Spreading Your Deposits: How to Maximise Government Protection

Understanding the Protection Limit

The government guarantee protects up to $250,000 per person per authorised deposit-taking institution (ADI). For savings exceeding this amount, spreading across multiple institutions ensures complete protection.

How to Structure Larger Deposits

Example for $600,000 in savings:

• Bank A: $200,000 term deposit at 7.8% P.A.
• Credit Union B: $200,000 term deposit at 8.0% P.A.
• Bank C: $200,000 term deposit at 7.5% P.A.
• Total protection: $600,000 fully guaranteed

Benefits Beyond Protection

Spreading deposits also provides:

• Rate optimisation: Access best rates from different institutions
• Diversification: Not dependent on any single institution
• Flexibility: Stagger maturity dates for regular access
• Negotiating power: Compare offers and negotiate

Managing Multiple Accounts

Keep track of your deposits:

• Maintain a simple spreadsheet with institution, amount, rate, and maturity
• Set calendar reminders for maturity dates
• Review rates at each maturity to ensure competitiveness
• Keep login details secure but accessible

Joint Account Considerations

For couples, joint accounts provide additional protection:

• Each joint holder receives proportional coverage
• $500,000 joint deposit = $250,000 protection per person
• Combine with individual accounts for maximum protection

SMSF and Trust Deposits

Special rules apply to:

• SMSFs: The fund (not members) is the account holder
• Family trusts: The trustee is the account holder
• Companies: Separate protection from personal deposits

Practical Strategy

For most Australians, 2-4 institutions provide adequate diversification while remaining manageable. Focus on APRA-authorised institutions with competitive rates and solid reputations.