Are your savings safe?
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The collapse overnight of financing group Banksia Securities could see investors lose $660 million dollars. This serves as a timely reminder to check if your savings are safe.
Debenture firms, of which Banksia is an example, offer investors high interest returns on debentures. The funds raised are then loaned to others as mortgages or loans on commercial properties, just as a bank would. However, as such companies do not hold a banking licence, the funds are not underwritten by the Government’s deposit guarantee. So if the loans turn bad, investors may lose all their money.
If you are concerned about any investments you may hold, you should contact your financial institution for clarification.
To find out more about the different types of financial institutions and the regulators to which they report, visit RBA.gov.au
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