Government Deposit Guarantee

Deposits with Heritage Bank are guaranteed by the Federal Government’s Financial Claims Scheme, which has now been confirmed as a permanent protection measure in the Australian financial services sector.

The Financial Claims Scheme (FCS) ensures that depositors with credit unions, banks, and building societies are guaranteed repayment of their funds in the extremely unlikely event that any banking institution fails.

The FCS provides a guarantee of $250,000 per person per institution. This cap took effect for all new deposits from 1 February 2012 and is the same for all institutions, whether they are banks, building societies or credit unions.

The Government introduced the FCS at the height of the global financial crisis in October 2008 to guarantee retail deposits held at authorised deposit‐taking institutions (ADIs). The initial cap was $1 million per person per institution. The Government also undertook a review of these arrangements at a later date.

The Government announced in December 2010 that the FCS would be retained as a permanent fixture in the financial services sector. In September 2011, after a review and a consultation process within the sector, the Government announced that the cap on guaranteed deposits would be set at $250,000 from 1 February 2012.

Heritage, along with all other credit unions, building societies and banks, meets exceptionally high prudential standards under the Banking Act, with strict oversight by the Australian Prudential and Regulation Authority (APRA). In addition, under the Banking Act, depositors are given priority over all other creditors in the event of the failure of an ADI. This depositor priority continues irrespective of Government guarantee provided by the FCS. While the Government guarantee is therefore unlikely to be required, it strengthens public confidence in the safety, stability and security of the Australian banking system.

What is the Financial Claims Scheme?

The Financial Claims Scheme (FCS) 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).

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?

The FCS limit of $250,000 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 $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.

Where can I get further information on the FCS?

Information on the FCS is available on the FCS website –

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