How safe is money in the bank?

Discussion in 'Money Management & Banking' started by Capt'n, 1st Aug, 2008.

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  1. Capt'n

    Capt'n Member

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    Just wondering if money in a bank account can be recovered if a bank goes bust?

    Are term deposits safer than online cash management accounts?

    Is there a limit on how much of your funds is protected?
    (Someone told me up to 100K is protected should a bank collapse?)


    Capt'n
     
    Capt'n, 1st Aug, 2008
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  2. ashes

    ashes Well-Known Member

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    I thought that in the case of a bank being wound up, depositors were the first inline, before secured creditors, (With shareholders right at the end) to be paid back. I do not think the Government garentee's deposits in Australia.

    I could be very wrong though.
     
    ashes, 1st Aug, 2008
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  3. Simon Hampel

    Simon Hampel Founder Staff Member

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    Nope - no guarantees for deposits in Australian banks, however, there was a proposal from APRA to offer $20,000 up front for individual depositors in the case of a collapse (funded by the govt), with any remainder coming out of the proceeds from the sale of the banks assets. Note sure how far that proposal got.
     
    Simon Hampel, 1st Aug, 2008
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  4. BillV

    BillV Well-Known Member

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    I always thought that the best protection is to have a homeloan with them
    but it is possible that if they go bust they sell everything including our homes and we lose everything i.e our home equity as well as our savings...:eek:
     
    BillV, 1st Aug, 2008
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  5. crc_error

    crc_error The Rule of 72

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    I thought banks were government backed? thats the difference between a credit union building society and bank..
     
    crc_error, 1st Aug, 2008
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  6. DotnetKris

    DotnetKris Member

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    DotnetKris, 2nd Aug, 2008
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