It would appear that at the moment, it is possible to have up to $1million per customer per institution (eg bank) in a mortgage offset account, and it is guaranteed by the Government. http://www.citi.com.au/citigroup/pdf/Deposit_Guarantee_FactSheet_FINAL.pdf
After 12 October 2011, that guarantee will apparently no longer apply. How worried about this are you? Worried enough to not have quite so much in your offset account, but instead put it onto the mortgage? Or at the very least, have each mortgage with a different bank to spread the risk?
Discuss. Keen to hear people's thoughts and strategies.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Jac,
To be honest I'm a lot less worried about it than I was 18 mths ago.
I think there may be a shift of funds to the big 4 banks once the guarantee is lifted so that should boost their deposits and strengthen their balance sheets.
A lot of smaller players attracted funds when the guarantee was introduced, but some of these are seen as risky and hence people may withdraw their funds once the guarantee is lifted.
Another thing to remember is that the government guarantee will not cover any interest, and there is no timeline on how long it will take for the government to refund your money in the event of a bank going broke, so it perhaps not as shiny as it first looked.
And lastly, this is only my opinion, but the chance of one of the big 4 going bust within the next decade is almost non-existent. (Flame on!!)
CBA has been ranked as the most profitable retail bank in the world
profit up by 54%the top 4 Oz banks have been ranked in the top 10 world banking industry
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