In the unlikely event that a bank, building society or credit union becomes insolvent, the Australian Government may activate the Financial Claims Scheme, which enables quick access to deposits that are protected under the Scheme. The Scheme is also referred to as the Australian Government guarantee on deposits.
Under the Scheme, certain deposits are protected up to a limit of $250,000 for each account-holder at any bank, building society or credit union that is authorised by the Australian Prudential Regulation Authority (APRA). These institutions are known as authorised deposit-taking institutions (ADIs).
In the likely even that a bank becomes insolvent the Australian Government would be forced to activate the Financial Claims Scheme (as Rudd's govt did at an emergency weekend meeting during the GFC). Because if they don't the run on banks would force them to close their doors. Just to be safe, spread your money between banks and entities of no more than $100,000 per account in case the govt is forced to reduce the guarantee amount otherwise risk government credit rating downgrades.
