Australian ADI

The line is between a deposit, where the institution owes you money, and an investment, where you own something that can fall in value. The scheme covers the first only.

It has to be activated

Unlike some overseas schemes, the FCS is not permanently in force. It applies to a specific institution only once the Australian Government declares it, following an ADI failure. In practice APRA would then aim to pay protected depositors promptly.

This is a mechanical distinction rather than a reason for concern — but it is the reason the scheme's own material talks about the guarantee being "available" rather than continuously operating.

Superannuation is separate

Super is not covered by the Financial Claims Scheme, and it is not a deposit. It is regulated under a different framework and its value depends on the investments inside it. If you are checking protection on retirement savings, the FCS is not the scheme to look at.