From 1 July 2025, if a New Zealand deposit taker fails, the DCS provides depositors with compensation of up to $100,000. Your money is automatically protected if it is in a DCS-covered account.
Check which deposit takers offer DCS-protected deposits.
Read the scenarios below to see how much you could be covered for under the DCS.
Tui would be compensated $3,500 if Bank B were to fail.
Calculation: $3,000 + $500 = $3,500*
Calculation: $10,000 + $5,000 = $15,000*
Meet Rashmi and Aiden
- Rashmi and Aiden have been saving for their retirement and are looking forward to being able to spend more time with their grandkids.
- They have $20,000 in a joint savings account with Building Society B.
- Rashmi also has $550 in a transaction account with Building Society B.
- Aiden has $8,000 in a savings account with Building Society B.
Rashmi
Rashmi would be compensated $10,550 if Building Society B were to fail.
Calculation: $550 + ($20,000/2) = $10,550*
Aiden
Aiden would be compensated $18,000 if Building Society B were to fail.
Calculation: $8,000 + $(20,000/2) = $18,000*
More complex scenarios
- Ahmed has $3,000 in a savings account with Building Society B.
- He is the sole trustee of the Simpson Family Trust, which was created under a trust deed.
- The Simpson Family Trust has $115,000 in a term deposit with Building Society B.
How much is protected?
Ahmed
Ahmed would be personally compensated $3,000 if Building Society B were to fail.*
The Simpson Family Trust
Ahmed, as the sole trustee of the Simpson Family Trust, would also be compensated $100,000 if Building Society B were to fail.
The Simpson Family Trust has $15,000 that is not protected by the DCS in this example. This is because the DCS compensates depositors for up to $100,000 per deposit taker for their protected deposits.
- Maia and Kev have $140,000 in a joint term deposit with Building Society F
- Neither Maia nor Kev have any other accounts with Building Society F
How much is protected?
If Building Society F were to fail:
Maia
Maia would be compensated $70,000
Calculation: $140,000/2 = $70,000*
Kev
Kev would be compensated $70,000
Calculation: $140,000/2 = $70,000*
- Xavier has $15,000 in a savings account at Bank D.
- Lily has $25,000 in a savings account at Bank D.
- Xavier and Lily have $85,000 in a business account at Bank D for the business they jointly own, NZ Imports Ltd.
How much is protected?
Limited liability companies are treated as separate customers by the DCS. If Bank D were to fail:
Xavier
Xavier would be compensated $15,000*
Lily
Lily would be compensated $25,000*
NZ Imports Ltd
Xavier and Lily’s business, NZ Imports Ltd, would be compensated $85,000
- Mikaela has $500 in a transaction account at Building Society E.
- Susan has $1,000 in a transaction account and $5,000 in a savings account at Building Society E.
- Mikaela and Susan jointly hold a joint term deposit of $20,000 at Building Society E.
- Mikaela and Susan are trustees of the ABC Trust, which was created under a trust deed. ABC Trust has $10,000 in a term deposit at Building Society E.
How much is protected?
If Building Society E were to fail:
Mikaela
Mikaela would be compensated $10,500
Calculation: $500 + ($20,000/2) = $10,500*
Susan
Susan’s would be compensated $16,000
Calculation: $1,000 + $5,000 + ($20,000/2) = $16,000*
The ABC Trust
Mikaela and Susan, acting jointly in their capacity as trustees of the ABC Trust, would be compensated $10,000.
Disclaimer
* DCS payments may include accrued interest. For simplicity, the calculations provided in these scenarios exclude accrued interest.
The Reserve Bank of New Zealand – Te Pūtea Matua cannot provide financial advice. We suggest you talk to your financial institution or seek independent advice from a registered financial adviser.
How do I find an adviser? | Financial Markets Authority (fma.govt.nz)