Depositor Compensation Scheme: what the cover means
The scheme protects eligible deposits if a deposit taker fails, with a limit shared across protected accounts held by the same depositor at that institution.
On this page
- Started
- 1 July 2025
- Cover limit
- Up to $100,000 per depositor, per deposit takerReserve Bank, DCS coverage scenarios
- Enrolment
- Automatic for DCS-protected accounts
- Trigger
- Failure of the deposit taker
Protection against deposit-taker failure
The Depositor Compensation Scheme came into place on 1 July 2025. It covers money in DCS-protected accounts if the deposit taker fails. Coverage is automatic for protected accounts and can include transaction, savings, notice and term deposit accounts; the scheme does not cover every financial product. Reserve Bank, Depositor Compensation Scheme (opens in a new tab).
The limit is shared across accounts
The coverage limit is up to $100,000 per depositor, per deposit taker. Opening several protected accounts at the same deposit taker does not create a separate limit for each account. The Reserve Bank's scenarios combine deposits at the same institution and apply coverage separately when deposits are held at different deposit takers. Joint holdings and accounts held in different legal capacities have their own treatment in those scenarios. Reserve Bank, DCS coverage scenarios (opens in a new tab).
Products and losses outside the scheme
The Reserve Bank lists bonds and other tradable products, KiwiSaver and other managed superannuation schemes, and foreign currency accounts as outside the DCS. Losses from scams, fraud or hacking are also outside it. Deposit takers must maintain a list of their protected deposits on their websites. Some bank cash and term PIE products may qualify, so a product's tax treatment alone does not establish whether it is protected. Reserve Bank, what the DCS covers (opens in a new tab).
The account holder matters
The Reserve Bank's scenarios distinguish a person's own deposits, joint deposits and funds held in another legal capacity. Joint-account coverage takes account of each holder's share alongside their other protected deposits at that deposit taker. A limited liability company is treated separately from its owners. These distinctions prevent an account nickname or the number of accounts being mistaken for the number of separate depositors. Reserve Bank, DCS coverage scenarios (opens in a new tab).
The scheme has a specific purpose
The DCS responds to a deposit taker's failure. The Reserve Bank expressly excludes money lost through scams, fraud and hacking. Protection against institutional failure therefore does not establish protection against every way money can be lost, even when the account itself is a protected deposit. Reserve Bank, what the DCS covers (opens in a new tab).