Offset and Savings accounts moneys - What if Banks fail or we get a run on the banks

Stuff burying yourself in a hole in the ground. I'm going to be out here rocking on with the horde!

 

I can see you leading the Horde

 

I need a Viking helmet and bearskin cape.

 

I wouldn't mind if they absorbed it into the loans. Only worried if I lost the offset money and still had the debt. Can that happen?

 

The cynic in me says there would be something in legislation that would allow the banks to take your offset and allow your loan to remain the same. If this were the case it would likely happen with little or no warning.

If you have big funds you would be an easy political target and considered someone who could recover from loss of funds

 

Very cynical view - I highly doubt they would legally get away with that but I'm no lawyer, if funds were in an offset it would be classed stealing your money
IF they put it on the loan balance to reduce it then that's a different story but even that is highly unlikely unless you actually have a redraw offset not a true offset account.

 

Here's a fun Google search for everyone to enjoy!

Can the government take your money from bank account in Australia?
https://www.google.com.au/search?sxsrf=ALeKk03A_sGKcIaSlw4UiR3Kcj2gVQ9aig:1584502141311&q=Can+the+government+take+your+money+from+bank+account+in+Australia?&sa=X&ved=2ahUKEwi7jp26iqPoAhVPyjgGHVSpBGwQzmd6BAgMECQ

Some highlights...
Legal opinion: Australian deposits can be ‘bailed in’
Government Cash Grab - your bank account may be at risk - Smith Wealth Partners

 

Is it $250k guaranteed? Offset is your own savings bank gives you incentive to keep your savings with them by allowing it to offset your amount owed on your loan, other than that it is no different to other savings

 

would really appreciate it if some one with knowledge of this subject could chime in on this, anyone ?

 

Hey, love to know the answer as well. Got just shy of 1 million in offset account, was ready to buy. Now very scared. If the bank takes it, I be in big big trouble.

 

Thought exercise. If the answer is yes the banks can take your offset money, what are you going to do about it?

 

it's $250K guaranteed IF your money is sitting with lender that is an Authorised Deposit-taking Institution yes. What many don't realise with smaller second tier/online lenders that have "offset accounts" aren't true offsets and they're actually redraw accounts and the money is not guaranteed by the Government.

You lost me here I'm not sure what this is in response too, I never said money in an offset isn't savings?

 

Better spend it quick then!

 

If I owe you $1mil and you owe me $800k how much could I sue you for?

 

In response to the stealing part. On the same page as you, the offset amount is savings and only $250k guaranteed (with the right institution as you rightly pointed out). My thinking is that your money could disappear and your debts still remain and it would all be legal.

 

Put offset into loan, redraw then put the lot on CBA.ASX (or your bank)
Claim the interest, sit back and count the dough in 12 months time. That way if banks are bailed in you get your money back in a fashion.

 

How so? Disappear where?

 

I dont know, that would be my worst nightmare. They will probably sell my house at a loss, and then drive me onto the street with a big debt.

 

but is there something you would do to prepare for this?

if someone is hit in the head by a falling meteor, thats bad. But is it something you would, or could, do anything now to prevent?

the thought exercise is to determine whether a possible bad outcome is something you want to prepare for. You cant prepare for everything.

just because something can happen doesnt mean its something you want to actually prepare for, since the cost might be too high.