Financial Claims Scheme

What is the Financial Claims Scheme?

The Financial Claims Scheme (FCS) is an Australian Government scheme that provides protection to deposits in banks, building societies and credit unions, and to policies with general insurers in the unlikely event that one of these financial institutions fails.

The Financial Claims Scheme comes into effect when an institution fails. Under the Financial Claims Scheme, deposits are protected up to a limit of $250,000 for each account holder at each bank, building society and credit union that is incorporated in Australia and authorised by APRA. Deposits held at Southern Cross Credit Union are protected under the Financial Claims Scheme up to a limit of $250,000 per account holder.

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.

Bail in laws

The Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018 strengthens the Australian Prudential Regulation Authority’s (APRA) powers during a financial crisis. No instruments have been made to allow APRA to bail-in funds in a deposit account.

How is the FCS limit applied?

The FCS limit of $250k 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 $250k FCS limit, and this includes accounts with any other banking businesses that the licenced banking institution may operate under a different trading name.

Where can I get further info?

To find out more about the Financial Claims Scheme, visit fcs.gov.au.