The Finance Minister has announced that the retail deposit guarantee scheme which was due to expire on 12 October 2010 will now be extended through to 31 December 2011.
Some changes to the scheme’s terms and conditions are being made which include:
* Participating institutions fees will be changed to reflect their risk profile.
* Eligible bank deposits will be covered up to a maximum $500,000 per depositor per institution and, eligible non-bank deposits to a maximum $250,000 per depositor per institution. The maximum at the moment is $1 million per depositor per institution.
* Deposit-taking institutions with a credit rating of BB or higher can apply to participate but institutions with a lower credit rating or no credit rating won’t be eligible despite being included in the current scheme.
* Collective investment schemes won’t be eligible for the new scheme.
The Government will introduce legislation to enact the changes prior to the current scheme expiring.
Call Denis if you are considering investing or renewing your existing bank or finance company deposits to get some sound advice. Either contact Denis by email denis@thorner.co.nz or on 0274 575 190.
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