Best Term Deposit Rates NZ

Term deposit rates never sit still for long. A bank that tops the table this month can be mid-pack by Christmas, which is why any list of the “best” rates, including this one, is a snapshot rather than a promise. Every rate below was taken from the provider’s own website in October 2026. Use the table to see who is paying what right now, then check the live rate with the provider before you put money in, because the figure on the day you invest is the only one that counts.

This guide also shows you how to judge whether a rate is genuinely good: what the Reserve Bank’s Official Cash Rate has to do with the numbers on offer, how payment frequency and compounding change what you actually earn, and how the tax treatment of a PIE term deposit can quietly beat a slightly higher headline rate. There is more on all of this across our Finance guides.

Quick answer

As at October 2026, the strongest published rates among the big banks sit at the longer end. BNZ’s published card showed 4.70% p.a. for five years and 4.05% p.a. for one year, ASB’s featured five-year rate was 5.00% p.a., and Kiwibank was advertising a special one-year rate of 4.05% p.a. Shorter terms pay noticeably less, with six-month money at 3.55% p.a. at BNZ. Deposits are protected up to $100,000 per person, per deposit taker, under the Depositor Compensation Scheme. If you pay tax at 30% or more, a PIE version of the same deposit can leave you better off after tax even at the same headline rate.

Term deposit rates compared, October 2026

Rates are per annum and apply to the minimum deposit shown. They were read from each bank’s own website in October 2026. Where a bank did not publish a figure for a term on the page checked, the cell says so rather than guessing.

Term	BNZ (min. $2,000)	ASB (min. $5,000)	Kiwibank (min. $1,000)
6 months	3.55%	Not published	Not published
9 months	3.65%	3.70%	Not published
12 months	4.05%	4.00%	4.05% (special rate, interest at maturity)
18 months	4.20%	Not published	Not published
24 months	4.20%	Not published	Not published
36 months	4.40%	Not published	Not published
48 months	4.60%	Not published	Not published
60 months	4.70%	5.00%	Not published

A few things are worth knowing about this table. BNZ publishes a full rate card on its website, which is why its column is complete. ASB promotes selected featured rates on its term deposit page, and Kiwibank promotes a special one-year rate on its homepage. ANZ and Westpac both sell term deposits with terms from one month to five years, but their full rate cards were not published in readable form on the pages checked, so no ANZ or Westpac figures appear here. ANZ’s minimum investment is $10,000 and Westpac’s is $5,000; both quote current rates in their apps, in internet banking or in branch.

Minimums matter if you are starting small: $1,000 at Kiwibank, $2,000 at BNZ, $5,000 at ASB and Westpac. The rates shown apply up to generous caps ($5 million at BNZ and Kiwibank, $10 million across all term deposits at ASB) that will not trouble most households.

What counts as a good rate in October 2026?

A term deposit rate makes more sense once you set it against the Official Cash Rate. The Reserve Bank lifted the OCR by 25 basis points to 2.75% on 2 September 2026, and has signalled it may need to lift it further this year, with inflation running at 4.1% in the June quarter. The next review is on 28 October 2026.

Banks price term deposits off wholesale market rates, which move with what investors expect the OCR to do next, not just where it sits today. That is why five-year money pays more than six-month money right now: the market is being paid for the possibility that rates keep rising. It also means a good rate is a moving target in a rising cycle. Plenty of savers ladder their money instead, putting some in a six or twelve-month term and some in longer terms, so a chunk matures regularly and can be reinvested at whatever rates are then on offer.

As a rough yardstick, the one-year rates in the table sit around one and a quarter percentage points above the OCR, which is competitive in the current market. The real test is simpler. Compare the same term, on the same day, across at least three providers, and compare the after-tax return using your own tax rate. That last step is where PIE deposits come in, and it is covered below.

How term deposits work

A term deposit is a loan to the bank, on simple terms. You hand over a lump sum for an agreed period, from as little as seven days at BNZ up to five years at most providers, and the bank pays a fixed rate of interest for that period. The rate is locked in on the day you invest. If market rates rise the following week, yours does not move. If they fall, it does not move either. That is the trade you make for certainty.

