Securing your future

Police Credit is committed to ensuring the security of members' money. Like the major banks, we are regulated by the Australian Prudential Regulation Authority (APRA).

Our prudent financial management means that we offer a safe haven for our members’ funds. Our credit quality is exceptional and we have no exposure to sub-prime debt or overseas investments. We are also well capitalised, liquid and profitable.

As always, our members are our priority and our focus is on helping you to achieve a more secure financial future.

Member update: Government guarantee for deposits

About the Australian Government deposit guarantee
On 12 October 2008, the Prime Minister announced a guarantee scheme for all deposits held in credit unions, building societies and banks in Australia.

The guarantee will apply for at least three years, (commencing 12 October 2008) until 12 October 2011.

Fees apply for accounts over $1 million
Under this scheme, combined balances of up to $1 million (per account holder) held in PC savings accounts are guaranteed by the Australian Government free of charge. However, combined balances above $1 million are not guaranteed.

If you have more than $1 million deposited with Police Credit, you can choose to take up a government guarantee on your deposits for a fee. The cost is 1.5%pa on your nominated PC balances above $1 million. This amount will be debited from an account nominated by you every month that the guarantee is in place.

The fee is calculated on funds over $1 million on a daily basis. For example, if the excess was $200,000 for five days, the fee would be $200,000 * 1.5% * 5 ÷ 365 = $41.10. This fee is charged because financial institutions must pay a fee to guarantee deposits in excess of $1 million.

Example: Balance of $1.5 million
If a PC account holder has several accounts with a total balance of $1.5 million, the first $1 million will be guaranteed by the government for free until 12 October 2011. The remaining $500,000 will not be guaranteed unless the account holder opts in to the government guarantee and pays a fee.

Example: Balance of $700,000
If a PC account holder has two accounts with a combined balance of $700,000, the whole amount is guaranteed free of charge by the government until 12 October 2011.

Example: Joint account balance of $2 million
In respect to joint accounts, the balance of the accounts is split proportionally between the joint account holders.  For example if a PC joint account has a balance of $2 million, the whole balance is covered by the government guarantee, as ownership of the funds is split equally between each account holder (ie $1 million per PC account holder).

For more information visit:
www.apra.gov.au/guarantee-of-deposits.cfm or www.treasury.gov.au 

 Download application form

Your Security

Police Credit has operated as a credit union since December 1974 and is committed to ensuring the safety and security of its members’ funds. We have a long history of profitable trading resulting from prudent management practices.  Police Credit’s capital position is very strong as is our credit quality. There is no exposure to sub-prime debt or overseas investments.  Like other Australian owned financial institutions we are regulated by the Australian Prudential Regulation Authority.

For more information, see the following articles:

 Credit unions and mutual building societies: growing from strength to strength
 Credit unions, building societies have no exposure to toxic US loans

FAQs

1. Is the Australian Government deposit guarantee free?
Combined PC account balances equal to or less than $1 million are covered by the government guarantee at no charge. But if your combined account balances total more than $1 million you can opt in to the government guarantee and pay a fee.

2. Do I have to have my deposits over $1 million guaranteed?
A. No, the guarantee is optional. And you can choose to include part or all of your eligible deposits under the guarantee.

3. What if I have multiple accounts at different financial institutions?
A. Each legal entity (such as a person, partnership or trust) can have up to $1 million of deposit funds guaranteed free of charge with each authorised deposit-taking institution. For example, you could have $1 million with Police Credit and $1 million with Westpac, and still be under the $1 million fee-free threshold. 

4. My total PC deposits are over $1 million. How do I apply to guarantee the balance over $1 million?
You can download and complete the PC Government guarantee of deposits application form, and take it to a PC branch or mail to Police Credit, PO Box 669, Carlton South Victoria 3053. We will contact you for verification once the application process has been completed.

5. My total deposits with Police Credit are less than $1 million. Do I need to let you know?
No, all deposits up to and including $1 million are covered without charge. You don’t need to contact us.

