I understand the general benefits and flexibility of having an IO mortgage and then stashing your savings into an offset; especially if you have a PPOR which may become an IP in the future. However I am wondering how people mitigate the risks of having more than $250k in the offset against your PPOR. My understanding is that the Aus gov only guarantees $250k if the bank was to go under. So what do you do if say you have $1m saving that you want to put in your offset? I do not have anything near this amount, nor do I have a PPOR but it's something that I've been wondering about. Do you end up paying off the principal to keep the amount less than $250k? Or do you just take the risk of having more than $250k in the bank with the belief that Australian Banks will be ok? Or are there other sound strategies to minimize non-deductible loans while not exposing yourself to the risk of losing your savings?