Australian Government guaranteed deposits seal for Offset account?

Folks,

Is the $250k guaranteed limit mentioned in Australian Government guaranteed deposits seal | ASIC applicable to the offset account or redraw facility?

The FCS applies to deposits held in all authorised deposit-taking institutions (ADIs) incorporated in Australia. This includes banks of all sizes, credit unions and building societies.

Under the FCS, the Government guarantees deposits up to a cap of $250,000 per account-holder, per ADI.​

Would it be better to split an offset or a redraw facility loan on a different bank in the event of a bank collapse if the offset or redraw facility loan were over $250k?

I would appreciate any comments and sharing you could provide.

 

See the 3 existing and recent threads on this. In short it doesn’t matter whether it is covered or not as you will owe the ban more than it owes you

 

It's not just the overall owing - there might be other considerations related to loss of Offset monies:

• Offset money might be borrowed from friend/relative/other entity to earn higher interest or any other reason.
• Offset money might just be waiting to be deployed --this would be a lost opportunity

Homer has a loan of 1 Million from The First Bank of Springfield
He has 500K (borrowed from Mrs. Bouvier ) in his offset which Marge and her mother want to use for an IP.

1. What should Homer do to safeguard his MIL's money and planned investment if the bank is likely to collapse? He would rather lose interest from his offset for a couple of months than upset Marge and her mother.
2. How much of 500K would Mrs Bouvier recover from Homer (via Federal Bank Guarantee) if The First Bank of Springfield collapses ?

 

1 not borrow it if he thinks that would happen

2. she is an unsecur d credit or him but he would lose anything however he might not have access to it anymore. Govt guarantees or not