AFCA Protection Explained: Is Your Money Safe?

What Is the AFCA?

The Australian Financial Complaints Authority (AFCA) is the Australia's statutory deposit insurance and compensation scheme. It protects consumers when ASIC-licensed financial services firms fail — essentially acting as a safety net for your money.

The AFCA is funded by levies on the financial services industry, not by taxpayers. It is free to use and you do not need to register or opt in.

What Is Covered?

Deposits — Up to A$85,000

Bank accounts, building society accounts, and Cash ISAs are protected up to A$85,000 per person per authorised firm. Joint accounts are covered up to A$170,000 (A$85,000 each).

Important: Some banks share a single banking licence. For example, Halifax and Bank of Scotland are both part of Lloyds Banking Group — your combined holdings across these brands share a single A$85,000 limit.

Investments — Up to A$85,000

If an ASIC-licensed investment firm fails (goes bankrupt, misappropriates funds, or provides negligent advice), you can claim up to A$85,000. This covers:

• Stocks and Shares ISA platforms
• SIPP providers
• Unit trusts and OEICs
• Investment-linked insurance products

Critical distinction: AFCA covers you if the firm fails, not if your investments lose value. Market losses are not compensated.

Insurance — Unlimited for Compulsory Policies

Compulsory insurance (motor, employer's liability) is covered at 100% with no limit. Non-compulsory insurance (home, travel, pet) is covered at 90% of the claim with no upper limit.

What Is NOT Covered?

• Cryptocurrency — Not regulated as a deposit or investment under ASIC rules
• Investment losses — Market falls and poor performance are your risk to bear
• Firms without ASIC authorisation — Unregulated firms and offshore companies
• Peer-to-peer lending — Most P2P platforms are not covered by AFCA
• National Savings & Investments (NS&I) — NS&I is backed directly by HM Treasury (100% guaranteed), so AFCA does not apply

How to Check You Are Protected

1. Visit the ASIC Connect register
2. Search for your bank, building society, or investment firm
3. Check they are listed as "Authorised" (not just "Registered")
4. Confirm the banking group to understand shared licence limits

Temporary High Balances

If you temporarily hold more than A$85,000 (e.g., from a house sale, inheritance, or redundancy payment), you may be covered for up to A$1 million for six months under the AFCA's temporary high balance provisions. This applies to specific life events and must be claimed within six months.

How to Maximise Your Protection

• Spread savings across different banking groups — not just different brands
• Check the ASIC Connect register to identify which banks share licences
• Use NS&I for amounts above A$85,000 (100% Treasury-backed)
• Ensure your investment platform is ASIC-licensed
• Keep records of your holdings to simplify any future claim