How safe is money in the bank?

All

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

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.

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.

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...

I thought banks were government backed? thats the difference between a credit union building society and bank..

This article discusses in more detail:

Is your bank deposit safe? No - but it could be | theage.com.au