Your savings are now safer
As of 1 July 2025, a major change is now in place to help protect your money: the Depositor Compensation Scheme( DCS), now in effect across New Zealand.
In simple terms, this means that if you have money in the bank – whether it’ s in a savings account, term deposit, or everyday transaction account – you’ re now automatically covered for up to $ 100,000 per person, per institution if that bank or finance company were to fail.
WHY IT MATTERS
For most homeowners, a mortgage is likely your biggest financial commitment. Alongside that, many of us keep money in the bank, as a rainy day fund, savings for renovations, or an emergency buffer.
The DCS gives savers more peace of mind that if something unexpected happens to the bank( e. g., the Global Financial Crisis of 2008 / 09), savings will be protected.
Finance Minister Nicola Willis put it simply:“ People work hard for their savings. They deserve to know their money will be safe if the worst happens.”
New Zealand has been one of the few developed countries without a deposit guarantee scheme. The introduction of the DCS brings us in line with international standards and adds an essential layer of security to the financial system.
WHAT’ S COVERED, WHAT’ S NOT
If you’ ve got money in a licensed bank, credit union, building society or finance company in New Zealand, it’ s now covered to the tune of $ 100,000 per person, per institution. That means if you have accounts at two different banks, you’ re covered for $ 100,000 at each one.
The coverage applies to most everyday accounts, including:
• Transaction accounts
• Savings accounts
• Term deposits
• Notice saver accounts
It also applies to individuals, joint accounts, businesses, trusts, and even children( as long as the account is in their name).
For joint accounts, the cover is split equally. So, if a couple has $ 200,000 in a joint term deposit, each is covered for $ 100,000.
There are, however, a few things the scheme doesn’ t cover:
• KiwiSaver
• Managed funds
• Shares and bonds
• Foreign currency accounts
• Losses from fraud or scams
It’ s still important to stay vigilant about online security and avoid giving out personal banking details.
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