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Frequently asked questions about accounts and account holders

The following frequently asked questions relate to the Financial Claims Scheme for banks, building societies and credit unions.

1. Who or what is defined as an 'account holder'?

Under the FCS an account holder is defined as:

  • an individual
  • a body corporate
  • a body politic
  • a partnership
  • any other unincorporated association or body of persons
  • a trust
  • a superannuation fund (including a self-managed superannuation fund)
  • an approved deposit fund.

The FCS applies to an account holder of a protected account at a bank, building society or credit union that is incorporated in Australia.

2. How is an account holder with multiple accounts under the same name at the same banking institution treated under the FCS ?

If an account holder has multiple accounts under the same name at the same bank, building society or credit union that is protected under the FCS, then the total combined amount of these accounts would be covered up to the FCS limit of $250,000.

Case study

Mary has three protected accounts under her name with the same Australian bank, each containing $100,000 with a total balance of $300,000. However, the FCS only protects a total amount of deposits up to $250,000 per account holder per bank, building society or credit union. Therefore, in the unlikely event that Mary's bank failed and the FCS was then activated, Mary would be protected up to $250,000 under the FCS, and the remaining $50,000 would not be protected. However, Mary may be able to claim her remaining $50,000, or at least some of it, in the liquidation of Mary's bank, depending on what assets were available. For further information on the liquidation process see the FAQ below.

3. How are account holders with joint accounts treated under the FCS? 

The FCS limit of $250,000 is applied to the combined amount of deposits for each account holder at each banking institution. For joint accounts, deposits are shared equally between the various account holders, where individual account holders can be identified. As such, each account holder's equal share of any joint account will need to be added to any other eligible deposits they may hold under their name at the same banking institution.

Case study

Alex and Peter have $300,000 in a joint account with a credit union. Alex also has another account with the same credit union in his own name that has $50,000, but Peter does not have another account. The FCS protects a total amount of deposits up to $250,000 for each account holder for each bank, building society and credit union. Therefore, Peter is covered under the FCS for $150,000 (half the joint account) while Alex is covered for $200,000 (being the sum of $150,000 from the joint account in addition to the $50,000 from his individual account).

4. What accounts are protected under the FCS?

A list of the types of accounts that are protected under the FCS is available on the page Types of accounts covered under the FCS.

5. How are business accounts treated under the FCS?

Business accounts are treated in the same manner as other accounts - they are covered under the FCS as long as the account satisfies the definition of an account that is protected under the Scheme. 

Business accounts held by a sole trader are considered to be held in the name of the individual account holder and will be aggregated with other accounts protected under the FCS that are held by that account holder with the same banking institution.

Business accounts held in multiple, yet separate, individual’s names are to be treated in the same manner as joint accounts, and the account balance split equally between all named account holders and aggregated with other applicable individual accounts.

All other business accounts where the account is held in the name of the business entity are treated as a separate account holder. For business partnerships see below.

6. How is a partnership treated under the FCS?

This will depend on how the account has been set up and who is/are the named account holder(s). If the account is held or kept in the name of a partnership, that partnership will be the account holder. However business accounts held in multiple, separate names (that are not specifically set up as a partnership account) are treated in the same manner as joint accounts, and therefore the account balance split equally between all named account holders.

7. Is a redeemable preference share, such as those issued by mutuals or credit unions, considered a protected account?

A redeemable preference share would not normally fall within the definition of a protected account under the FCS (prescribed in paragraph 5(4) of the Banking Act 1959) as it would not normally be classified as an account.

8. Are Retirement Savings Accounts covered under the FCS?

Retirement Savings Accounts (RSAs) held with banking institutions are covered under the FCS.

9. If a self-managed superannuation fund (SMSF) has multiple trustees, are they all covered up to $250,000 each?

No. The $250,000 limit under the FCS applies to the SMSF as a whole irrespective of the number of trustees. This is because under the FCS an SMSF is treated as the account holder.

10. If we have the following accounts with the same banking institution, how much will we be covered under the FCS:

  • 'Smith' Self-Managed Superannuation Fund (SMSF), with trustees John Smith, Jane Smith and Lucy Smith - $300,000
  • Joint account, John Smith and Jane Smith - $100,000
  • Personal account, John Smith - $25,000
  • Personal account, Jane Smith - $10,000

Because SMSFs are recognised as an account holder under the FCS, the Smith’s SMSF would be covered separately up to the FCS limit of $250,000. In relation to the joint and personal accounts, John Smith would be covered for a total of $75,000, consisting of $50,000 for the joint account and $25,000 for the personal account, while Jane Smith would be covered for a total of $60,000 which would consist of $50,000 for the joint account and $10,000 for her personal account.

If you are unable to find the information you are looking for on this page, please contact APRA . If you are seeking technical information on the implementation of the FCS go to the Financial Claims Scheme for authorised deposit-taking institutions