Last checked: 14 September 2026. This guide compares statutory deposit-protection frameworks in Australia, the United Kingdom, Canada and the United States. Eligibility depends on the institution, account ownership and product, so verify the exact account before moving a large balance.
Selling one home before buying another can create an unusual financial moment: for a few days or months, money that normally lives inside a property becomes a very large bank balance.
That creates a problem most everyday savers rarely need to think about. The amount sitting in your bank account can be much larger than the amount protected if that institution fails.
The four countries below all protect eligible bank deposits, but they do not use the same limit — and one of them gives qualifying home-sale proceeds substantially more temporary protection than the others.
The protection limits are not interchangeable
| Country | Standard protection | How the limit is measured | House-sale exception? |
|---|---|---|---|
| Australia | A$250,000 | Per account holder, per authorised deposit-taking institution (ADI) | No additional FCS protection merely because the balance came from a property sale |
| United Kingdom | £120,000 | Per eligible person, per authorised firm | Qualifying temporary high balances can receive protection up to £1.4 million for six months |
| Canada | C$100,000 | Separately for each insured category at each CDIC member institution | No general home-sale temporary-high-balance regime comparable with the UK rule |
| United States | US$250,000 | Per depositor, per FDIC-insured bank, per ownership category | No general home-sale temporary-high-balance category |
The headline number is only the first step. A second account with the same banking licence may not create a second limit, while a genuinely different institution or ownership category can change the result.
Australia: A$250,000 per account holder per ADI — and the brand name can mislead you
Australia’s Financial Claims Scheme (FCS) protects eligible deposits up to A$250,000 per account holder per authorised deposit-taking institution. APRA says the limit applies to the total of the account holder’s protected deposits with that ADI.
The important word is ADI, not brand. APRA specifically warns that one licensed ADI can operate several banking brands. BankWest, for example, is part of Commonwealth Bank, while St.George operates under Westpac’s banking licence. Accounts that look like they belong to different brands can therefore be aggregated under one FCS limit.
The FCS covers a range of Australian-dollar deposit accounts, but APRA states that deposit accounts holding funds in foreign currencies are not covered.
Official guidance: APRA — Financial Claims Scheme for banks, building societies and credit unions and APRA — banking institutions and shared licences.
The Better Places A$600,000 parking test
Assume one person sells a property and temporarily holds A$600,000 in eligible Australian-dollar deposits in their own name at one ADI. Ignore accrued interest for simplicity.
A$600,000 balance − A$250,000 FCS limit = A$350,000 above the FCS protection limit.
That does not mean A$350,000 automatically disappears if a bank fails; amounts above the protected limit may be claims in a subsequent liquidation. It means the FCS itself does not provide the same statutory protection to that excess.
And Australia does not increase the A$250,000 FCS limit simply because the money is temporarily large after a property sale. APRA explicitly says the limit applies irrespective of the source, purpose or intended holding period of the funds.
UK: the ordinary £120,000 limit has a major temporary exception
The UK’s Financial Services Compensation Scheme increased its standard deposit protection limit from £85,000 to £120,000 per eligible person, per authorised firm on 1 December 2025.
But the UK has an important rule for people temporarily holding large amounts after certain major life events. FSCS can protect a qualifying temporary high balance up to £1.4 million for six months.
A qualifying event can include selling a main residence. FSCS states that the property must relate to the person’s main residence; a second-home sale does not qualify for this particular protection. The six-month clock begins when the funds become legally transferable to the person or are first credited, depending on the circumstances. Moving the money does not restart the six-month period.
Official guidance: FSCS — deposit protection limit and FSCS — temporary high balances.
Why this changes a moving timeline
Suppose a homeowner sells a qualifying UK main residence and intends to use the proceeds for a home in another country. The relevant planning deadline is no longer just the foreign purchase settlement date. The six-month temporary-high-balance window becomes another clock on the relocation plan.
If the overseas purchase is delayed, the owner should not assume the enhanced protection continues indefinitely.
