Wow, that is really awful. A salient reminder that the adage about not putting all your eggs into one basket applies to bank deposits as well as things that are more obviously classed as "investments".
Reminders to keep my PI plan focused
- Thread starter bespoke
- Start date
Yes.. I really dont know how they kept going. I cant imagine how I'd feel in that situation. I bet they are not the only ones though. I think the only thing that kept them going was the fact that they were coming here.
Its made me realise I have to have my investments spread around a bit more.
I've been thinking alot about their situation lately as it does directly affect us (with us having to help them out) and I have been wondering about this senario.
If you had a mortgage of say 200K and had 200K in an offset account and the bank went bust (OK I know Aussie banks are quite safe) would iit be considered an even balance ie $0 owed or would you lose the 200k and still be considered to owe the full amount on the mortgage?
Would it be the same as when businesses go broke and they have creditors and debitors, all debitors are expected to pay up but creditors only get a percentage (if anything) of their amount?
Does anyone know ?
Its made me realise I have to have my investments spread around a bit more.
I've been thinking alot about their situation lately as it does directly affect us (with us having to help them out) and I have been wondering about this senario.
If you had a mortgage of say 200K and had 200K in an offset account and the bank went bust (OK I know Aussie banks are quite safe) would iit be considered an even balance ie $0 owed or would you lose the 200k and still be considered to owe the full amount on the mortgage?
Would it be the same as when businesses go broke and they have creditors and debitors, all debitors are expected to pay up but creditors only get a percentage (if anything) of their amount?
Does anyone know ?
I'm pretty sure it'd be the latter.
Your offset account would be treated the same as all other deposits, ie part of the bank's assets, and you'd get back a percentage, the same as all the other unsecured creditors.
But as you say, you'd almost certainly still be considered to owe the $200K.
Ouch.
aren't bank deposits insured though?
Well, yes I think so , but what was all the who ha last year about the PM having to come out to state that the government would guarentee all deposits?
I don't know..................................................
It would have to be a pretty catastropic financial colapse for that to happen hear I would think.
I'm pretty sure it'd be the latter.
Your offset account would be treated the same as all other deposits, ie part of the bank's assets, and you'd get back a percentage, the same as all the other unsecured creditors.
But as you say, you'd almost certainly still be considered to owe the $200K.
Ouch.
Ozperp, how about the redraw? I really want to know these because you never know what could happen these days?
Nah, pretty sure "extra" funds in the actual loan account would simply count as a reduced balance owing, they'd be treated differently to funds sitting in a separate offset account.
Having said that, on further reflection, I would think that the Australian Government's deposit guarantee would protect balances in offset accounts, up to $1M per institution.
But hey, I'm not an expert on any of this, just a "moderately well-informed and curious amateur". And I sure don't have any significant lazy cash to worry about! (What a worry to have...
)
What is going on? Then I noticed 2 things.
1. Most of the people walking around were of retirement age probably 70%.
2. There was a huge line up for the teller at EVERY bank and building society in the centre, snaking through the bank premises and out on to the footpath.
Then it dawned on me... it was pension day.
I thought to myself..Why would elderly people some of whom had mobility issues want to come out into this mad rush and line up for ages at the bank, supermarket etc? It was as busy as the week before Christmas. Why not wait till the next day or the following Monday?
Thank god, thank god, thank god.
I have always thought this, and assumed it was just me being a nasty not-so-old pr.i.ck.
It's obvious; just go to the shops the day AFTER the pension comes out, or the day BEFORE.
But sadly; they can't. Why? Because they are broke by pension day I'd say.
Another thing; they all line up at the Banks and the Post Office to pay their bills etc. Why? Because they can't afford a computer, and most times don't know how to use one.
Old people become very, very anti-technology for some reason.
Nah, pretty sure "extra" funds in the actual loan account would simply count as a reduced balance owing, they'd be treated differently to funds sitting in a separate offset account.
Having said that, on further reflection, I would think that the Australian Government's deposit guarantee would protect balances in offset accounts, up to $1M per institution.
But hey, I'm not an expert on any of this, just a "moderately well-informed and curious amateur". And I sure don't have any significant lazy cash to worry about! (What a worry to have...
Thanks. I sold most of my IPs and put money in the mortgage account (my own house). I have rung the banks they could not tell me the answer if the banks go bust. I am thinking whether to put all my money in the share market rather than in the redraw or offset.
I'm pretty sure it'd be the latter.
Your offset account would be treated the same as all other deposits, ie part of the bank's assets, and you'd get back a percentage, the same as all the other unsecured creditors.
But as you say, you'd almost certainly still be considered to owe the $200K.
Ouch.
I checked with the authority. You were wrong.
^^ did ya' get it in writing? Verbal assurance wouldn't be worth too much I shouldn't think...