You cannot normally add money to a term deposit partway through, and you cannot treat it like a savings account. The money is committed until the maturity date, and getting it back early is possible only with the bank’s agreement and usually at a cost. Fees are uncommon: ANZ and Kiwibank both state there are no fees on their term deposits, and opening one takes a few minutes in an app or internet banking if you already bank there.

At the end of the term the deposit matures, and what happens then depends on your instructions. That part gets its own section below.

Interest payment options and compounding

How often interest is paid changes what you earn, even at the same advertised rate. The usual choices are monthly, quarterly, six-monthly, annually or at maturity, and the menu depends on the term. Kiwibank, for example, offers monthly, quarterly, annual or at-maturity interest on terms of a year or more. BNZ offers monthly or at-maturity payments on its standard term deposits, and a wider range of frequencies on its Term PIE.

You have two broad ways to take the interest:

• Paid out to your bank account. The interest lands as regular income. Retirees often use monthly payments this way, almost like a small pension top-up.
• Compounded (reinvested). The interest is added to your deposit and starts earning interest itself. Westpac, for instance, will compound interest quarterly on terms of six months or longer if you choose that option.

Compounding is the better earner over time, because interest on interest adds up. There is a catch. Some banks quote a slightly lower rate when interest is paid monthly rather than compounded or paid at maturity, since you get the use of the money earlier. Always compare rates on the same payment basis: a 4.05% rate with interest at maturity is not quite the same product as 4.05% paid monthly, and the gap between two banks can come down to this detail rather than the headline number.

Tax: RWT on a standard term deposit

Interest from a standard term deposit is taxed through resident withholding tax (RWT), which the bank deducts before paying you. Inland Revenue says individuals can choose an RWT rate of 10.5%, 17.5%, 30%, 33% or 39%, and the right choice matches your income tax rate. If you gave the bank your IRD number but never picked a rate, it must deduct at 33%. Never given the bank your IRD number at all? The non-declaration rate of 45% applies. Choosing too low a rate does not save tax in the end; it just means a bill when your income is squared up for the year.

For reference, personal income tax rates from 1 April 2025 are 10.5% on income up to $15,600, 17.5% up to $53,500, 30% up to $78,100, 33% up to $180,000 and 39% above that. Our guide to tax rates in NZ walks through the brackets in full.

PIE term deposits: the tax shortcut worth checking

Most of the big banks sell a twin product that works like a term deposit but is structured as a portfolio investment entity (PIE): BNZ’s Term PIE, ANZ’s PIE Fund Term Option, ASB’s Term Fund and Kiwibank’s PIE Term Deposit. The money is invested for a fixed term at a fixed rate, much like an ordinary term deposit. The difference is the tax. PIE income is taxed at your prescribed investor rate (PIR), and for individuals the options are 10.5%, 17.5% and 28%. The rate is capped at 28%, full stop.

That cap is the whole point. If your income tax rate is 30%, 33% or 39%, a standard term deposit loses that slice of every interest payment to RWT, while the PIE version loses at most 28%. ASB puts it plainly on its own page: if your tax rate is 30% or higher, its PIE Term Fund may give better after-tax returns than a term deposit, at the same interest rates, terms and fees. BNZ’s published Term PIE rates were identical to its term deposit rates on the day checked, so the tax saving was not being clawed back in a lower rate.

A worked example shows the difference. Put $50,000 away for one year at 4.05% and the gross interest is $2,025. Taxed at 33%, you keep $1,356.75. Taxed at a 28% PIR, you keep $1,458. Same deposit, same rate, $101.25 more in your pocket. The gap grows with the size of the deposit and with your tax rate.

PIE deposits have their own fine print. You must give the provider your IRD number and your PIR, and if you do not provide a PIR the default rate of 28% applies. Kiwibank’s PIE term deposits start at $10,000 rather than $1,000, run for terms of up to twelve months only, and pay returns at maturity. BNZ’s Term PIE starts at $2,000 with terms from 30 days. Check the structure suits you before choosing the PIE version purely for tax.

