Just a quick one that after asking ChatGPT it confused me more. So I know the guarantee is per person + bank, so I can have $250k with bank A and then another $250k with bank B. But what if I have multiple accounts with bank A, do they all share the $250k amount? And in case I have a personal account + joint name account with bank A, how does the split work?
$250k Government Guarantee for Multiple Accounts from The Same Bank
justwii on 06/03/2024 - 18:55
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Thanks, that ADI is a very accurate technical term, but doesn't help with my question.
Perhaps try to read on a little further?
Perhaps trying is not enough? Explaination required perhaps?
@justwii: Do, or do not, there is no try.
As a general rule with most things to do with government, assume the lowest/easiest/cheapest position. Eg, joint account is still in your name, so will count as part of that $250k for you at that institution.
The answer is in that link lol
Call me dumb as you wish, but I couldn't find the answer I need. Searching "joint" in the page also didn't reach anything.
@justwii: Q1 answered real early
The 250k is per ADI
The joint Q you should have googled genuinely the top hit, I hate myself for even doing this for you“ For joint accounts, the amount of FCS protection is determined by splitting the deposit equally between the account holders. Each account holder's share is then added to any other eligible deposits they may hold under their own name at the same bank, building society or credit union before the $250,000 FCS limit is then applied to the total for each individual.”
https://www.apra.gov.au/frequently-asked-questions-about-ban….@original15: That FAQ is gold, thanks for linking it.
So for anyone having trouble understanding, if Ann and I hold a joint name account ($250k deposit) with bank A and I have a personal account ($250k deposit) with bank A as well, then obviously my $250k is covered, however, that $250k in the joint name account cannot be fully covered by Ann's protection quota. Only $250k/2 = $125k is protected by Ann's quota, so we have $125k in the joint name account unprotected, while Ann has another $125k quota for her own saving with bank A (if she has other saving account).
I suspect government of the day would guarantee all deposits anyway to prevent a run on banks and cause larger problems.
Covid shows governments will do whatever is necessary to stabilise the economy
Covid shows governments will do whatever is necessary to stabilise the economy
Oh, is that what they were trying to do?
Just a quick one that after asking ChatGPT it confused me more
So if ChatGPT gave you an answer that didn't confuse you (even though it may have been wrong!) you would have followed it blindly with more than $500k of your money?
Its just a more interactive version of wiki to me, as much as I trust wiki, it gets the same level of trust.
How often do you ask wikipedia for financial advice?
But what if I have multiple accounts with bank A, do they all share the $250k amount?
Correct. It is per bank/ADI, not per account.
ChatGPT4 is so 2+ days ago.
These days you're better off getting your financial advice from Claud3 Opus:Under the FCS, deposits are protected up to a limit of $250,000 per account holder, per Authorised Deposit-taking Institution (ADI). ADIs include banks, building societies, and credit unions.
Here's how the FCS coverage works:
If you have multiple accounts with the same ADI under the same name, the total coverage for all those accounts combined is $250,000.
If you have a joint account, each account holder is entitled to up to $250,000 in FCS coverage. This is separate from the coverage for individual accounts.
For example, if you have a personal account and a joint account at the same ADI:Your personal account would be covered up to $250,000.
Your share in the joint account would be covered up to $250,000.
Your joint account co-owner's share would also be covered up to $250,000.
So, you could have up to $500,000 in FCS coverage at a single ADI ($250,000 for your personal account + $250,000 for your share of the joint account), while your joint account co-owner would have up to $250,000 in coverage for their share of the joint account.I also asked it what happens if I have money split across Ubank and Nab (since Ubank is owned by Nab):
For the purposes of the Financial Claims Scheme (FCS), Ubank and NAB would be considered the same ADI. Therefore, if you have accounts with both Ubank and NAB, they would share the same $250,000 FCS coverage limit.
Here's an example:
If you have a savings account with Ubank with a balance of $150,000 and a checking account with NAB with a balance of $200,000, your total deposits with this ADI (NAB) would be $350,000.
However, only $250,000 of this amount would be covered by the FCS. The remaining $100,000 would be uninsured.So cool. But that joint account $250k separation from personal account seems to conflict with that apra.gov.au link above?
That should tell you how much value you should put into AI generated answers….
Correct. Can't trust anything LLMs say without verifying it. I guess it's kind of like ozbargain or reddit in that regard ;)
It needs to be said that ADI has never been activated and applied in practice.
In reality if there were ever a bank run the Government may take years to reimburse anyone, leaving people dry for extended periods.
In practice it's probably not a $250k hard balance, they'll end up reimbursing much higher amounts. (We saw it in the US during 2023)
I’m very curious to know what the timelines would be like.
I used to think it was weird people would take their money out of the banks and put it under their mattress, but lately I’ve started to understand why they do it.
Giannis Antetokounmpo enters the chat.
https://nypost.com/2022/04/08/bucks-star-giannis-antetokounm…
That is just brilliant. Lets be honest, he has a full time finance manager managing this on his behalf, though I love the picture of him sitting late in the night on his laptop shuffling excel sheets of info.
Hmm, not sure the government guarantee is worth much of anything if the whole system went down, hope we don't have to find out. And then there's the 'bail-in' legislation to be contended with as well. I'm pretty sure they don't implement these things for no reason. Anyway, we'll see, just don't bet your future on your money being secure.
Just chiming in with a variation I’ve researched. If you have a business or SMSF etc, that is a seperate entity to yourself, unlike a joint account.
So I know the guarantee is per person + bank
Correct
so I can have $250k with bank A and then another $250k with bank B
Correct
But what if I have multiple accounts with bank A, do they all share the $250k amount?
See your statements above, it is per bank, not per account.
it is per ADI, not bank https://www.apra.gov.au/list-of-authorised-deposit-taking-in…