Copyright 2013 John T. Reed

I have recommended to readers that they follow my example and put rainy-day savings into New Zealand banks in the NZD currency.

I have also noted that although the US, Australia, and Canada have similar federal deposit insurance, New Zealand does not have deposit insurance. They ended it December 31, 2011 and only had it during the aftermath of the 2008 financial crisis.

So I have three bank accounts in New Zealand but only one each in Australia and Canada. Furthermore, I constantly monitor both the New Zealand dollar currency and each of my New Zealand banks via Google alert and talking to my Harvard Business School sectionmate contact who is a prominent businessman in Auckland.

As a result of that, I decided to move 90% of my account out of one New Zealand bank until some trouble that bank is experiencing blows over. I am just moving it from one bank in Auckland to another several blocks away.

I contacted the bank I am removing the money from to ask how to do the transfer. I wondered if I had to do a domestic wire, which I assume cost $20 to $35 or some such. Or could I just get a cashier’s check for $8 or so. They said they will do the transfer electronically from their bank to another bank within New Zealand for free. I told them to do that on Sunday, 11/24/13. Twenty-seven minutes after I asked the New Zealand bank to do that, they emailed me that it had been completed.

In general, I have found the banks in Australia, Canada, and New Zealand and their personnel to be nicer and more competent as a group than those in the U.S.

It is not wise to put all your eggs in one basket. That is why I own five currencies (AUD, CAD, CHF, NZD, USD). Many readers still own just one and it is the USD. I shudder at the thought. One Facebook critic dismissed my advice as “currency speculation.” I suspect he only owns USD. There is an old saying on Wall Street:

If you’re not hedging, you’re speculating.

So which one of us is hedging and which one of us is speculating?

And since New Zealand has no deposit insurance, I also used three banks there. So I have five currencies and five foreign banks.

Plus, I WATCH all five currencies daily with Google alerts and otherwise and I watch all three banks in New Zealand with Google alerts and otherwise.

I am not sentimental about any of these. I will drop any in a New York minute whenever new facts warrant. I am keeping some money in the bank with the possible trouble so I can move money back into the account without going through all the steps of opening a new account from the U.S.

John T. Reed