Can You Have Term Deposits at Multiple Banks? How Financial Claims Scheme Coverage Works

If you're sitting on $100,000 or more in cash, a natural question comes up: should it all go into one term deposit at one bank, or split across several? The answer usually comes down to the Financial Claims Scheme (FCS) — and understanding how it actually works changes how you should structure your savings.

What the Financial Claims Scheme covers

The FCS protects deposits up to $250,000 per account holder, per authorised deposit-taking institution (ADI). That cap applies per account holder, per ADI — not per account. If you hold a $150,000 term deposit and a $150,000 savings account at the same bank, the combined $300,000 balance is only protected up to $250,000. The extra $50,000 carries no government-backed protection at that institution. (For a fuller look at what the scheme covers and how it works, see our guide on whether term deposits are safe.)

This is why term deposits above roughly $250,000 are usually better split across separate banks rather than concentrated in one, if protecting the full balance under the scheme matters to you.

Same banking group, different ADI — or not

Here's where it gets less obvious. Many well-known banking brands in Australia are owned by a larger parent group, but that doesn't automatically mean they share one FCS cap. Some subsidiary brands hold their own separate ADI licence, in which case deposits with that brand get their own $250,000 cap, independent of the parent bank. Others operate under the parent's licence, in which case deposits are pooled with the parent for FCS purposes and only one $250,000 cap applies across both. A recent real case: Bank Australia and Qudos Bank merged on 1 July 2025, and deposits held at both are now treated as a single combined balance under the FCS. A saver who previously held $250,000 at each — two separate caps, $500,000 protected in total — now has just one $250,000 cap across the combined balance.

A worked example: say you have $400,000 in cash. Splitting it into two $200,000 term deposits at two genuinely separate ADIs keeps the full $400,000 within FCS protection, since neither deposit exceeds the $250,000 cap at its institution. Put the same $400,000 into one term deposit — or into two brands that turn out to share a single ADI licence — and only $250,000 of it is protected, with the remaining $150,000 uninsured under the scheme.

Because these arrangements can and do change, don't assume based on branding alone. Before treating two brands as separate FCS coverage, check APRA's Financial Claims Scheme page, or ask the bank directly which ADI licence your account sits under. It takes five minutes and avoids a costly assumption.

Why spreading term deposits across banks makes sense beyond the FCS cap

Even below the $250,000 threshold, there are reasons to hold term deposits at more than one bank:

• Rate competition — the best rate for a given term changes between banks regularly. Splitting funds across two or three lenders lets you capture strong rates from more than one at a time, rather than betting everything on whichever bank happens to be leading today.
• Laddering flexibility — if you're already laddering terms (see our guide on how to ladder term deposits), running that ladder across a couple of banks adds a layer of diversification on top of the maturity-date spread.
• Liquidity events — if you ever need to break a term deposit early, having funds split across institutions means you're only exposed to one bank's early withdrawal terms at a time, not your entire balance.

The trade-off: more accounts to manage

Splitting savings across banks isn't free of friction. Each new bank means a new login, a new set of statements, and in some cases new identity verification during account opening. For balances comfortably under $250,000 where FCS protection already covers the full amount at one bank, the case for splitting rests purely on chasing better rates — a real but smaller benefit than the FCS-driven case for larger balances.

A practical rule of thumb

If your total cash savings sit under $250,000, one bank can fully protect the balance under the FCS — the decision to split is then just about rate optimisation. Above $250,000, splitting into blocks of roughly $250,000 or less per ADI keeps the entire amount within the scheme's protection, assuming each institution is a genuinely separate ADI.

It's also worth remembering that FCS protection is about safeguarding your principal if an ADI fails — it isn't a reason to ignore rates. A conservative saver still wants the best available rate at each institution they choose; the FCS cap simply sets an upper bound on how much to place at any single one. Treat “which banks” and “how much at each” as two separate decisions: pick banks based on competitive rates and terms first, then size each deposit against the $250,000 cap.

This is general information, not financial advice. FCS rules and ADI structures can change, so confirm current details with APRA or the institution before making a decision.

One thing you can do right now: compare current term deposit rates across authorised banks on our lenders page, and check each institution's ADI status before deciding how to split a balance above $250,000.