Cooking the Books podcast: Can you trust the bank to protect your savings?

A new law gives people some protection if their bank fails. Photo / Getty Images

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 we talk about what to do with your money, there’s always a discussion of risk. 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.

New Zealand was one of only two countries in the OECD to not 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.

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 make sure you’ve got the best possible protection.

For the latest podcast, I talked to Xceda CEO Daniel McGrath.

For the interview, listen to the podcast here.

• If you have a question about this podcast, or a question you'd like answered in the next one, come and talk to me about it. I'm on Facebook here, Instagram here, and Twitter here.

• Listen to the full interview on the Cooking the Books podcast. You can subscribe on iHeartRadio, Apple Podcasts, or Spotify.