6. What are the costs involved if I have over $1 million?
The government bases the cost of the guarantee for deposits over $1 million on our credit rating. For Police Credit, the fee for deposits over $1 million is currently 1.5%pa.
The fee is calculated on the excess over $1 million on a daily basis. For example, if the excess was $200,000 for five days, the fee would be $200,000 * 1.5% * 5 ÷ 365 = $41.10.
The fee is calculated on the average credit balance in excess of $1 million in your nominated accounts. This fee will be debited from an account you nominate on a monthly basis, in arrears. Police Credit receives no financial benefit from this fee.

7. What happens if I don’t pay the monthly fee?
Failure to pay the monthly fee, and/or if the fee payment is dishonoured, means that your guarantee may be invalidated.

8. Is the fee tax deductible?
The fee may be tax deductible and you should seek professional advice on claiming any fees paid for the guarantee.

9. How long is the guarantee available?
The guarantee is currently available until 12 October 2011. The guarantee for your nominated accounts over $1 million is in place until you request in writing that Police Credit remove your account/s from the guarantee.

10. What is a legal entity?
Under the scheme, a legal entity can be:

- individual (includes sole traders)

- company

- trust, including a superannuation fund

- partnership

- incorporated association

- unincorporated association

- registered cooperative

- government entity

and any other entity as defined in s960.100 of the Income Tax Assessment Act 1997.

11. Can I add accounts to the government guarantee at any time?
Yes. You can amend your guarantee, and nominate additional accounts via the Government guarantee of deposits application form.
Complete and take the application form to a PC branch or mail to Police Credit, PO Box 669, Carlton South Victoria 3053. We will contact you for verification once the application process has been completed.

12. Can I remove accounts from the government guarantee at any time?
Yes, you can remove accounts from the guarantee by advising Police Credit in writing. Send a letter, stating which accounts you wish to remove, to Police Credit, PO Box 669, Carlton South Victoria 3053. We will contact you for verification.

13. I have a joint account. Are both of us covered if only I elect to take up the government guarantee?
If you have a joint account, you both need to apply for the government guarantee. You will be covered for the first $1 million of your individual total deposits and an equal share of your PC joint deposits.
For example, if you have $3 million in a joint account, you are both automatically guaranteed for $1 million each. The remaining $1 million is split equally between you. This means that you may wish choose to cover your $500,000 with a government guarantee. The fee would be based only on your $500,000. It is up to your account partner to choose to guarantee their $500,000.

14. If I have $1 million in a PC account in my name and $700,000 in a joint account with my partner, how much am I guaranteed?
You are automatically covered for the $1 million in your own name under the guarantee and there is no cost for this.  The $700,000 is divided equally so you would require a government guarantee for your share of that account – that is, $350,000.

15. I have $1 million in a PC account in my name and $700,000 in a joint account with my partner. Is my partner covered?
To be covered, your partner would need to apply in their own name and their own circumstances. If, using the above example, your partner had no other PC deposits, they would be automatically covered for the $350,000 (equal share of the $700,000) under the scheme at no cost. If your partner had other PC accounts totalling more than $1 million and they wanted the guarantee, they would need to apply for the guarantee in their own name.

16. Is there a limit on the amount of the government guarantee for accounts over $1 million?
No. There is no limit to the dollar amount of the government guarantee on accounts of over $1 million, as long as the fee is paid.

17. If my government guaranteed account is over $1 million for a few days of the month and then falls below $1 million for the remaining days in the month, how much will the fee be?
The fee is only payable for the time the total account balances exceed $1 million For example, if the balance was $1,100,000 for three days then fell below $1 million, the fee is only payable for three days of that month. In this example, the fee would be $12.33.

18. Which PC deposit products are covered by the guarantee?
All PC deposit products are covered under the guarantee.

19. Where can I find more about the Australian Government deposit guarantee scheme?
You can find out more about the scheme at www.treasury.gov.au and www.guaranteescheme.gov.au