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What is a government guarantee on savings and how does it help me?

When times are uncertain it’s not unusual to think about your financial safety. This can include things like reviewing your loans and the health of your household budget.

Like many people, you will also look at how to ensure your savings are getting as much interest as possible, and safe from any financial turmoil that may arise.

Luckily, in Australia there is a simple solution for the latter, thanks to the federal government’s Financial Claims Scheme (FCS).

Introduced in 2011 the FCS is a government guarantee on the first $250,000 people place in a wide range of accounts with selected financial institutions, officially called authorised deposit-taking institutions (ADI’s). The government covers a mixture of banks, building societies and credit unions incorporated in Australia.

This means if you deposit up to $250,000 into one or more of the selected institutions, those monies are guaranteed for repayment. While some refer to the program as a bank guarantee, it is the Australian government that would return your funds in the unlikely event that one of the financial institutions failed.

What do I need to know about the government guarantee?

A couple of key points to note about the guarantee are:

  • Individuals  can access the guarantee across multiple banks, up to a limit of $250K at each financial institution.
  • Offshore depositors are also covered by the guarantee for Australian dollar accounts.
  • The guarantee covers bank accounts and term deposits.

The last point is important. As not only can you secure your funds, but also shop around and lock in a great term deposit interest rate.

What sorts of accounts are covered by the government guarantee?

Wherever your money is held, the government has been thoughtful in the list of accounts that are covered by the guarantee.

Some of the accounts covered include:

  • Savings accounts
  • Cheque accounts
  • Debit card accounts
  • Cash management accounts
  • Retirement savings accounts

There are some areas the guarantee does not cover, like accounts not in Australian dollars or held offshore.


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Any advice is general advice only. It was prepared without taking into account your objectives, financial situation, or needs. You should also obtain and consider the relevant Product Disclosure Statement and terms and conditions before you make a decision about any financial product. Investors are advised to obtain independent legal, financial, and taxation advice prior to investing. Past performance is not an indicator of future performance.