Bank Deposit Guarantee = BAD NEWS

[GreatPig]

CBA advise that the interest is only guaranteed if it is added to the original deposit at the end of the term and rolled over into a new term deposit.

So if you leave it in an ordinary account instead of adding it to a new term deposit, it's not guaranteed?

I thought all money was guaranteed, once actually in a bank account.

GP

 

[doctorj]

Just heard it's 2%!!!!!!!!!!!!!!!!!!!! (I hope what I heard is a typo)
Is this guy (krudd) a total efn idiot??????
There is no need for me to put down on paper what this is going to do to interest rates, business sentiment, the economy in general. It should be obvioous to the intelligent members of this forum.
This guy has to go. A complete tosser!

Lets wake up a little here. Do you know how other countries fund their deposit insurance schemes? Most are funded ex-ante by the banks themselves, based on a % fee of eligible deposits or total deposits. Banks pay this and one way or another its passed on to customers (fees, a wide interest rate spread).
This is standard practice. How can banks exist without deposits forming part of their capital base? Deposit insurance helps protect it.

I spoke to a chap from a small Central Asian bank last night and his bank pay a % fee and the amount is capped. These are made up numbers, but say you have $200,000 in the bank, they would pay $6,000pa in premium, but in the bank fails, the depositor only receive a max of $6,000 back from the deposit insurer.

In effect they pay up to 100% of the sum insured in premium every year on some accounts. In comparison to the rest of the world, the Australian scheme is quite cheap.

 

[Julia]

So if you leave it in an ordinary account instead of adding it to a new term deposit, it's not guaranteed?

I thought all money was guaranteed, once actually in a bank account.

GP

Doesn't sound like it GP. Might be good for others to check with their financial institutions to find out their policy.

I will be following up the CBA reply asking the very question you've raised.
e.g the current instruction on the CBA deposit is for them to pay the interest at end of term into an ANZ a/c. Their reply indicates that that interest would therefore not be guaranteed.