The new week, the week before the next Reserve Bank Official Cash Rate review, has kicked off with term deposit (TD) rate cuts.
In fact, they extend a prior week where these cuts flowed as well.
Monday, both Kiwibank and BNZ are in there cutting rates to savers.
However, it a bit of a surprise, Kiwibank actually raised its one year rate to 4.75% from 4.60%, going against the grain. But that make's Kiwibank's TD offer for all terms 6 months to 12 months the same, 4.75%. And their 4.75% one year offer is now available for a smaller $5000 minimum deposit.
Despite that, ANZ still have a 4.80% six month offer on the table, the highest of all the main banks.
Among the challenger banks, ICBC and SBS Bank are offering 5.35% for a six month term deposit as stand-out rates. No main bank has a 5% rate any more, and now only three challenger banks have them.
And if you are up for the added risk, we should note that SBS Bank has a capital bond issue open at present that offers 6.25%.
But that capital bond won't qualify for the guarantee under the Depositor Compensation Scheme when it kicks in mid-year.
In the background, wholesale rate falls seem to have stalled, and are still at about the same level they were a month ago. So no wholesale pressure here for lower rates. Loan demand levels will be playing an outsized part in who banks are offering savers less.
When you invest, always check how interest is compounded. Depending on how much you are committing, compounding more often is materially better. But some banks advertise their "interest at maturity" rates different to their compounding rates, which for some can be set a little lower. Both Kiwibank and Rabobank do this, although most other main banks don't.
Use the calculator at the foot of this article to see the differences.
We should also point out that after-tax returns can be enhanced for some savers with higher tax rates, by the choice of PIE structures. Not all banks offer these, but most of the main banks do. For a nine month bank offer, they can be boosted by about 30 basis points going this way. In some cases that will make up any difference, or more.
Always ask a bank for a better rate. Many bank staff have discretion to offer more than the advertised rate. (And check your bank's app offers as they too are often enhanced to retain you). But in this environment don't get your hopes up for a positive response. Carded rates are likely to now be the 'best rate', except in quite special circumstances.
Use the term deposit calculator here, or the one below the table, to calculator your expected net returns.
The latest headline term deposit rate offers are in this table after the recent changes over the past week. The background colour-code indicates 5%+ rates still available.
| for a $25,000 deposit February 10, 2025 |
Rating | 3/4 mths |
5 / 6 / 7 mths |
8 - 11 mths |
1 yr | 18mth | 2 yrs | 3 yrs |
| Main banks | ||||||||
| ANZ | AA- | 4.25 | 4.80 | 4.70 | 4.55 | 4.40 | 4.35 | 4.35 |
 |
AA- | 4.25 | 4.75 | 4.60 | 4.50 | 4.30 | 4.20 | 4.30 |
 |
AA- | 4.20 | 4.70 | 4.60 | 4.50 | 4.40 | 4.35 | 4.40 |
 |
A | 4.25 | 4.75 | 4.75 | 4.75 | 4.40 | 4.40 | |
 |
AA- | 4.25 | 4.70 | 4.65 | 4.50 | 4.40 | 4.40 | 4.40 |
| Kiwi Bonds. 'risk-free' | AA+ | 4.00 | 3.75 | 3.75 | ||||
| Rating | 3/4 mths |
5 / 6 / 7 mths |
8 - 11 mths |
1 yr | 18mth | 2 yrs | 3 yrs | |
| Other banks | ||||||||
| Bank of China | A | 4.40 | 5.00 | 4.85 | 4.80 | 4.65 | 4.45 | 4.45 |
| China Constr. Bank | A | 4.25 | 4.90 | 4.70 | 4.65 | 4.55 | 4.45 | 4.40 |
| Co-operative Bank | BBB+ | 4.15 | 4.85 | 4.70 | 4.60 | 4.40 | 4.35 | 4.40 |
| Heartland Bank | BBB | 4.55 | 4.90 | 4.80 | 4.65 | 4.50 | 4.45 | 4.45 |
| ICBC | A | 4.65 | 5.35 | 5.05 | 4.95 | 4.75 | 4.55 | 4.40 |
 |
A | 4.35 | 4.85 | 4.70 | 4.55 | 4.50 | 4.35 | 4.35 |
 |
BBB | 4.25 | 5.35 | 4.75 | 4.60 | 4.40 | 4.40 | 4.40 |
 |
BBB+ | 4.25 | 4.80 | 4.70 | 4.55 | 4.55 | 4.40 | 4.40 |
| Non-Bank Deposit Takers | Rating | 3/4 mths |
5 / 6 / 7 mths |
8 - 11 mths |
1 yr | 18mth | 2 yrs | 3 yrs |
| Community institutions | ||||||||
| First Credit Union | BB | 4.25 | 5.00 | 4.80 | 4.70 | 4.60 | 4.50 | |
| Heretaunga Bldg Society | 4.30 | 4.95 | 4.70 | 4.50 | ||||
