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Savings protection

Savings protection

Old Jul 5th 2015, 10:26 pm
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Default Savings protection

Hi, A question for all the money savvy people out there.
Are NZ bank deposits protected here if local banks go bust? The UK currently has 85k GBP of protection and I thought there was none over here, but a kiwi friend suggests there is. Who is right?
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Old Jul 5th 2015, 10:59 pm
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Default Re: Savings protection

Unless something has changed recently, NZ and Oz have no deposit insurance. It actually concerns me greatly.

Ask your Kiwi pal to explain .
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Old Jul 5th 2015, 11:41 pm
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Default Re: Savings protection

not as I understand it

"Deposit guarantees Does New Zealand have any legislation that guarantees deposits made with New Zealand-registered banks, and if so up to what amount?

We currently have savings accounts (ones with bonus interest) with one bank and are wondering if we should split them between banks as protection.

The New Zealand Government doesn't guarantee deposits in banks — as noted in the previous letter. But the Open Bank Resolution (OBR) policy gives depositors some protection if a bank gets into trouble.

OBR "provides access to depositors' funds that does not exist in a normal liquidation process, when depositors may not be able to access their accounts for extended periods", says the Reserve Bank's website.

"Under OBR, if a bank fails, it can be reopened the next day under statutory management. Customers have immediate access to most of their money. Under OBR, this money will be government-guaranteed.

"If losses cannot be covered by shareholders and the bank's available capital, then in addition a proportion of depositors' funds are set aside and frozen for the purpose."

This is the "haircut" our previous correspondent referred to. Whether it's a trim or something more radical will depend on the circumstances of the bank failure.

And you might get that money back eventually. "Depositors still have a legal claim to their frozen funds as unsecured creditors, and if any money can be returned to depositors after the bank's financial situation has been worked through, it will be," says the website. For more detail see tinyurl.com/obrmadesimple."

taken from: Mary Holm: Haircuts possible on bank deposits - Personal Finance - NZ Herald News this was written in Feb this year
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Old Jul 5th 2015, 11:47 pm
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Default Re: Savings protection

Thank you.
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Old Jul 6th 2015, 1:16 am
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Default Re: Savings protection

Originally Posted by Mark Smith
Hi, A question for all the money savvy people out there.
Are NZ bank deposits protected here if local banks go bust? The UK currently has 85k GBP of protection and I thought there was none over here, but a kiwi friend suggests there is. Who is right?
I think that 85k is coming down to 75k soon. I can't remember where I read it but it was recently.

I'm inclined to go for one of the few NZ banks left. I have a feeling that if an Aussie bank fell over they wouldn't care less about kiwi depositors. The NZ banks or government might. Not sure if this is dreaming, but my experience of Australian attitudes to kiwis is pretty negative. They don't really care what happens to us, so we'd be cast adrift without a second thought.

I had read Mary Holms' article (above) before and felt nervous by the phrase right at the end:

This is the "haircut" our previous correspondent referred to. Whether it's a trim or something more radical will depend on the circumstances of the bank failure.
and

And you might get that money back eventually.
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Old Jul 6th 2015, 3:19 am
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Default Re: Savings protection

I think that 85k is coming down to 75k soon. I can't remember where I read it but it was recently.
Saw that today in the daily mail.
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Old Jul 6th 2015, 8:56 am
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Default Re: Savings protection

Originally Posted by jmh
I'm inclined to go for one of the few NZ banks left. I have a feeling that if an Aussie bank fell over they wouldn't care less about kiwi depositors. The NZ banks or government might. Not sure if this is dreaming, but my experience of Australian attitudes to kiwis is pretty negative.

Because your fellow countrymen have such a wonderful track record of being squeaky clean and taking good care of other people's money; yeah, right!!


https://en.wikipedia.org/wiki/Financ...2_(New_Zealand)
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Old Jul 6th 2015, 9:48 am
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Default Re: Savings protection

If it all goes wrong unsecured depositors become bondholder (i.e. the Cyprus solution). Yay! In a way though I can't abide the idea of government intervention into banks over leveraging themselves or dogged by short-term thinking.
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Old Jul 6th 2015, 8:01 pm
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Default Re: Savings protection

Originally Posted by Bo-Jangles
Because your fellow countrymen have such a wonderful track record of being squeaky clean and taking good care of other people's money; yeah, right!!


https://en.wikipedia.org/wiki/Financ...2_(New_Zealand)
Read it again, I never claimed that. No need to put words in my mouth to make your point.
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Old Jul 6th 2015, 8:02 pm
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Default Re: Savings protection

Originally Posted by Charismatic
If it all goes wrong unsecured depositors become bondholder (i.e. the Cyprus solution). Yay! In a way though I can't abide the idea of government intervention into banks over leveraging themselves or dogged by short-term thinking.
Makes property look like the best investment option.
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Old Jul 7th 2015, 7:01 am
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Smile Re: Savings protection

Originally Posted by jmh
Makes property look like the best investment option.
Could be shares or bonds as well. Anything that's not an account (cheque, savings, term deposit etc.)
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Old Jul 8th 2015, 4:49 am
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Default Re: Savings protection

I've been accumulating old British Sovereigns for a while now plus some 1 oz Kiwi gold coins from NZ Mint.
I've changed my bank deposit to on-call so can quickly bail-out if/when things get desperate. Also acquired an additional residential property in the provinces.
You just need to look to Greece to see how things can quickly turn to custard (or blancmange if you prefer).
1st October is when the SHTF according to Martin Armstrong.
Good luck.
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Old Jul 8th 2015, 11:41 pm
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Default Re: Savings protection

I like the idea of gold but the idea of doing something 'different' with hard earned savings scares me a little.

I would love for us to invest in a property but simply do not have enough funds for that . Yes, rent could pay a bit of a mortgage but for that age is somewhat against us.

What to do. What to do. Worry.Worry.Worry.
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Old Jul 8th 2015, 11:43 pm
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Default Re: Savings protection

Funny enough I've spent the morning looking at silver and gold.
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Old Jul 21st 2015, 12:33 am
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Default Re: Savings protection

Originally Posted by LoCarb
I've been accumulating old British Sovereigns for a while now plus some 1 oz Kiwi gold coins from NZ Mint.
I've changed my bank deposit to on-call so can quickly bail-out if/when things get desperate. Also acquired an additional residential property in the provinces.
You just need to look to Greece to see how things can quickly turn to custard (or blancmange if you prefer).
1st October is when the SHTF according to Martin Armstrong.
Good luck.
Looks like gold can turn to custard too!

Speculators smash gold as dollar squeeze tightens - Telegraph
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