Banks and the Financial Claims Scheme

Also known as the Bank Guarantee
Financial Claims Scheme

The Financial Claims Scheme (FCS) is an Australian Government scheme that provides protection to deposit-holders with Australian incorporated banks, building societies and credit unions (known as authorised deposit-taking institutions or ADIs), and general insurance policyholders and claimants, in the unlikely event that one of these financial institutions fails.

The FCS is a government-backed safety net for deposits of up to $250,000 per account holder per ADI. It also covers most general insurance policies for claims up to $5,000, with claims above $5,000 eligible if they fulfil certain criteria.

Once activated by the Australian Government, the FCS is administered by the Australian Prudential Regulation Authority (APRA).

Read more about this here.

MoneySmart article on Banking