Treasury provides further details on the wholesale funding and deposit guarantees

Treasury has updated its guidance on the Deposit and Wholesale Funding Guarantees Design and Operational Parameters and provided a list of Eligible Accounts and Institutions.

The changes to the operational details include the following clarification:

  • For deposits of or under $1 million, the guarantee will be free.
    For deposits over $1 million an eligible institution will be able to
    obtain coverage, in return for a fee. For example, if a person holds
    $1.5 million in deposit accounts in an ADI, the first $1 million would
    be guaranteed for free and a fee would be payable to obtain the
    guarantee for the remaining $500,000.
  • The threshold applies per depositor per institution. That is, the
    threshold applies to the total amount of funds held by a depositor in
    (separate) deposit accounts with an ADI.
  • The fees will be levied on a monthly or quarterly basis depending on the liability.
  • The fee scale is on a per annum rate.
  • After 28 November 2008, deposits over the $1 million threshold and
    wholesale funding will only be guaranteed if an application has been
    made to the RBA and the relevant fee has been paid.
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