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Financial Claims Scheme (FCS)

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Financial Claims Scheme (FCS)

Strict Australian regulation protects your deposits with LCU.

LCU meets the same strict standards as all Australian banks, building societies and credit unions under the Banking Act with oversight by the Australian Prudential Regulation Authority (APRA).

APRA’s rules on safety and capital apply to all banks, building societies and credit unions to the same high standards.

What is the Financial Claims Scheme?

The Financial Claims Scheme, (FCS), (also referred to as Australian Government Deposit Guarantee) is an Australian Government scheme that provides protection and quick access to deposits in banks, building societies and credit unions in the unlikely event that one of these financial institutions 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 (ADI) that is incorporated in Australia and authorised by the Australian Prudential Regulation Authority (APRA).

The FCS can only come into effect if it is activated by the Australian Government when an institution fails. Once activated, the FCS will be administered by the Australian Prudential Regulation Authority (APRA).

How is the Financial Claims Scheme activated?

The FCS can only be activated by the Australian Government, and this will only be done in the unlikely event that a bank, building society or credit union has failed and can no longer meet its financial obligations.
In an FCS scenario, APRA would aim to pay the majority of customers their protected deposits under the scheme within seven calendar days.

How is the FCS limit applied?

Under the FCS, deposits are protected up to $250,000 for each account holder at each licenced bank, building society or credit union incorporated in Australia.

Therefore, all deposits held by an account holder with a single banking institution must be added together towards the $250,000 FCS limit, and this includes accounts with any other banking businesses that the licenced banking institution may operate under a different trading name.

What types of accounts are covered under the FCS?

The FCS covers a wide rage of deposit accounts held with bank, building society or credit union incorporated in Australia, but only applies to deposit accounts with funds in Australian dollars.

It applies to the following accounts:

  • Savings accounts 
  • Call accounts
  • Term deposits 
  • Current accounts
  • Cheque accounts 
  • Debit card accounts
  • Transactions accounts
  • Personal basic accounts • Cash management accounts
  • Farm management deposit accounts 
  • Pensioner deeming accounts
  • Mortgage offset accounts (that are separate deposit accounts) 
  • Trustee accounts
  • Retirement savings accounts

How are joint accounts treated under the FCS?

For joint accounts, where individual account holders can be identified, deposits are shared equally, between the various account holders. 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. The FCS limit of $250,000 is then applied to the total amount of the deposit for each account holder at each banking institution.

Where can I get further information on the FCS?

Information on the FCS is available on the FCS website – www.fcs.gov.au & is also available in LCU's Account and Access Facilities - Conditions of Use document