1 July 2025 – The Depositor Compensation Scheme (DCS) came into effect today, protecting depositors for up to $100,000 in the unlikely event that their bank or other licensed deposit taker fails.
Licensed deposit takers include banks, credit unions, building societies and finance companies who take retail deposits in New Zealand and are supervised by the Reserve Bank of New Zealand.
The scheme covers money held in standard banking products, including transaction, savings, notice, and term deposit accounts. It protects individuals, businesses and trusts, and applies automatically from today.
The scheme is established under the Deposit Takers Act 2023, and the Reserve Bank will manage and administer the scheme. It is fully funded by levies on industry.
Kerry Beaumont, Director of Enforcement and Resolution at the Reserve Bank says, “While deposit taker failures are rare, the DCS gives depositors extra peace of mind that their standard banking products are protected. This type of protection already exists in many other countries and contributes to the stability of New Zealand’s financial system.”
The scheme does not cover investments like KiwiSaver, bonds, shares, and similar products. It also does not protect against frauds or scams.
Banks, credit unions, building societies and finance companies who take retail deposits will list their DCS-protected products on their websites so depositors can check if their accounts are covered. Information about the scheme is also available on the Reserve Bank website.
More information
You can find a list of all deposit takers that offer DCS-covered deposits on the RBNZ’s website here: https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=7fb4bc651b&e=f3c68946f8
