Each week BusinessDesk and the NZ Herald’s Cooking the Books podcast tackles a different money problem. Today, it’s the new rules on what happens to your savings in a crisis. Hosted by Frances Cook.
When discussing what to do with your money, the topic of risk always comes up. And a savings account is supposed to be one of the safest options.
So, New Zealanders might be surprised to learn that, actually, they’ve had few legal protections on that front – until recently.
NZ was one of only two countries in the Organisation for Economic Co-operation and Development (OECD) not to have some form of government protection if their bank failed. The other country is Israel.
That means if there was a banking crisis, you could lose your life savings, even though you’d thought you had them somewhere safe.
Now, before you panic, this has now changed.
The Deposit Takers Act has just been passed in Parliament and guarantees protection of your savings, up to $100,000, if your bank fails.
As always, there is fine print on this and different ways you can use it to your advantage to ensure you have the best possible protection.
For the latest podcast, I talked to Xceda chief executive Daniel McGrath.
For the interview, listen to the podcast here.