Breaking a term deposit early

Life does not always respect maturity dates. Every bank will consider an early withdrawal, but none of them makes it free, and the terms differ more than the marketing suggests.

• ASB asks for 31 days’ notice of an early withdrawal, or an application to break the deposit for exceptional circumstances.
• ANZ allows early withdrawal with 31 days’ notice or in cases of hardship. It reduces the interest rate on the amount withdrawn, with the return never dropping below 0%.
• BNZ reduces the interest you earn based on how much of the term is left. Break with 80% or more of the term still to run and only 10% of your interest rate is paid on the withdrawn amount. Break with under 20% remaining and 80% of the rate is paid.
• Westpac may agree to an early withdrawal at a reduced interest rate. It also offers a specific access option on terms of twelve months or more: take out up to 20% of what you invested, once, without losing accrued interest, with 32 days’ notice and a remaining balance of at least the $5,000 minimum.
• Kiwibank applies an early termination charge if you withdraw before maturity.

Two more protections are easy to miss. Westpac gives a seven working day cooling-off period after you take out a term deposit, and ANZ gives seven calendar days to cancel or change a PIE term investment after it is opened or reinvested. If you have just locked money away and had second thoughts, act inside that window.

The practical lesson is to keep an emergency buffer in an ordinary savings account. Money you might need at short notice does not belong in a fixed term.

Is your money safe? The Depositor Compensation Scheme

New Zealand savers used to rely on a bank simply not failing. Since 1 July 2025 there has been a formal safety net. The Depositor Compensation Scheme (DCS), set up under the Deposit Takers Act 2023 and administered by the Reserve Bank, protects depositors if a deposit taker fails. In the Reserve Bank’s words, the scheme covers up to $100,000 per depositor, per deposit taker, across standard banking products including transaction, savings, notice and term deposit accounts.

Cover is automatic. You do not apply for it, and you do not pay for it directly; the scheme is funded by levies on deposit takers. ASB confirms on its term deposit page that eligible ASB deposits are protected by the scheme up to $100,000 per customer.

The limit shapes how larger savers should think. Hold $250,000 with one bank and only the first $100,000 is protected if that bank fails. Split the same money across three unrelated deposit takers and each slice sits under its own $100,000 limit. The cap is per deposit taker, not per account, so three term deposits at the same bank do not multiply your cover. Balances above the cap rank as ordinary claims in a failure rather than guaranteed payouts, with no promise about how much comes back or how long it takes.

What happens at maturity

A term deposit does not simply stop. As the maturity date approaches, the bank acts on the instructions you gave when you opened it: pay the principal and interest into your nominated account, reinvest the lot for another term, or reinvest the principal and pay out the interest.

If you gave no instructions, doing nothing can mean automatic reinvestment. ANZ advises its term deposit customers that it will automatically reinvest the deposit, at whatever rate applies on the day, which may be much lower than the rate you originally signed up for. Kiwibank lets you change your maturity instructions online before the term ends, and a diary reminder a week out is worth setting so you can shop around while you still have choices. Grace periods and cooling-off rules on rollovers vary, so check the specific terms rather than assuming you can unwind a reinvestment for free.

Comparing term deposits beyond the headline rate

The rate gets the advertising. The details decide whether it was a good deal. Before investing, work through these points:

• Compare like with like. Same term, same day, same payment frequency, same deposit size band. A special rate for new money or app users may beat the standard card.
• Run the after-tax numbers. At a 30% marginal rate or higher, a PIE deposit at the same headline rate beats a standard deposit. At 17.5%, it does not.
• Check the minimum. A rate you cannot reach because the minimum is $10,000 is not your rate.
• Read the break rules. Notice periods run from 31 to 32 days among the big banks, and interest reductions bite hard on early breaks at some providers.
• Weigh the rate against your debts. Earning 4% before tax while paying much more on a credit card or personal loan is going backwards. Clearing expensive debt first is usually the better move, and it does your credit score no harm either.
• Stay under the DCS cap per institution if protection matters to you, and spread larger sums.
• Ask about the maturity default. Know whether your money rolls over automatically, and at what sort of rate.

