Term deposits are one of the safest investments available to New Zealanders. You lock in a fixed rate for a set period, and the bank pays you interest. The challenge is choosing the right bank, the right term, and the right rate — particularly when the OCR is moving.
As at September 2026, among the banks listed below, 12-month term deposit rates are roughly 3.9–4.1% p.a. (lower for shorter terms), apart from SBS Bank's 12-month rate of 4.50%, which it offers for a limited time only. Leaving out that SBS rate, 12-month rates across the banks in our table sit within 0.20% of each other. PIE term deposits tax interest at your PIR (not marginal rate), a meaningful advantage for earners over $53,500. The OCR was cut to a floor of 2.25% in late 2025 (down from a 5.50% peak) before the RBNZ began raising it again in mid-2026, reaching 2.75% by September 2026, so term deposit rates are well below the 2023–2024 highs.
How Term Deposits Work in NZ
- You deposit a lump sum for a fixed term (usually from about 30 days to 5 years)
- The bank pays a fixed interest rate for the duration
- At maturity, you receive principal plus interest (or principal only if interest was paid periodically)
- You can usually choose how often interest is paid, such as monthly or at maturity
Minimum deposit: Minimums vary by bank: several start at $1,000, while others set $2,000 or $10,000 for standard term deposits. Some banks set higher minimums.
Breaking a term deposit: If you need funds before maturity, banks apply an early repayment adjustment or termination charge, and the amount depends on the bank’s terms and rates at the time. Always read the early repayment terms before locking in.
Term Deposit Rates — September 2026
Rates indicative, based on publicly tracked rates as at 19 September 2026, with Co-operative Bank, BNZ, Kiwibank and ANZ rates updated from their own sites on 14 October 2026. Term deposit rates are subject to change without notice, so check with each institution before investing.
3–6 Month Rates
| Bank | 3 months | 6 months |
|---|---|---|
| Rabobank | 3.10% | 3.65% |
| Kiwibank | 3.05% | 3.60% |
| ASB | 3.00% | 3.55% |
| SBS Bank | 3.00% | 3.55% |
| TSB | 3.00% | 3.45% |
| Co-operative Bank | 2.90% | 3.60% |
| ANZ | 2.90% | 3.55% |
| BNZ | 2.90% | 3.60% |
| Heartland Bank | 2.90% | 3.55% |
| Westpac | 2.85% | 3.45% |
12–24 Month Rates
| Bank | 12 months | 18 months | 24 months |
|---|---|---|---|
| Rabobank | 4.05% | 4.25% | 4.40% |
| SBS Bank | 4.50% | 4.20% | 4.35% |
| Co-operative Bank | 4.10% | 4.20% | 4.35% |
| Kiwibank | 4.05% | ~4.15% | 4.30% |
| BNZ | 4.05% | 4.30% | 4.35% |
| ASB | 4.00% | 4.15% | 4.30% |
| Westpac | 4.00% | 4.30% | 4.30% |
| ANZ | 4.00% | 4.20% | 4.30% |
| TSB | 3.90% | 4.00% | 4.20% |
| Heartland Bank | 4.05% | 4.30% | 4.35% |
Note how close the 12-month rates are across the banks listed, other than SBS Bank’s limited-time 4.50%: they sit within 0.20% of each other.
Which Term Should You Choose?
The RBNZ cut the OCR to a floor of 2.25% in late 2025 (down from a 5.50% peak reached in 2023), then began raising it again in mid-2026 — to 2.50% in July and 2.75% in September 2026 — as inflation ran above target. The outlook matters:
If rates are expected to rise: Shorter terms (3–6 months) let you reinvest at higher rates sooner. The RBNZ raised the OCR in July and September 2026, which is the situation this describes.
If rates are expected to fall or stay flat: Longer terms lock in current rates. Longer terms would have locked in higher rates through most of 2025 as the OCR fell, but the OCR has been rising again since July 2026.
General guidance (September 2026): If the OCR keeps moving upward, a shorter term lets you reinvest sooner at any higher rates, while a longer term keeps today’s rate fixed for the whole term. As always, compare the 12-month rate against a term deposit ladder before committing a large lump sum to a single long term. Worked examples of rolling short terms against locking in for longer are in short-term vs long-term term deposits.
