Kiwis' Hard-Earned Money Safer
New rules taking effect today will provide greater protection for Kiwis' money in the unlikely event of a bank collapse, Finance Minister Nicola Willis says.
From today, deposits at banks, building societies, credit unions and finance companies are insured up to $100,000 per person, per institution.
The change comes from the launch of the Depositor Compensation Scheme (DCS).
'The implementation of this scheme should give New Zealanders extra peace of mind that if something were to go wrong at the institution where they have entrusted their money, they will get their money back.
'It has the additional benefit of promoting better competition by providing smaller deposit takers the ability to compete on a level playing field.
'Sometimes a smaller deposit taker can provide a more competitive deal, but the consumer's confidence is undermined by that organisation's exposure to risk. This scheme helps overcome that issue, promoting better competition, and therefore better deals for Kiwis.'
The introduction of the scheme, which is funded by deposit takers and administered by the Reserve Bank, brings New Zealand in line with internation peers, such as Australia and the United Kingdom.
Under the DCS, each depositor is protected up to $100,000 per deposit taker. That means that in the unlikely event of a deposit taker collapse, people who have put their money in eligible accounts will get back up to $100,000 per person.
The DCS covers money held in standard banking products, including transaction, savings, notice and term deposit accounts.
The change is automatic and depositors do not have to do anything to be covered, but it is recommended people check with their deposit taker – be it a bank or something else – to see what is protected by the scheme.
Note:
For more information on the Depositor Compensation Scheme, including what it covers, and which banks and non-bank deposit takers provide DCS-protected deposits go here.
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