Australia Government Deposit Guarantee changes
You are here:
Australia Government Deposit Guarantee changes - CFCU
| |||||||||||||||
| The Government has announced changes to the Financial Claims Scheme with the cap being reduced to $250,000 from 1 February 2012. | |||||||||||||||
| How are deposits at Community First protected? | |||||||||||||||
| Australia has one of the strongest banking systems in the world. You can have confidence that Community First and all Australian banking institutions – credit unions, banks and building societies – must meet the toughest regulatory standards and protections, designed to protect you. | |||||||||||||||
| What is the Financial Claims Scheme (the deposit guarantee)? | |||||||||||||||
| All banks, building societies and credit unions (including Community First) in Australia meet exceptional high standards and rules set by the Australian Prudential Regulation Authority (APRA). APRA also administers the Financial Claims Scheme, which provides additional protection for deposits. The Financial Claims Scheme ensures that depositors with credit unions, banks, and building societies will be guaranteed repayment of their funds in the extremely unlikely event that any banking institution faces stress. The Scheme includes a guarantee of $250,000 per person per institution. Existing term deposits in place at 10th September 2011 have a continuing $1 million guarantee until December 2012. | |||||||||||||||
| Why has the Financial Claims Scheme cap changed? | |||||||||||||||
| The initial $1 million cap for the Financial Claims Scheme was an emergency response to the global financial crisis. It was introduced in 2008 for three years. Australia has the strongest banking sector in the world and the Government has decided this emergency response is no longer required, given our system’s clear strength. The new cap brings Australia into line with similar guarantee schemes overseas. | |||||||||||||||
| How does this affect my deposits with Community First? | |||||||||||||||
| The Scheme applies in exactly the same way to Community First as with all banks, credit unions and building societies. From 1 February 2012, deposits will benefit from a permanent $250,000 guarantee. There are transitional arrangements in place for all term deposits made prior to 10th September, and new deposits between 10th September and 1 February 2012. | |||||||||||||||
| Strict Australian regulation protects your deposits with Community First | |||||||||||||||
| Financial institutions like Community First meet the same strict standards as banks, under the Banking Act with strict oversight by APRA. APRA’s rules on safety and capital apply to all banks, building societies and credit unions to the same high standards. Community First as a mutual, is owned by our Members. Our focus is therefore on your interests, and we are conservative and careful managers of our Members’ money. Credit unions and mutual building societies have the highest level of capital in the banking system providing exceptional stability. Collectively, mutuals have combined assets over $80 billion, and over 4.5 million Australians as members. | |||||||||||||||
| Summary of Changes | |||||||||||||||
| Deposits less than $1m Deposits of up to $1m per Member are still covered under the existing government guarantee, which is in place until at least October 2011. | |||||||||||||||
| Deposits greater than $1m | |||||||||||||||
| Members have had the option to pay a premium for the guarantee for that amount greater than $1m. This will no longer be available from 31st March 2010.To date, no Members have opted to take up the guarantee on deposits over $1 million. | |||||||||||||||
| Community First is safe and secure | |||||||||||||||
| As a mutual, we are owned by our Members. Therefore, our focus is on your interests, and we are conservative and careful managers of our Member’s money. That’s been our Member “guarantee” for 50 years! | |||||||||||||||
| |||||||||||||||