The Term Deposit Ladder Strategy
Rather than putting all your savings into one term deposit, a ladder spreads maturity dates:
Example: $40,000 split across 4 terms
- $10,000 → 3 months → reinvest
- $10,000 → 6 months → reinvest
- $10,000 → 9 months → reinvest
- $10,000 → 12 months → reinvest
If each deposit is reinvested for 12 months when it matures, you then have one maturing every 3 months. Benefits:
- Part of your money is never far from maturing
- Benefit from rate rises by reinvesting at market rates
- Smooths out timing risk
PIE Term Deposits — A Tax Advantage
Some providers offer PIE versions of term deposits where interest is taxed at your PIR (10.5%, 17.5%, or 28%) rather than your marginal tax rate. This matters if you earn over $53,500 a year, where your marginal rate (30% or more) is above the top PIR of 28%.
| Income | Marginal rate | PIR | Benefit on 4.5% $50k deposit |
|---|---|---|---|
| $0–$15,600 | 10.5% | 10.5% | $0 |
| $15,601–$53,500 | 17.5% | 17.5% | $0 |
| $53,501–$78,100 | 30% | 28% | $45/year |
| $78,101–$180,000 | 33% | 28% | $113/year |
| $180,001+ | 39% | 28% | $248/year |
For larger deposits or higher earners, the PIE saving is bigger (in the table above, $45 to $248 a year on $50,000 at 4.5%). Kiwibank offers a PIE Term Deposit and ANZ offers an ANZ PIE Fund – Term Option (both with a $10,000 minimum). Ask a provider specifically when opening.
Non-Bank Lenders Offering Term Deposits
New Zealand has a range of deposit takers outside the big banks, including non-bank deposit takers (NBDTs) that are regulated but not traditional banks:
- Heartland Bank: registered bank, formerly Heartland Building Society
- Nelson Building Society: regional building society
- Police Credit Union: member-only
- finance companies that take deposits: check they are a licensed deposit taker covered by the Depositor Compensation Scheme
Depositor Compensation Scheme
Since 1 July 2025, NZ’s Depositor Compensation Scheme (DCS), administered by the Reserve Bank, covers deposits up to $100,000 per depositor per licensed deposit taker if the institution fails. Licensed deposit takers include the major banks as well as Heartland Bank, Rabobank NZ and SBS Bank.
Cover is per deposit taker: any balance above $100,000 at one deposit taker is not covered, while money spread across more than one licensed deposit taker is covered up to $100,000 at each. Check the deposit taker is on the Reserve Bank list of deposit takers covered by the Depositor Compensation Scheme (rbnz.govt.nz) before depositing.
Tips for Term Deposit Success
- Compare smaller banks as well as the big four: in our September 2026 table, 12-month rates across the banks listed (other than SBS Bank’s limited-time 4.50%) differ by 0.20% or less
- Check for special rates: some banks offer special rates for selected terms only
- PIE pays more after tax if your income is over $53,500, because PIR is capped at 28%
- Ladder your deposits — don’t put everything in one term
- Read early repayment terms — understand the penalty before locking in large sums
- Note your maturity date: if you give no instructions, a provider may reinvest your money for the same term at the rate it then offers
How to Compare Term Deposit Rates Fairly
The headline rate is not always the full story. Consider:
Interest Payment Options
Banks let you choose how often interest is paid, and the options depend on the deposit type and term:
| Option | When paid | Often used for |
|---|---|---|
| At maturity | End of term | Short terms (the most common choice) or reinvestment plans; highest effective rate |
| Monthly | Each month | Regular income |
| Quarterly | Every 3 months | Regular income, paid less often |
| Six-monthly | Twice a year | Medium terms |
On a $50,000 deposit at 4.5% for 12 months:
- Interest at maturity: $2,250 received at month 12
- Interest monthly: about $187.50 a month, the same $2,250 over the year if each payment is taken out and not reinvested
Effective Annual Rate (EAR)
For deposits paying interest more frequently than annually, the effective annual rate differs from the stated rate. On a 12-month term deposit paying monthly at 4.5%, if each payment is reinvested the effective annual rate is about 4.59%, slightly above 4.5%, due to compounding. This is a minor difference but worth noting when comparing at-maturity vs periodic payment structures.
Term Deposit Providers in NZ
Providers are listed alphabetically.
| Bank | Minimum deposit | Online availability |
|---|---|---|
| ANZ | $10,000 | Online and branches |
| ASB | Not confirmed, check with the bank | Check with the bank |
| BNZ | $2,000 | Internet Banking |
| Co-operative Bank | Not confirmed, check with the bank | Check with the bank |
| Heartland Bank | $1,000 | Online or phone |
| Kiwibank | $1,000 | Online and branches |
| Rabobank | Not confirmed, check with the bank | Check with the bank |
| SBS Bank | $1,000 | Online and branches |
| TSB | Not confirmed, check with the bank | Check with the bank |
| Westpac | Not confirmed, check with the bank | Check with the bank |
Of these, Co-operative Bank, Heartland Bank, SBS Bank and TSB are NZ-owned; Co-operative Bank and SBS Bank are member-owned, and Rabobank NZ is part of the Dutch Rabobank cooperative group.
For smaller deposits ($1,000–$5,000), SBS Bank and Kiwibank accept a $1,000 minimum.
