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Depositor Compensation Scheme (DCS)

What is the DCS?

The DCS is a deposit insurance scheme that covers investor deposits for up to $100,000 in the unlikely event that a licenced financial institution fails. The DCS is in addition to existing protocols already in place, such as regulatory oversight, regulatory and internal operating guidelines, internal policies, and a regular credit rating review by an independent rating agency (Fitch). The DCS provides an extra layer of assurance to depositors that their money is safe if a deposit taker were to fail

The DCS has been introduced by the Government. It’s funded by deposit takers (investment providers) and administered by the Reserve Bank of New Zealand – Te Pūtea Matua (RBNZ).

When does the DCS come into effect?

The DCS comes into effect on 1 July 2025.

Why is the scheme being introduced?

Following a review of New Zealand’s financial system by the International Monetary Fund (IMF) in 2017, the IMF recommended the introduction of deposit insurance, in line with most other OECD countries.

The Deposit Takers Act 2023 (DTA) was subsequently established to create a single, modern regulatory framework for all deposit takers in New Zealand. The DCS is one of the first initiatives to come into effect under the Act.

The DTA, once implemented by the RBNZ, will support a financial stability objective: to help protect the stability of the financial system by regulating and supervising financial institutions.

What is a ‘deposit taker’?

A ‘deposit taker’ is a financial provider that takes and holds customer deposits.

What is a ‘depositor’?

A ‘depositor’ is anyone who holds their money, or has their money held for them, in an account with a financial provider. This includes transaction, savings, notice, and term deposit accounts.

Which customers and products are covered?

The majority of customers with eligible deposits will be covered by the DCS, including individuals, companies and trusts.

Your money is automatically protected if it is in any of the following DCS-covered accounts:

  • Transaction accounts
  • Savings accounts
  • Notice accounts
  • Term deposits

In terms of WBS accounts, the following are DCS-protected:

  • Term investments
  • Call investments

Check with us if you are unsure whether your money is protected.

What happens if you have a joint account?

DCS insurance cover is per person, per entity. For example, if you have $50,000 in a single account and $100,000 in a joint account at the same financial institution, you would be covered for the full $50,000 in your single account and half ($50,000) in the joint account, totalling $100,000.

See the RBNZ site for more examples of cover for different investment scenarios.

What isn’t covered by the DCS?

Some money is not protected by the DCS, including money held in:

  • bonds and other tradable products
  • managed investment schemes (including KiwiSaver and other superannuation schemes that are managed investment schemes)
  • foreign currency accounts.

Please note that certain depositors are not eligible for cover under the Depositor Compensation Scheme. For example, banks, government agencies or licensed deposit takers. For more details, visit legislation.govt.nz

Who pays for the DCS?

The RBNZ will collect a levy from all deposit takers, including WBS, to fund the DCS. There is no direct cost to you when you hold your money in one of our DCS-protected accounts.

Cover comes into effect automatically

If your money is held in one of our DCS-protected accounts, your DCS cover will come into effect automatically from 1 July 2025. You don’t need to do anything.

Will the DCS change how WBS operates?

Nothing about how WBS operates will change when the DCS comes into effect. All it will mean is that you’ll have protection for your deposits of up to $100,000 – our commitment to our members will remain a priority.

How safe is your investment with WBS?

WBS has significant protection and controls in place to ensure we operate securely and safely. We’re a non-bank deposit taker licensed by the RBNZ, whose role is to maintain financial stability. We are also monitored by a regulatory supervisor who reports to the RBNZ. WBS has been operating in Wairarapa from more than 150 years and we’ve had a stable BB+ credit rating for over 16 years.

Find out how secure your money is with WBS.

What would happen to your money?

If enacted, the DCS would ensure that you have access to up to $100,000 of your funds as soon as practicable. Any further funds held by us would then be managed as outlined in our PDS.

If you were to have more than $100,000 in a DCS-covered account/s with a financial institution that failed, the liquidation or receivership of the financial institution would determine what remaining funds were available to be distributed, as also outlined in our PDS.

For more information

Find out more about the DCS, including different scenarios, on the RBNZ website.