Australian Federal Government deposit guarantee

2 December 2008

In October 2008, the Federal Government announced the introduction of a Deposit Guarantee that will take effect for deposits held in authorised deposit-taking institutions regulated by the Australian Prudential Regulation Authority (APRA), which includes the Commonwealth Bank.

Subsequently the Federal Government announced refinements to the Deposit Guarantee. For deposits of or under $1 million, the guarantee will be free. For deposits over $ 1 million an eligible institution will be able to obtain coverage in return for a fee.  The Government announced that the guarantee was for a period of three years.

The coverage of deposits under $1 million is under the Financial Claims Scheme under the Banking Act. This coverage is automatic and free.

The guarantee of deposits over $1 million is under the Australian Government Guarantee Scheme for Large Deposits and Wholesale funding (the Scheme).  For the benefit of the Australian Government Guarantee under the Scheme ADIs must pay relevant fees to the Reserve Bank as the Scheme Administrator in accordance with the Scheme Rules.

Depositors requiring the benefit of the Guarantee will be required to opt-in nominating the accounts they require coverage for and indemnifying the Bank for the fees payable.

The Commonwealth Bank is a secure Australian financial institution. We have a strong capital and funding position, are one of less than twenty banks worldwide with the security of a AA credit rating and offer a sound management approach.

All deposits with the Commonwealth Bank are Australian Government Guaranteed up until 28 November, 2008. After that date, the following conditions apply:

Deposits of Less than $1 million

If your aggregate deposits with the Bank are equal to or less than $1 million, they will continue to be automatically without charge.

Deposits Greater than $1 million

If your aggregate eligible deposits are more than $1 million, you may opt-in to the Government Guarantee, for which the Federal Government will levy a fee at a rate of 0.70 per cent per annum (charged monthly in arrears).

Should you opt in?

While opting-in is a matter for each customer, customers should consider that the Commonwealth Bank is one of Australia’s most stable and secure banks with a strong credit rating and liquidity.

Our strong capital and funding positions, together with our sound management approach means we will continue to manage our business to protect the interests of our customers and shareholders.

Furthermore, we have no direct exposure to the US subprime market or related assets.

Did you know?

  • More Australians trust Commonwealth Bank with their hard earned savings than any other bank
  • Commonwealth Bank helps more people to own their own home
  • Commonwealth Bank has 96 years of experience helping our customers through good and bad times, and counting.

With this in mind you should consider whether or not to opt-in. We offer stable credit outlooks  – as noted by independent rating agencies Standard and Poor’s, Moody’s and Fitch – we are Best Bank for Australia in Global Finance Magazine’s Best Developed Market Banks Awards 2008, and Money Magazine’s prestigious 2008 Bank of the Year.

Given the Bank’s ongoing strength and stability, it is unlikely that our customers will ever need to utilise the Government’s Deposit Guarantee, but again, each customer should consider the option that best suits their needs.

How do I opt-in? 

If you are seeking even greater assurance with your money and would like to opt-in to secure your deposit, a fee is levied by the Government Guarantee of 0.70 per cent per annum (charged monthly).

To opt-in for the Government Guarantee, simply:

  1. Go to our website at
  2. Download the application form that you will find there.
  3. Complete and sign the form and return it to us at the address provided.

Once Commonwealth Bank has received and processed your application, we will send you a confirmation letter within 10 business days.

We are here to help you

The Commonwealth Bank is available to help you with the new Government Guarantee.

For more information you can visit our website and read our enclosed Frequently Asked Questions document. Alternatively, you can also contact your local Commonwealth Bank branch, visit, call a Relationship Manager or call 13 2221, 24 hours a day, 7 days a week.