FAQs

What is the best term deposit rate in NZ right now?

On the rates the banks themselves published in October 2026, the highest figures were at the longest terms: ASB featured 5.00% p.a. for five years and BNZ published 4.70% p.a. for five years. For one year, BNZ and Kiwibank both showed 4.05% p.a. Rates change constantly, so treat these as a snapshot and confirm the live rate before investing.

How much money do I need to open a term deposit?

Minimums range from $1,000 at Kiwibank and $2,000 at BNZ to $5,000 at ASB and Westpac and $10,000 at ANZ. PIE versions can start higher: Kiwibank’s PIE term deposit starts at $10,000.

Can I get my money out before the term ends?

Usually yes, but only with the bank’s agreement, typically after 31 or 32 days’ notice or in cases of hardship, and you will lose some or most of the interest on the amount withdrawn. The exact reduction differs by bank, so read the break terms before investing money you might need.

Is a PIE term deposit better than a normal term deposit?

It depends on your tax rate. PIE income is taxed at your prescribed investor rate, capped at 28%. If your income tax rate is 30% or higher, the PIE version usually leaves you better off after tax at the same headline rate. At 10.5% or 17.5%, a standard term deposit taxed through RWT is generally just as good.

Are term deposits guaranteed in New Zealand?

Eligible deposits, including term deposits, are protected up to $100,000 per depositor, per deposit taker under the Depositor Compensation Scheme, which has operated since 1 July 2025 and is administered by the Reserve Bank. Amounts above $100,000 at one institution sit outside the scheme.

What happens if I do nothing when my term deposit matures?

Depending on the bank and the instructions on file, the deposit may be paid out to your account or automatically reinvested for another term at the rate applying that day. Check your maturity instructions before the term ends.

Sources

• ASB term deposits (featured rates, minimums, early withdrawal, DCS): https://www.asb.co.nz/term-investments/term-deposit.html
• BNZ investment rates (term deposit and Term PIE rate cards): https://www.bnz.co.nz/personal-banking/investments/rates/
• BNZ early withdrawal interest reductions: https://www.bnz.co.nz/support/investments/term-deposits/making-an-early-term-deposit-withdrawal/
• Kiwibank term deposits and PIE term deposit terms: https://www.kiwibank.co.nz/personal-banking/investments/term-deposits/
• Kiwibank special term deposit rate: https://www.kiwibank.co.nz/
• ANZ term deposit terms, fees and early withdrawal: https://www.anz.co.nz/rates-fees-agreements/term-deposits/
• ANZ PIE Fund Term Option and cooling-off period: https://www.anz.co.nz/personal/accounts/pie-funds/
• Westpac term deposit (access option, cooling-off, compounding): https://www.westpac.co.nz/kiwisaver-investments/term-deposits-pie-investments/term-deposit/
• Reserve Bank of New Zealand, the Official Cash Rate: https://rbnz.govt.nz/monetary-policy/about-monetary-policy/the-official-cash-rate
• Reserve Bank of New Zealand, Deposit Takers Act and the DCS: https://www.rbnz.govt.nz/regulation-and-supervision/deposit-takers-act/overview-dta
• Inland Revenue, using the right RWT rate: https://www.ird.govt.nz/income-tax/withholding-taxes/resident-withholding-tax-rwt/using-the-right-rwt-tax-rate
• Inland Revenue, PIR rates for individuals: https://www.ird.govt.nz/income-tax/income-tax-for-individuals/types-of-individual-income/portfolio-investment-entity-income-for-individuals/nz-residents

Disclaimer

This article is general information about how term deposit products work in New Zealand. It is not financial advice, and it does not take your personal circumstances into account. Rates shown were published by the providers named, were read from their websites in October 2026, and can change at any time. Check the current rate and the product terms with the provider before investing, and consider talking to a licensed financial adviser about whether a term deposit suits your situation.