| Nelson Building Society | BB+ | 4.40 | 4.40 | 4.30 | 4.20 | 3.90 | 4.00 | |
| Police Credit Union | BB+ | 4.20 | 4.80 | 4.70 | 4.55 | 4.40 | 4.20 | |
| UnityMoney | BB | 4.25 | 4.75 | 4.55 | 4.45 | 4.25 | 4.20 | 4.15 |
| Wairarapa Bldg Society | BB+ | 4.05 | 4.50 | 4.90 | 4.75 | 4.50 | 4.30 | |
| Finance companies | ||||||||
| Christian Savings | BB+ | 4.25 | 5.00 | 4.90 | 4.85 | 4.65 | 4.45 | 4.45 |
| Finance Direct | 3.95 | 6.50 | 5.90 | 6.00 | 6.10 | |||
| General Finance | BB | 4.55 | 6.05 | 6.15 | 6.25 | 6.00 | 5.75 | 5.50 |
| Gold Band Finance | BB- | 3.75 | 3.75 | 6.40 | 6.20 | 5.75 | 5.75 | |
| Liberty Financial | BBB | 4.25 | 5.85 | 5.65 | 5.50 | 5.00 | 5.00 | 4.90 |
| Mutual Credit Finance | B+ | 6.50 | 6.50 | 6.75 | 6.25 | |||
| Xceda Finance | B+ | 6.50 | 6.40 | 6.40 | 6.00 | 5.80 | 5.50 |
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45 Comments
Go short term on your TD, I went 6 months its going to turn around and head up again.
Why don't you use balanced or income funds rather then TD?
I work to hard for my money to just give it to a bank.
I'm no longer having to work hard for my money.
You are an interesting character, your risk profile towards property is high, but you seem completely averse to any other risk? Is Property like TD a sure thing?
Many older Kiwis seem to be terrified of productive investment, some due to being knocked around in the 1987 stock market crash during their formative years.
I think this explains a lot about our lack of productivity, weak share market and general capital environment, and obsession with housing investment.
Where does their capital land though? It's one thing to say they're terrified of productive investment, but when some old person drops $500k on a rental property the cash is not sitting boxed up in the roof space.
Actually the finance company collapses of the 00s had are far worse effect. People stopped trusting anything apart from banks which got government guaranteed during that period
My risk towards property is Zero, I'm mortgage free. Self employed very part time and money in the bank. 58 years old and just cruising to collecting the super and staying fit so hopefully I live long into my 80's. I will acknowledge I think completely differently to just about everyone else, hence my financial position.
Such a boomer attitude Z. The "I'm alright and that's all that matters" is understandable but unfortunately a pillar of the malaise and complacency underpinning Aotearoa. The curse of the nation is the desire to be average.
Gen X I believe and certainly not average. I would be a whole lot more worried about the up and coming generations, we actually worked to get where we are, so we now deserve to be able to kick back and take time to smell the roses.
I would be a whole lot more worried about the up and coming generations, we actually worked to get where we are,
Too many avos and toast you reckon Z. Boomer attitudes are as empty as their understanding of how they need a steady stream of buyers for their assets. And the reality is that boomers think they can horse trade their assets between themselves. Now that is possible true. But I would like to see evidence or a base case for its feasibility.
Again, he's not what you call a "Boomer". (it's shallow compartmenting from your part anyway)
100% a boomer attitude. Understand why you stand up for the team Dr Y, but focus on the content, not the superficial.
"focus on the content, not the superficial."
How cynical of you, when you're the one judging others by their age or age group.
we actually worked
so we now deserve
I find this is a cliched sound bite from anybody around your vintage, and probably what your elders said of your lot many years ago, perhaps as weird attempt to justify their 65+ welfare cheque from those claiming support that are below 65, who they imagine are less deserving.
Weird flex, as the kids say
Yeah, weird, especially after being given free education and debt-free entry to work, universal family benefit, affordable housing, free money from changes in housing policy, and a universal pension all thanks to the taxes of generations before and after.
...because tall poppies are justly celebrated, recognised & rewarded in NZ?
