The Australian Government's Financial Claims Scheme (FCS) protects people's deposits in the unlikely event that a bank, building society or credit union fails.
The Financial Claims Scheme (FCS) is an Australian Government Guarantee scheme that provides protection and quick access to deposits in banks, building societies and credit unions in the unlikely event that one of these financial institutions fails.
Under the FCS, certain deposits are protected up to a limit of $250,000 for each account holder at any bank, building society, credit union or other authorised deposit-taking institution (ADI) that is incorporated in Australia and authorised by the Australian Prudential Regulation Authority (APRA).
The FCS can only come into effect if it is activated by the Australian Government when an institution fails. Once activated, the FCS will be administered by the Australian Prudential Regulation Authority (APRA).
In an FCS scenario, APRA would aim to pay the majority of customers their protected deposits under the Scheme within seven calendar days.
The FCS limit of $250,000 applies to the sum of an account holder's deposits under the one banking license.
Therefore, all deposits held by an account holder with a single banking institution must be added together towards the $250,000 FCS limit, and this includes accounts with any other banking businesses that the licensed banking institution may operate under a different trading name.
The Australian Prudential Regulation Authority (APRA) has an extensive list of Frequently Asked Questions surrounding the coverage of the FCS, how it is activated and administered for account holders at banks, building societies and credit unions and general insurance policyholders.
Information on the FCS is available on the FCS website – www.fcs.gov.au.