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Depositor Compensation Scheme

The Deposit Takers Act will establish a new Depositor Compensation Scheme to protect up to $100,000 per depositor per deposit taker in the event of a failure.

Deposit Takers Act overview

The Deposit Takers Act 2023 (DTA) will contribute to New Zealand’s financial stability and New Zealanders’ well-being and prosperity, by ensuring the safety and soundness of the deposit-taking sector. 

The new legislation brings New Zealand into line with our international peers and will give New Zealanders the confidence that their eligible deposits are protected.

Depositor Compensation Scheme

To deliver our obligations under the Act, from mid-2025, we will be introducing a Depositor Compensation Scheme (DCS) to protect up to $100,000 per depositor (customer) per deposit taker (financial institution) in the event of a failure.

Protecting New Zealanders' deposits

The DCS will give New Zealanders peace of mind that their eligible deposits are protected if their deposit taker fails.

The products likely to be protected include savings accounts, transactional accounts, term deposits and equivalent accounts.

When will my savings be protected from?

The DCS is being prioritised ahead of the rest of the legislation coming into effect. It is expected to be operational from mid-2025, so that New Zealanders' deposits are protected as soon as possible.

Before the DCS comes into effect, we will provide deposit takers with guidance and resources to communicate the DCS to their customers. There will also be information on our website.

Developing the DCS rules with the deposit-taking sector

The DTA will create a single, consistent and proportionate framework for regulating deposit takers: banks, credit unions, building societies and finance companies. 

We are currently developing regulations and standards that deposit takers will need to comply with under the DTA. The deposit-taking sector is being consulted and engaged with throughout this process and they are providing valuable input into how the DTA will work in practice.