There's good reason to be quietly "the millionaire next door"
There's good reason to be quietly "the millionaire next door"
OK. But you need to accept that Aotearoa is one big retirement village. The boomers and the "younger people with boomer think" tend to get offended when anyone points the economy is little more than a rentier economy as opposed to an economy built on production and innovation.
What's your fixation with "Boomers" ? which btw Zwifter is not. How old are you J.C. or are you afraid to share this info ?
But come on J.C it makes for some interesting BBQ's am I right?
Correct Kiwikidnz, we celebrate mediocre these days, there is no such thing as a fail anymore, the problem starts at school these days. Best to keep a low profile if you become even remotely successful, apparently you are an instant "I'm all right Jack".
Too right, we've spent too long idolising free wealth from property rather than rewarding the value makers who create real export value. We need to reward and celebrate those who build export revenue generating companies, not who lazily speculate on existing housing thanks to a wealth head start from preceding generations.
Except the average person doesn’t save when younger and don’t have much saved for retirement so relies on super. FIRE movement where people are financially independent when younger seems to be the dream situation
There is no risk to property investing whatsoever from where I sit.
Buy right at under true market value with upside, ensure the figures stack up and no risk at all if you are fully insured.
Term Deposits are a waste of time as returns are poor.
Does anyone know anyone that has become a multi millionaire from investing soley from Term Deposits?
IMO it depends what the interest rates are and hire soon you need the money. We have had some ok interest rates up until recently
Not sure Term Deposits rates have been that flash by the time you are taxed at say a third!
Real Estate will always give better returns but if you arent motivated then yes Term Deposits could suit people bearing in mind you will be going backwards financislly.
There is no risk to tulip investing whatsoever from where I sit.
Buy right at under true market value with upside, ensure the figures stack up and no risk at all if you are fully insured.
Fair enough, if you want to invest in Tulips and it gives a good safe return.
What if the weather kills off the tulips though?
Tulips less often subsidised and bailed out by taxpayers and central bank, in fairness.
No risk at all? What happens when your rentals become uninsurable due to council changes in zoning or disaster mapping? Or the insurance doesn't pay out? Renters trash the place and won't leave so you have to take months to get them out by force via the tenancy tribunal? Perhaps something comes up your building report didn't pick up and suddenly your numbers are skewed by surprise costs. Many many scenarios would suggest there is always risk in property. It may seem hard to say so if you already have sufficient capital or equity behind you from when housing was much cheaper, and thus a buffer so you won't lose your shirt if the worst happens.
No risk at all? What happens when your rentals become uninsurable due to council changes in zoning or disaster mapping? Or the insurance doesn't pay out?
So far, taxpayer handouts. Southern Response and the Auckland floods, to point.
Obscene welfare, really.
Interesting you get 3 thumbs up so far on something only you can verify. It'll cost you soon for those multiple accounts you need to give your comments perceived credibility.
only one account.
If people do not want top investment advice, then that doesnt effect me whatsoever.
What I will say is that people who have the wrong mindset will very likely not achieve financial indeoendsnce.
Maybe they like the premise of what he said, not whether it was true or not..
What makes you think it’ll be higher in 6 months? I’ve heard arguments both ways, so I’m genuinely curious.
You beat me to it…was about to ask the same question. From I’ve read/heard rate rises/drops ↕️ are on a knife’s edge…I’d love to hear the sound reasoning behind such a confident statement.
I am in six months too. Everything comes out of TD before the deposit insurance scheme kicks in. I want to see it in place before I go longer. I hope you are right and rates come up. A system that benefits debtors more than savers is why the nation is in the mess it is.
The 'great disruptor' kiwibank, no compounding interest.
FAIL
I prefer banks pay me monthly and I can reinvest that myself. But many banks only offer it in longer terms. Not all interest rates advertised are the same when you factor in how interest is paid. IMO they should be required to all advertise their rates in the same way so to not confuse consumers
Yep, they should be more transparent.
I"ll take the compounding option every time. Need all the help I can get! Working so little funds, reinvesting the monthly payment is pointless when it's too small a figure.
Surely when the deposit guarantee scheme comes in then people may move to the building societies etc..they still seem to be offering 6plus %, then banks may need to up theirs a bit.
If and when the finance companies get the guarantee, they will then immediately cut their rates to be a tiny bit above the A rated banks.
Will be interesting to see because if they aren’t much better, people will still see them as risky, and forgoing a bit of interest for extra peace of mind can be worth it for some
Yes. They will have the guarantee but you might have to wait 12 months or so to get your money while the mess is tidied up.
For Admin
The swap rate data points provide the actual rate for day, however the TD data points no longer bring their days rate up on your graphs above. Can this be fixed. John
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