How safe is money in the bank? Ask Susan

Got questions? RNZ has launched a new podcast, 'No Stupid Questions', with Susan Edmunds.

We'd love to hear more of your questions about money and the economy. You can send through written questions, like these ones, but even better, you can drop us a voice memo to our email [email protected].

You can also sign up to RNZ's new money newsletter, 'Money with Susan Edmunds'.

Regarding the bank depositor compensation scheme that was discussed on the No Stupid Questions podcast this week [which provides protection up to $100,000 per person to people with money in the bank, in the event of bank failure] the $100,000 deposit that is insured per person per institution...what happens when two people have a joint account with the same bank?

When there's a joint account, both people have the protection so in that case the account could be protected up to a joint $200,000.

I am a NZ citizen who has been living in Australia from 2007. I do not receive a NZ or Australian pension. If I return to live in NZ would I be able to apply for a NZ pension? I am now aged 80. In the past I have tried to get an answer from a few NZ departments who just refer me to another department who then refer me back to the original department.

To qualify for NZ Super, you need to be 65 and meet residency requirements. For people born before mid-1959, you need to have lived in New Zealand for 10 years since you turned 20, including five after the age of 50. But if you've been living in Australia you can use time spent there to satisfy the residency requirement.

If you're using time spent living in Australia, you can't access NZ Super until you reach Australia's age of eligibility, which is 67.

So it seems to me that you should be able to access NZ Super if you came back to New Zealand. If the reason you can't access the pension in Australia is your level of income or investments, that won't apply here.

Once you get back within the 26 weeks to keep your pension, how long is it before you can leave again to travel?

People who are receiving the pension can travel for 26 weeks and still receive it, provided they return within 30 weeks.

"A person who wants to travel or live overseas for longer than 26 weeks can also apply under the general portability payments and their payment is proportional to their residence in New Zealand between the ages of 20 and 65," MSD told me a little while ago.

"A person living permanently overseas may be able to receive up to the full rate of NZS if the country they're residing in has a social security agreement with New Zealand. What a person may be eligible to receive will depend on their personal circumstances and the provisions of the individual agreement. New Zealand has a social security agreement with 10 countries which includes Canada, Australia and the United Kingdom."

There is no set amount of time that you have to be back in between trips.

I just wanted to know, what KiwiSaver fund is better over a 20-year period, passive or active?

There's an ongoing debate about whether an active or passive management approach is better.

Active managers try to outperform the market, both when it's going up and when prices are falling, with their investment selections. Passive managers just track an index, so you'll get whatever performance the index delivers.

Active managers tend to be more expensive.

The passive argument is that it's very hard for active managers to consistently outperform in a way that makes the higher fee worthwhile. Data internationally shows most tend to underperform. Given that fees are one of the few things you definitely can control when you're investing, the argument goes, it makes sense to keep them as low as possible and over a long investment time period the difference can compound to be substantial.

I spoke to Murray Harris at Milford Asset Management for the podcast in late May. He said while international research suggested active managers aren't beating the market, there was also research locally conducted by MJW and Mercer which showed some NZ managers did add value.

"Local managers are able to outperform due to local markets being the less efficient and less researched - therefore opening up opportunities for an edge via good research - than very deep and large markets like the US. Think of it as the home turf advantage of a sports match."

Past performance is no guarantee of future performance but Harris suggested at the time time you could compare the reports that fund managers publish on their websites to get a sense of performance. Sorted has tools that allow for a relatively easy comparison, too.

I think it has to come down to what you're comfortable with. It's relatively easy to change provider, so you're not locked in to any decision you make.

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