The 12-month term deposit is a benchmark for NZ savers: long enough to attract a higher rate while remaining within annual planning horizons. Here are the highest 1-year term deposit rates in May 2026.
The highest 12-month term deposit rates in NZ in May 2026 are from Heartland Bank and Rabobank NZ, typically 4.60–5.10% p.a. Major banks offer 4.20–4.70%. Note that in mid-2026, 6-month rates are often equal to or higher than 12-month rates at many banks, so check both terms before committing.
12-Month Term Deposit Rates — May 2026
Rates are indicative and change frequently. Always confirm with the provider before investing.
| Provider | 12-month rate | Min deposit | DCS coverage |
|---|---|---|---|
| Heartland Bank | 4.90–5.10% | $1,000 | ✅ $100,000 |
| Rabobank NZ | 4.80–5.00% | $1,000 | ✅ $100,000 |
| SBS Bank | 4.60–4.80% | $1,000 | ✅ $100,000 |
| Kiwibank | 4.50–4.70% | $1,000 | ✅ $100,000 |
| BNZ | 4.30–4.60% | $2,000 | ✅ $100,000 |
| Westpac | 4.30–4.60% | $1,000 | ✅ $100,000 |
| ASB | 4.20–4.50% | $1,000 | ✅ $100,000 |
| ANZ | 4.20–4.50% | $1,000 | ✅ $100,000 |
Is 12 Months Better Than 6 Months Right Now?
In mid-2026, the NZ rate environment has an unusual feature: the OCR has been cut from its 2023 peak of 5.50%, and wholesale rates have normalised. This means the yield curve for term deposits is relatively flat.
At many banks, 6-month and 12-month rates are similar — or 6-month rates are actually higher.
Example (May 2026 indicative):
| Term | Rate |
|---|---|
| 6 months | 4.80% |
| 12 months | 4.70% |
When this is the case, the 6-month is superior: same or better rate, shorter lock-up, more flexibility to reinvest if rates change.
→ See: Short vs Long Term Deposits NZ
When 12 months is better: If you believe rates will fall further (RBNZ continues cutting) and you want to lock in today’s rate for a full year. A 12-month term deposit is insurance against declining short-term rates.
Interest Payment Options for 12-Month TDs
| Payment type | How it works | Often used for |
|---|---|---|
| At maturity | Full interest paid at 12 months | Maximising total return |
| Monthly | Monthly interest to your account | Retirees needing income |
| Semi-annual | Interest paid at 6 months and 12 months | Middle option |
Monthly interest rates are typically 0.05–0.20% lower than maturity rates. If you don’t need the income, interest at maturity pays slightly more.
What $50,000 Earns Over 12 Months
| Rate | Annual interest | After tax (28% PIR) | After tax (17.5% PIR) |
|---|---|---|---|
| 4.20% (big bank low) | $2,100 | $1,512 | $1,733 |
| 4.60% (Kiwibank) | $2,300 | $1,656 | $1,898 |
| 5.00% (Heartland) | $2,500 | $1,800 | $2,063 |
Important: If your taxable income is $53,500 or less and your total income (taxable income plus PIE income) is $78,100 or less, your PIR may be 17.5%, not 28% (these thresholds rose from $48,000/$70,000 on 1 April 2025). At 17.5%, the after-tax return is significantly higher. Confirm your PIR rate with the bank when opening.
→ See: PIR Rate NZ — What Rate Should You Use?
How to Get a Higher 12-Month Rate
1. Rates beyond your main bank In the May 2026 table above, Heartland Bank and Rabobank NZ show higher rates than the major banks.
2. Call the retention/term deposit team For larger amounts ($100,000+), some banks negotiate above their advertised rate.
3. Maximise PIR benefit Use the correct PIR rate — if it’s too high, you overpay tax. If too low, you’ll owe IRD at the end of the year.
Depositor Compensation Scheme
All listed banks are covered by the Depositor Compensation Scheme (DCS):
- $100,000 per depositor per institution
- Live since 1 July 2025, administered by the Reserve Bank of New Zealand under the Deposit Takers Act 2023
- Covers NZD deposits at registered banks and other licensed deposit takers
To exceed $100,000 safely: split across multiple banks (ANZ + Heartland, for example).
Automatic Rollover Warning
If you don’t give instructions before your 12-month TD matures, most banks will automatically roll it for another 12 months at the then-current rate — which may be significantly lower than your expiring rate.
Set a reminder 2–4 weeks before maturity to:
- Check current rates at multiple banks
- Decide whether to roll, change term, or withdraw
- Give the bank instructions in time
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
Is a 12-month term deposit safe? Yes — at any registered bank, deposits up to $100,000 are protected under the Depositor Compensation Scheme. The bank failing is an extremely low-probability event, but the scheme exists precisely for that scenario.
Can I withdraw a 12-month TD early? Yes, but with a break fee — typically 30–60 days of interest lost. Emergency withdrawals are possible; they just cost something.
Is 12 months too long to lock up money? It depends on your situation. Money for living expenses or emergencies should stay liquid (savings account or 30–90 day TD). Long-term savings that you don’t need for 12+ months are well-suited to a 12-month TD.