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Deposit Takers Act 2023

Depositor compensation scheme - Entitlement to compensation - Entitlement rules

202: General entitlement rule

You could also call this:

"Get compensation if your money is in a licensed bank or deposit taker that fails"

Illustration for Deposit Takers Act 2023

You are entitled to compensation from the fund if you have placed one or more protected deposits with a licensed deposit taker. The Bank must have issued a specified event notice about the deposit taker, and you must be an eligible depositor. Your deposits must have been with the deposit taker at the quantification time.

You can hold the deposit in your own name, or with others, or someone can hold it for you. The Bank calculates the amount of compensation you get, and this is done according to the regulations.

You can find more information about holding deposits in your own right in section 209. This section, along with sections 203 to 210, can be affected by regulations mentioned in sections 212 to 215.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS501457.

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Money and consumer rights > Banking and loansBusiness > Industry rules
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203: Calculation of entitlement, or

"How much money you can get back if your bank or deposit taker fails"

Part 6Depositor compensation scheme
Entitlement to compensation: Entitlement rules

202General entitlement rule

  1. A person (A) is entitled, in respect of 1 or more protected deposits placed with a licensed deposit taker (B), to compensation from the fund if—

  2. the Bank has issued a specified event notice in relation to B; and
    1. A is an eligible depositor; and
      1. the deposits are placed with B at the quantification time; and
        1. 1 or more of the following apply in respect of each of the deposits:
          1. A holds the deposit in A’s own right (and no other person holds the deposit):
            1. A holds the deposit in A’s own right jointly with 1 or more other persons:
              1. A holds the deposit in A’s own right with 1 or more other persons other than jointly:
                1. the deposit is held for, or on behalf of, A (and no other person) under a relevant arrangement:
                  1. the deposit is held for, or on behalf of, A and 1 or more other persons under 1 or more relevant arrangements.

                  2. The compensation to which A is entitled is the amount that is calculated by the Bank under this Part and in the manner prescribed by the regulations.

                  3. See section 209, which provides that references in this section to a person holding a deposit in their own right may be treated as including a trustee or trustees holding a deposit on trust.

                  4. This section and sections 203 to 210 are subject to the regulations referred to in sections 212 to 215.