Compare government guaranteed term deposits

Term deposits offer a range of benefits. As well as letting you earn interest on your deposit at a fixed rate, so you can calculate your returns in advance, they are covered by a government guarantee.

The Australian government’s Financial Claims Scheme covers term deposits opened with authorised deposit-taking institutions (ADIs). This guarantee ensures that your money will be safe and your savings secure, even if the bank or financial institution were to go out of business.

The most significant benefit of the government guarantee is stability. The government guarantee was first introduced in response to the 2008 Global Financial Crisis (GFC) with the goal of improving Australia’s financial stability.

Because financial institutions must fulfill strict requirements to operate as a licensed ADI, it’s unlikely that your deposit will ever need to be covered by the government guarantee scheme. That said, the guarantee can offer peace of mind to customers and make sure they feel secure in trusting financial institutions with their savings.

It’s important to keep in mind that the government guarantee is capped at $250,000 per person per institution. This means that if you have deposits of more than a quarter of a million dollars in the bank, you may not get all of this money back from the government guarantee if the bank were to go out of business.

To help ensure your savings are guaranteed, you could consider dividing your wealth between different banks so that each ADI holds a maximum of $250,000. Keep in mind that some ADIs operate under different trading names – be sure to check that you aren’t accidentally staying with the same ADI.

The government guarantee scheme covers more than just term deposits. The scheme also covers savings accounts, transaction accounts and trustee accounts, just to name a few.

Essentially, any money you deposit with a licensed ADI is covered by the guarantee. This means the $250,000 cap applies across all of your deposits with an ADI as well – to guarantee higher balances, it may be worth diversifying your deposits between different ADIs.

Your term deposits, and any other money you deposit with a bank or similar financial institution, should be automatically covered by the government guarantee if the bank is a licensed ADI. 

For a bank, credit union, or fintech to accept deposits in Australia, it must get an ADI license. To be certain if your money will be guaranteed, you can always search for your financial institution on APRA’s list of ADIs.

Your account is covered by the government guarantee for as long as your deposit remains in your account. Whether you’ve opened a term deposit for six months or six years, the government guarantee will apply throughout your entire term.