With the bank deposit guarantee of $1 million due to expire next month, the Gillard Government has decided to extend its promise to stand behind Australian licensed banks, credit unions and building society’s deposits until 31st January 2012.
Citing continued global market uncertainty, the Treasurer, Wayne Swan, announced this extension along with a new permanent cap for the Financial Claims Scheme of $250,000 per person, per financial institution that would be introduced from 1st February 2012.
For those with term deposits in existence before 10th September 2011 that goes beyond February 1 of next year, the $1 million protection level will remain until 31st December 2012, or until the term deposit matures, (whichever occurs sooner) at which time the $250,000 cap will apply.
This new scheme will still cover deposits held in Australia by foreign banks that hold an Australian-based banking license; but will not apply to deposits sitting in braches of Australian banks offshore.
The new Australian cap (which requires assent from the Governor-General) will still be one of the highest deposit protection schemes in the developed world. Whilst it is behind the equivalent of a $288,000 deposit scheme in the US, it is more than double similar programs in Canada and Japan.
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I wonder what the guarantee will be worth once governments start falling over. It’s not the governments money anyway it’s the people’s. I am over the way the banks and governments enjoy profits when available but socialise the losses !!!!