When to Use a Term Deposit vs Savings Account
The decision depends on three factors: timeline, rate comparison, and OCR direction.
| Scenario | Common choice |
|---|---|
| Need the money within 1–2 months | On-call savings account |
| Have $10,000+ you won’t touch for 6+ months | Term deposit (rate certainty) |
| Rates are rising (OCR likely to increase) | Short terms (3–6 months) — reinvest at higher rates |
| Rates are falling or at peak | A 12–18 month term |
| Building emergency fund | Savings account (must be accessible) |
| Lump sum from property sale, inheritance | Term deposit ladder |
September 2026 context: The RBNZ OCR is 2.75%, having risen from a 2.25% floor in mid-2026 after the cutting cycle that ran from 2024 to late 2025. A term deposit holds its rate for the whole term, so later OCR changes do not alter it.
Tax on Term Deposits in NZ
Standard Term Deposits — RWT
Interest on standard term deposits is subject to Resident Withholding Tax (RWT). The bank deducts RWT at your elected rate before paying interest:
| Income | RWT rate |
|---|---|
| Up to $15,600 | 10.5% |
| $15,601–$53,500 | 17.5% |
| $53,501–$78,100 | 30% |
| $78,101–$180,000 | 33% |
| $180,001+ | 39% |
If you give the bank your IRD number but choose no RWT rate, it deducts 33%, and without your IRD number it deducts 45%.
PIE Term Deposits — Lower Tax Rate
For earners on 30%+ marginal rates, ask specifically for a PIE term deposit. Availability and minimums differ by provider; Kiwibank’s PIE term deposit, for example, has a $10,000 minimum and terms up to 12 months. The rate may be the same as a standard term deposit, but interest is taxed at your PIR (maximum 28%) rather than your marginal rate.
The PIE option is chosen when you open the deposit; ask the provider whether an existing deposit can be switched.
Breaking a Term Deposit Early — What It Really Costs
Early repayment may be possible if the bank agrees, and a lower interest rate, fee or other charge may apply. Depending on the bank, the cost can depend on:
- How long you’ve held the deposit
- At some banks, what current rates are vs your locked rate
Early repayment charges: Each bank sets its own method. SBS Bank, for example, charges a fee of 1.5% a year on the amount withdrawn, for the time held; ask for the formula before locking in.
Illustration only (not any bank’s actual formula):
- $30,000 locked at 4.5% for 12 months
- You break after 3 months (9 months remaining)
- Current 9-month rate: 4.2%
- Early repayment adjustment: $30,000 × (4.5% − 4.2%) × 9/12 = $67.50
Some providers set the charge from the gap between your rate and current rates, others use a flat rate on the amount withdrawn, so the cost depends on the provider’s terms.
Always ask for the early repayment formula in writing before locking in a large deposit.
Where to check the latest data
Rates, fees and returns change often. Before deciding, check current figures yourself:
- interest.co.nz term deposits (1 to 9 months): tables of current short-term deposit rates.
- interest.co.nz term deposits (1 to 5 years): tables of current longer-term deposit rates.
- interest.co.nz term PIE rates: tables of current term PIE rates.
- The provider's own website: has its current rates, fees and full terms; these change more often than any comparison page.
- Financial Service Providers Register: shows whether a provider is registered to offer financial services in New Zealand.
Frequently Asked Questions
What is the highest term deposit rate in NZ right now?
As of September 2026, SBS Bank lists the highest 12-month rate in the table at 4.50%, offered for a limited time only; the other banks listed are at 3.90% to 4.10%, within 0.20% of each other. Rabobank’s 24-month rate of around 4.40% is the highest 24-month rate in the table. Verify directly with each institution as rates change.
Are term deposits safe in NZ?
Money in term deposits at licensed NZ deposit takers is generally covered by the Depositor Compensation Scheme, up to a limit. Since 1 July 2025, the Depositor Compensation Scheme (DCS) protects deposits up to $100,000 per depositor per licensed deposit taker, and registered banks are also regulated by the RBNZ. Cover is per deposit taker, so any balance above $100,000 at one deposit taker is not covered.
Can I break a term deposit early in NZ?
Usually, but each provider sets its own terms and charges for it (often an early repayment adjustment), and some need to approve the request or require notice first. This can mean you receive less interest than the rate you locked in. Read your specific deposit terms before committing.
Is a PIE term deposit better than a regular term deposit?
For earners with a marginal tax rate above 28% (income over $53,500), a PIE term deposit with the same stated rate delivers a higher after-tax return. The saving is the gap between your marginal rate (30%, 33% or 39%) and 28%, so 2 to 11 cents of tax per dollar of interest. For those at 17.5% or below, there’s no difference. Ask your bank specifically for the PIE version when opening.
What’s the minimum for a term deposit in NZ?
Minimums vary by bank: Kiwibank, SBS Bank and Heartland Bank accept $1,000, BNZ’s minimum is $2,000 and ANZ’s is $10,000. Check each bank’s current terms.
How do I check my term deposit on maturity?
Banks set their own maturity notices and options. Some reinvest automatically for the same term at the current rate if you give no instructions. Compare rates at maturity rather than auto-rolling at whatever rate the bank offers.