Insurance for bank deposits could soon be a reality with the Government calling for public submissions on mandated depositor protection. 

Green Party co-leader James Shaw has been calling for the change for some time, and told Kate Hawkesby our banks won't always be as stable as they are now.

The fee would be compulsory and would help protect our savings and investments, he said.

"It only really works if everybody participates in it."

"There are a couple of ways you can do it, when you have a deposit a small amount of taken off of your bank fees, or you levy the banks but generally, they pass the cost onto consumers anyway."

"That's one of the arguments against it, is that it could lead to a small increase in bank fee but overseas it's a very marginal cost.

When asked whether this was really necessary in New Zealand, Shaw said our system is very stable but "you can't predict how the future will go".

"It's an insurance scheme, it's like any insurance scheme. You sort of plan for that one horrible thing that happens, if on the chance it happens, and you kind of hope it doesn't."

Shaw said the cost would vary depending on how much individuals choose to insure.

He said if the proposal was implemented it would be rolled out within