What is the Financial Claims Scheme?
The Financial Claims Scheme (FCS) isan Australian government scheme that provides protection for our members. It provides protection, security and quick access to deposits in banks, building societies and credit unions in the unlikely event that a financial institution 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 that is incorporated in Australia and authorised by the Australian Prudential Regulation Authority (APRA).
How is the Financial Claims Scheme activated?
The Financial Claims Scheme (FCS) can only be activated by the Australian Government in the event of a financial institution failure. This means that if a bank, building society, credit union, or other authorised deposit-taking institution becomes unable to meet its obligations, APRA steps in to ensure the protection of customer deposits.
Once activated, the FCS is administered by the Australian Prudential Regulation Authority (APRA). APRA is responsible for overseeing the process and ensuring that affected customers receive their protected deposits as quickly as possible.
APRA aims to pay the majority of customers their protected deposits within seven calendar days of the FCS being activated. This swift response is designed to minimise the disruption and financial uncertainty that customers might face in such a scenario.
How is the Financial Claims Scheme limit applied?
The FCS limit of $250,000 applies to the sum of an account holder's deposits under the one banking licence. Therefore, all deposits held by an account holder with a single banking institution must be added together towards the $250,000 limit. This includes accounts with any other banking businesses that the licenced banking institution may operate under a different trading name.
To find out more, visit the Banks, Building Societies and Credit Unions page and the Financial Claims Scheme FAQs page on the APRA Financial Claims Scheme website.
Financial security with Broken Hill Bank
At Broken Hill Bank, we prioritise your financial security. As a participant in the Financial Claims Scheme, we ensure that your deposits are protected and accessible even in the unlikely event of a financial institution failure. For more detailed information or any specific queries, please feel free to contact us.
For additional information, visit the Financial Claims Scheme website. If you have any further questions, don’t hesitate to reach out to our team for assistance.
FAQs
What types of accounts are covered under the FCS?
The FCS covers a wide range of deposit accounts, including savings accounts, term deposits, and transaction accounts. It does not cover investments in shares, bonds, or managed funds.
Are joint accounts covered by the FCS?
Yes, joint accounts are covered by the FCS. Each account holder is entitled to protection up to the $250,000 limit. For example, a joint account held by two people could be protected up to $500,000.
Is the FCS protection automatic?
Yes, FCS protection is automatic and does not require any action from the account holder.