Canada: C$100,000, but categories matter
Canada Deposit Insurance Corporation (CDIC) insures eligible deposits at member institutions. CDIC states that each insured category is protected separately up to C$100,000, including principal and interest.
Categories include deposits held in one name, joint deposits, deposits held in an RRSP, RRIF and other specified categories. A person can therefore have more than C$100,000 of total CDIC protection when eligible deposits are legitimately held in different insured categories or at different member institutions.
But simply opening several ordinary accounts in the same category at the same member institution does not multiply the category limit.
Official guidance: CDIC — what deposit insurance covers.
United States: US$250,000 per depositor, bank and ownership category
FDIC deposit insurance covers eligible deposits up to US$250,000 per depositor, per FDIC-insured bank, for each account ownership category.
This three-part formula matters. Multiple checking, savings or CD accounts held by the same person in the same ownership category at the same insured bank are aggregated. But qualifying deposits in different ownership categories — for example, a single account and a properly structured joint account — can receive separate coverage.
The FDIC also makes clear that branches of the same insured bank do not create separate insurance limits.
Official guidance: FDIC — Understanding Deposit Insurance.
The Better Places Large-Balance Parking Test
Before a property settlement or international move turns a normal account into a six-figure or seven-figure cash balance, run five checks.
- Institution test: Is the institution actually covered by the country’s deposit-protection scheme?
- Licence test: Are apparently different bank brands really operating under the same licence or institution?
- Ownership test: Is the money held individually, jointly, through a trust, company or another recognised ownership category?
- Currency/product test: Is the particular deposit product and currency eligible for protection?
- Temporary-balance test: Does the jurisdiction provide special protection because the balance arose from a qualifying life event, and when does that protection expire?
Only after those five answers are known does it make sense to calculate how much of the balance sits inside or outside the applicable statutory limit.
Do not confuse bank-failure protection with every other cash risk
Deposit insurance is designed for failure of a covered institution. It does not make a large international transfer risk-free.
A person moving house across borders can separately face foreign-exchange movements, transfer delays, fraud or payment-redirection scams, destination-country account restrictions and settlement timing problems. Those risks need different controls.
Likewise, deposit protection is not the same question as tax withheld when a nonresident sells a property. Our guide to selling property after moving abroad explains how settlement cash can be reduced by withholding and reporting rules before the proceeds even reach the bank.
A practical cross-border scenario
Imagine a household sells its old home, rents for four months, then buys abroad. The sale proceeds will sit in cash while the family waits for visas, searches for a property and coordinates settlement.
The wrong approach is to ask only, “Which savings account pays the highest interest?”
The better sequence is:
- estimate the maximum cash balance between the two property settlements;
- identify who legally owns that cash;
- map every bank brand to the underlying protected institution;
- calculate statutory protection under the correct ownership category;
- check any temporary-high-balance deadline;
- only then compare interest rates, access and transfer costs.
A small difference in interest is useful. Knowing that two bank brands share one licence, or that a temporary protection window expires before the next settlement, can be much more important.
The decision rule
Large balances created by a move should be treated as a temporary financial structure, not as an oversized version of an everyday savings account.
Before the property settles, write down three numbers: the maximum cash you expect to hold, the statutory protection available under the actual account structure, and the number of days the balance may remain there.
If those three numbers do not fit comfortably together, resolve the structure before settlement rather than after the money arrives.
Official sources
- APRA: Financial Claims Scheme
- APRA: Different banking businesses under a banking licence
- APRA: Types of accounts covered by the FCS
- FSCS: Deposit protection limit
- FSCS: Temporary high balances
- CDIC: What’s covered
- FDIC: Understanding Deposit Insurance
Method and limitations: official APRA, FSCS, CDIC and FDIC material was checked on 14 September 2026. The A$600,000 example and Large-Balance Parking Test are original Better Places analysis. This article explains deposit-protection frameworks, not personalised banking, investment, tax or legal advice.
Featured photograph by Maria Ziegler on Unsplash.
Leave a Reply