Is your money safest in a bank or at home? (Australia’s rules explained)

In Australia, your money is safest in a bank, not at home.

Deposits held with any authorised Australian Deposit‑taking Institution (ADI) are protected by the Financial Claims Scheme, which guarantees up to $250,000 per account holder, per ADI.

If the scheme is activated, APRA aims to pay protected funds within 7 days.

Keeping your money in a bank vs at home

With scams and cyber-crimes on the rise and fears around the impacts of inflation, you may be wondering whether your money is kept safer in a bank or as cold, hard cash in the confines of your home.

Banking your money offers the overall safest and most beneficial option for both protecting and growing your savings.

You could meet your savings goals faster, monitor your financial activity, and have the comfort of safeguarding your finances under the Australian Government Financial Claims Scheme.

Read on to find out more:

Pros and cons: Cash at home vs money in the bank

Keeping your money safe

While keeping a small amount of cash at home could have its advantages, there are risks involved in doing so, particularly if it's a large amount.

With online scams leading to millions of dollars in financial losses annually  it may be worth paying attention to how well a bank invests in their security and fraud protection, including security practices, privacy measures, and their process for treating fraudulent and unauthorised banking activity.

Most banks (including Qudos Bank) offer a wide range of safeguards to help keep your personal details and finances safe. These include:

• real-time transaction alerts,
• cyber security practices such as firewalls
• automatic time-outs and access codes for extra layers of protection.
• last log-in checks - allows you to check the most recent session each time you use Online Banking to ensure that nothing is out of the ordinary.
• Advanced technology such as data encryption – this is the process of scrambling information using random mathematical algorithms ensuring that only we can receive this information in an understandable format
• codeblocks - this involves locking access to online banking after three failed attempts.
• 24/7 card monitoring – Qudos Bank partners with leading financial crimes service to monitor suspicious card transactions 24/7 to proactively limit unauthorised transactions

About Australia’s deposit guarantee (FCS)

• Covers deposits up to $250,000 per account holder, per ADI (bank/credit union/building society).
• Applies to AUD transaction, savings, term deposits and separate mortgage offset accounts.
• If activated, APRA aims to pay most protected deposits within 7 days.
• Some banks share a single banking licence across multiple brands, your coverage is measured against the one ADI.
• Important for Qudos customers: From 1 July 2025 (or another APRA‑approved date), the Bank Australia and Qudos Bank merger means deposits across both banks will be treated as one combined balance under the FCS (one $250,000 cap in total).

In the case of mistaken, fraudulent, or unauthorised transactions from your bank account (subject to a banks' Conditions of Use and ASIC's ePayments Code), recovering your lost finances may be possible by reporting such incidents to your bank.

On the other hand, if you have your physical cash stolen it may be harder (and at times, impossible) to report and recover as it leaves no digital trail for further investigation. Only small amounts of money may be covered under your homeowners or renters' insurance. Storing cash at home also leaves it vulnerable to physical deterioration through mould and rotting, and accidental damage. If you live in areas prone to natural disasters such as flooding or bushfires, your savings are at further risk to such misfortunes.

Be protected by Australia's Financial Claims Scheme

When choosing a bank to deposit your money, you should ensure the institution is covered by the Australian Government Financial Claims Scheme (FCS). 

The FCS provides financial protection for consumers, including individuals or entities such as a trust or company, in the unlikely event of a failure of a bank, credit union, building society or general insurer.^[4].

Depositors of banks, building societies, credit unions, and other Authorised Deposit-taking Iinstitutions (ADIs) that are incorporated in Australia are protected for deposits up to $250,000 per account holder per ADI^.  The scheme aims to return deposits to account holders within seven days of activation of the FCS.

This protection spans across a wide range of account types, including savings accounts, transaction accounts, mortgage offset accounts, retirement savings accounts, and term deposits. The Australian Prudential Regulation Authority (APRA) provides a list of all Authorised Deposit-taking Institution (ADI), and their trading names covered by the scheme.

Qudos Bank is proud to be protected by the Australian Government FCS, so our customers can rest assure that their money is safe with us in the unlikely event of a bank failure.

Find out more about the Australian Government Financial Claims Scheme on our webpage. 

Reap the rewards for saving

By keeping your money locked at home, you may lose the opportunity of growing your savings through bank interest rates paid. With inflation rates on the rise (sitting at 7.8%p.a. since Q4 of 2022), over the years your physical savings stored at home would have likely lost much of their valuable purchasing power.

A bank savings account with a high interest rate per annum could help you reach your financial goals faster by earning a consistent return as time goes on (provided you meet any applicable conditions). Additionally, your savings are more accessible through online banking options and transaction cards, whenever and wherever you are.

At Qudos Bank, we have a range of award-winning savings and term deposit accounts to suit all your needs. Best of all, there are no account keeping fees on any of our savings accounts.

Learn more about our award winning range of saving and investment accounts on the Savings Accounts webpage.

So, before you decide to keep large amounts of cash at home, consider the drawbacks of leaving this money under the mattress vs. in a high yielding and secure savings account at a bank.