Cooking the Books with Frances Cook - Guest: Daniel McGrath
4 September 2023
Reading time: 5 min
Can you trust the bank to protect your savings? The incoming Deposit Compensation Scheme is designed to protect New Zealand depositors.
When it comes to managing our finances, the topic of risk is never far behind. For many of us, a savings account has traditionally been a symbol of financial security and stability. However, until recently, New Zealanders had surprisingly limited legal protections when it came to safeguarding their hard-earned money.
In fact, New Zealand was one of just two countries in the OECD (Organisation for Economic Co-operation and Development) that lacked any form of government-backed protection in the event of a bank failure. The other country in this category was Israel. This meant that, in the unfortunate event of a banking crisis, your life savings could be at risk, even if you believed they were securely tucked away.
But before you start to panic, there's good news.
The Deposit Takers Act, a significant piece of legislation, has recently passed in Parliament, marking a turning point in the financial security landscape of New Zealand. This new law now guarantees protection for your savings, up to a maximum of $100,000, in the event that your bank faces insurmountable challenges.
While this development is undoubtedly a step in the right direction, it's essential to understand the finer details and explore how you can use this newfound financial protection to your advantage.
Listen to 'Cooking the Books' with Frances Cook and her guest, our very own CEO, Daniel McGrath now to learn more abut how the incoming deposit framework in New Zealand will protect your savings.