Are company accounts also protected under the deposit protection $250k?

Discussion in 'Financial Planning' started by Propagate, 18th Mar, 2020.

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  1. Propagate

    Propagate Well-Known Member

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    With the few threads popping up on bank runs, got me thinking about doing some financial house keeping.

    I'm thinking a good move just now is to pay off some of the offset savings into the mortgage to make sure our personal account is covered by he deposit guarantee.

    I also need to pay the bucket company's "earnings" into it's company account before May this year, I was thinking of sending that money over now (it's with a different bank and in the name if the bucket company), then I wondered if that deposit guarantee also extended to the bucket company? The bucket company is owned by our family trust if hat makes a difference?

    That then got me thinkling about our trading company's business account, is that covered at all? I'm now wondering whether we pay a dividend out of the trading company's war chest so it's not carrying too much surplus funds (unless it's covered by the deposit guarantee, in which case it can stay put as a wages buffer for the staff).

    Cheers.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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  3. Ross Forrester

    Ross Forrester Well-Known Member

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  4. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    The other one that gets asked a lot is super. This is NOT the same. The $250K applies to the fund and not each member. Member "cash" is a notional entitlement or even a trust investment and not a specific bank deposit. APRA reulated funds do have an insurance scheme but it only covers fraud.
     
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  5. Propagate

    Propagate Well-Known Member

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    Never even considered Super! So also a good idea to spread you super across different Super companies and limit to $250k a piece?
     
  6. Ross Forrester

    Ross Forrester Well-Known Member

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    A lot of super funds will mean a lot of costs....
     
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  7. SatayKing

    SatayKing Well-Known Member

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    And if it all goes to completely pear shaped guarantees mean naught and all bets are off. Legislation can be changed.
     
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  8. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Superfund trustees access the guarantee. But I may argue that Sunsuper would have multiple cash accounts with its major banker with just $250K guranteed. Not $250K per member. members with ""cash" have a notional account allocation and there is not a bank account for each member anywhere. This reflects the trust nature of super. Super is only insured (gurantee applies to a loss) for loss due to fraud and ONLY for a APRA regulated fund not a smsf.

    I would argue if a bank were to go under the economy would be sold to Fiji for $1 and there would be no floor for the AUD. It WONT happen. The Government would assist a bail out by a Big 4 bank. This is the 4 pillars policy. (Note it was once the 6 pillars so it could become the 3 pillars policy just as easily)
     
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