Government deposit guarantee

Make sure your savings are with an approved institution that's part of the government's Retail Deposit Guarantee Scheme. This guarantees existing and new deposits of up to $1 million per person in approved institutions.

The government has said the scheme will apply only until 12 October 2010. That means if an approved financial institution goes under between now and then you'll get your money back - and all the interest due. However, if you still have deposits with the company after 12 October 2010 and the company fails, you'll be on your own.

The guarantee covers only deposits and similar investments (such as current accounts, term deposits, bonds and debentures). It doesn't cover shares in a building society, or collective investments such as superannuation schemes provided by banks (although some cash-only collective investment schemes can apply to be included).

Not every financial institution is covered. By January 2009, 63 deposit-takers had been approved - including all the major retail banks and many credit unions, building societies and finance companies.

Always check with the institution itself before you invest. If it tells you it's in the scheme, be sure to get confirmation in writing. You can double-check for yourself on the Treasury website.

More information

• PowerSwitch: www.powerswitch.org.nz
• The Federation of Family Budgeting Services: www.familybudgeting.org.nz (0508 283 438)
• Working for Families: www.workingforfamilies.govt.nz
• Government benefits and supplements: www.workandincome.govt.nz
• Work and Income cookbook: www.winz.govt.nz
• Retail Deposit Guarantee Scheme: www.treasury.govt.nz

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Report by Susan Guthrie