The Depositor Compensation Scheme (DCS) will protect your money if a bank, building society, credit union or finance company fails.
Covers each eligible depositor up to $100,000 per deposit taker in the event of a failure, when money is held in DCS-protected accounts.
Deposit takers are also known as banks, building societies, credit unions and finance companies that take retail deposits.
These deposits must be held with a New Zealand registered or licensed bank, building society, credit union or finance company that takes retail deposits.
Speak to your deposit taker if you are unsure whether your money will be protected by the DCS.
Rachel has $75,000 in a current account and $50,000 in a term deposit at a deposit taker. If the deposit taker fails, Rachel receives the maximum $100,000 of cover from the DCS. Rachel may get more money back if the deposit taker is liquidated or sold.
Joe has $75,000 in a current account with Bank A and $150,000 in a savings account with Bank B. If Bank A fails, Joe will be covered for the full $75,000. If Bank B fails, Joe would be compensated the maximum cover of $100,000. In the event that both banks fail, Joe would be covered $175,000 (up to $100,000 per deposit taker).
Olivia and Mike have $200,000 in a joint account. They have no other account with that deposit taker. Each customer is covered for $100,000 from the DCS.
Ari has a savings account with an overseas deposit taker (not registered or licensed in New Zealand). New Zealand's DCS only covers deposits in New Zealand dollars placed with a deposit taker registered or licensed in New Zealand. Ari is not covered by the DCS if the overseas deposit taker fails.
Marama has $50,000 placed with a deposit taker. She is also a trustee of a family trust which has $100,000 placed with the same deposit taker. If the deposit taker fails, Marama is covered for $50,000, and the family trust is also eligible for $100,000.
We will work to process DCS payments as quickly as we are able to, but it could take some time, especially for more complex cases. It will take us time to process data that we receive from a failed deposit taker, and we want to make sure we pay all eligible depositors the correct amount they are entitled to.
The Reserve Bank of New Zealand – Te Pūtea Matua protects and promotes financial system stability so that it can withstand shocks to our economy and provide the financial products and services we rely on. Our financial system is one of the world’s most trusted and secure. As kaitiaki of the financial system, we set the rules that guide deposit takers on their soundness. We also monitor and sanction deposit takers if they put their customers and the wider financial system at risk.
We are working with deposit takers to develop regulations and standards they will need to follow. Deposit takers are providing useful feedback on how the DCS will work in practice for their customers.
As the DCS is established, New Zealanders will start to see more information from their deposit taker, who will publish on their websites a list of the deposits that are protected by the DCS. There will also be information on our website.
Visit www.rbnz.govt.nz/dcs
Remember to keep your contact details up-to-date with your deposit taker.
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)
* This is not an exhaustive list. Refer to Deposit Takers Act 2023 No 35 (as at 17 February 2024), Public Act 192 Meaning of protected deposit and related terms (2) to see what products are not protected.
