Term Deposit Guarantee Scheme

Started by Basil, Jun 15, 2025, 06:48 PM

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Basil

Jun 15, 2025, 06:48 PM
https://www.interest.co.nz/banking/133725/who-pays-depositor-compensation-scheme

Not sure what to make of this.  I suspect that finance companies covered under the scheme who can offer term deposit rates higher than banks will find plenty of new support up to the $100K limit.

BlackPeter

#1
Jun 16, 2025, 09:54 AM
Quote from: Basil on Jun 15, 2025, 06:48 PMhttps://www.interest.co.nz/banking/133725/who-pays-depositor-compensation-scheme

Not sure what to make of this.  I suspect that finance companies covered under the scheme who can offer term deposit rates higher than banks will find plenty of new support up to the $100K limit.

Well, I guess this is what National run governments like to do: Allow risk takers to bag in any gains from taking risks, while happily asking the taxpayers to cover the losses if things turn pearshaped. The Key government volunteered taxpayers money after the GFC for any dodgy credit society, and the current government is just formalising this approach.

And yes, people would be stupid not to take the highest interest rate they can get, if the taxpayers are volunteered to pay for the associated risk.

Apollo

#3
Jul 02, 2025, 10:30 AM Last Edit: Jul 02, 2025, 10:35 AM by Apollo
Quote from: BlackPeter on Jun 16, 2025, 09:54 AMWell, I guess this is what National run governments like to do: Allow risk takers to bag in any gains from taking risks, while happily asking the taxpayers to cover the losses if things turn pearshaped. The Key government volunteered taxpayers money after the GFC for any dodgy credit society, and the current government is just formalising this approach.

And yes, people would be stupid not to take the highest interest rate they can get, if the taxpayers are volunteered to pay for the associated risk.
I could be wrong but I thought Grant Robertson got this ball rolling.

Any idea where the highest insured interest rate is to be found?

Re taxpayer funding pretty egregious what happened over the GFC but I read that the taxpayer is funding the Moana Pacifica Super Rugby team via some ethnic related govt departments. Pretty tenuous link funding professional rugby teams when direct help to those who need it might be a more appropriate way to spend our money.

Basil

#4
Jul 02, 2025, 05:43 PM Last Edit: Jul 02, 2025, 05:45 PM by Basil
From what I can see Liberty Financial are paying the most and "appear" to be covered by the Govt Guarantee scheme.  5.2% for term deposits of 12 months with Govt Guarantee for amounts up to $100K.  Might pay to check they really are covered by the scheme.
https://www.interest.co.nz/saving/term-deposits-1-to-5-years
I do note however that after tax if you are on a 33% tax rate, that's only 3.48% after tax, and your money is locked in for 12 months. 
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