The Australian Government has passed legislation to guarantee deposits of eligible authorised deposit-taking institutions (ADI) including Australian banks, building societies, credit unions and Australian subsidiaries of foreign-owned banks.

The Australian Government introduced the guarantee in October 2008 to match moves by international governments and keep Australia's financial services system competitive.

A new, permanent cap will be introduced from 1 February 2012 of $250,000 per depositor in any one bank and replaces the emergency $1,000,000 cap established in October 2008.

A new, permanent cap will be introduced from 1 February 2012 of $250,000 per depositor in any one bank and replaces the emergency $1,000,000 cap established in October 2008.

Yes. As UBank is a division of National Australia Bank, this guarantee applies to UBank.

The Reserve Bank of Australia (RBA) will administer the guarantees as agent for the Commonwealth. The RBA will perform administrative tasks, including processing applications from institutions for coverage of liabilities and collecting fees.

NAB is a very secure, profitable organisation operating under strict regulatory and operational controls to ensure the safety of customer's funds.

The limit applies per customer per institution. That is, the limit applies to the combined total amount of funds you have with both NAB and UBank.

For example, you may have a transaction account with NAB of $10,000; as well as a $150,000 UBank Term Deposit. That would make your total deposit balance with our institution $160,000. The total amount of $160,000 will be guaranteed under the Government's Financial Claims Scheme.

For customers who have an existing Term Deposit as of 10 September 2011, they will continue to be covered at the current cap of $1,000,000 per depositor per institution until 31 December 2012, or until the Term Deposit matures, whichever occurs sooner.

If such a Term Deposit matures before 1 February 2012 and is rolled over, then the new $250,000 cap will apply from 1 February 2012. If such a Term Deposit matures after 1 February 2012 and is rolled over, then the new $250,000 cap will apply from the rollover date.

Term Deposits opened after 10 September 2011 will be covered at $1,000,000 per depositor per institution until 31 January 2012, and then the new $250,000 cap will apply from 1 February 2012.

UBank is a division of National Australia Bank and operates under NAB's banking license (AFSL 230686).

NAB is an authorised deposit-taking institution (ADIs) incorporated in Australia and therefore is covered by the Government guarantee. And UBank is automatically covered under NAB's license.