Term Deposit Rates
- Written by Willi Olsen
- Updated
Compare term deposit rates and learn how term deposits can help compound your wealth.
Earn over 6% p.a. with top term deposits from trusted banks.
What's new in term deposit rates for February 2024?
The Reserve Bank of New Zealand (RBNZ) board agreed on 28 February 2024 to hold the official cash rate (OCR) at 5.5%. New Zealanders will need to wait patiently until the next board meeting on 10 April to see if any cash rate changes in April could affect their savings.
Most economists think the OCR has peaked for this cycle and that the next move will be a cut.
New Zealanders wanting to make the most of their savings this year may need to wait for their current term deposit to reach maturity, allowing them to switch to an alternative option.
Best 3-month term deposit rates
| Bank | Interest rate (p.a.) | Interest paid | Minimum opening deposit |
|---|---|---|---|
ANZ | 4.20% p.a. | At maturity | $10,000 |
ASB | 4.20% p.a. | At maturity | $5,000 |
Bank of China | 4.75% p.a. | Compounded monthly | |
Bank of India | 4.60% p.a. | At maturity | $300,000 |
BNZ | 4.20% p.a. | At maturity | $2,000 |
China Construction Bank | 5.15% p.a. | At maturity | $100,000 |
Co-Operative Bank | 4.20% p.a. | At maturity | $2,000 |
Heartland Bank | 4.25% p.a. | At maturity | $1,000 |
ICBC | 4.10% p.a. | At maturity | $5,000 |
Kiwibank | 5.95% p.a. | At maturity | $5,000 |
Rabobank | 6.15% p.a. | At maturity | $1,000 |
TSB | 4.25% p.a. | At maturity | $1,000 |
Westpac | 4.20% p.a. | At maturity | $5,000 |
Best 6-month term deposit rates
| Bank | Interest rate (p.a.) | Interest paid | Minimum opening deposit |
|---|---|---|---|
ANZ | 6.00% p.a. | Quarterly compounding interest
added automatically to your original investment | $10,000 |
ASB | 6.10% p.a. | At maturity | $5,000 |
Bank of Baroda | 6.00% p.a. | Compounded monthly | $5,000 |
Bank of China | 5.70% p.a. | at maturity | $300,000 |
Bank of India | 4.80% p.a. | At maturity | $300,000 |
BNZ | 6.00% p.a. | At maturity | $2,000 |
China Construction Bank | 5.70% p.a. | At maturity | $100,000 |
Co-Operative Bank | 6.05% p.a. | At maturity | $2,000 |
Heartland Bank | 6.05% p.a. | At maturity | $1,000 |
ICBC | 3.10% p.a. | At maturity | $5,000 |
Kiwibank | 4.10% p.a. | At maturity | $5,000 |
Rabobank | 5.05% p.a. | At maturity | $1,000 |
SBS | 6.05% p.a. | At maturity | $1,000 |
TSB | 5.90% p.a. | At maturity | $1,000 |
Westpac | 6.10% p.a. | At maturity | $5,000 |
Best 12-month term deposit rates
| Bank | Interest rate (p.a.) | Interest paid | Minimum opening deposit |
|---|---|---|---|
ANZ | 6.10% p.a. | Quarterly compounding interest
added automatically to your original investment | $10,000 |
ASB | 6.10% p.a. | At maturity | $5,000 |
Bank of Baroda | 6.10% p.a. | Compounded monthly | $5,000 |
Bank of China | 6.00% p.a. | at maturity | $300,000 |
Bank of India | 5.25% p.a. | At maturity | $300,000 |
BNZ | 6.10% p.a. | At maturity | $2,000 |
China Construction Bank | 5.90% p.a. | At maturity | $100,000 |
Co-Operative Bank | 6.00% p.a. | At maturity | $2,000 |
Heartland Bank | 6.30% p.a. | Quarterly | $1,000 |
ICBC | 4.60% p.a. | At maturity | $5,000 |
Kiwibank | 6.05% p.a. | At maturity | $5,000 |
Rabobank | 6.30% p.a. | At maturity | $1,000 |
SBS | 6.15% p.a. | At maturity | $1,000 |
TSB | 6.00% p.a. | At maturity | $1,000 |
Westpac | 6.00% p.a. | At maturity | $5,000 |
Wonder how much money you can make on a term deposit? Calculate your term deposit returns.
How to choose the best term deposit option
Interest rate
The interest rate on a term deposit dictates the return on your money. Many people prioritise finding the highest rate available. However, based on other factors explained here, a term deposit with a lower rate could be more suitable in some situations.
The term
The interest rate you earn on a term deposit can vary widely depending on the duration. This is often the case even on accounts from the same bank or credit union. Some providers offer shorter terms (e.g., one month to two years), whereas others offer one month to five years. When you invest in a term deposit, you cannot withdraw your money until the end of the term without incurring penalties. Therefore, choosing an appropriate term is crucial.
Interest payment frequency
For some savers, how often you receive interest payments is particularly important. An example could be if you rely on the interest payments as income for day-to-day living. Just bear in mind that term deposits paying interest more frequently often have a reduced interest rate.
Min and max deposit
Check how much the bank allows you to deposit and whether the top interest rate only applies to deposits above a certain amount. Where there is a maximum deposit amount, check if that applies per customer or account. It might be possible to distribute your funds among several term deposit accounts.
Rules (and penalties) for early withdrawal
Ideally, you will choose a term that matches your plans for the money deposited. However, it’s worth checking what happens (and what it will cost you) if you need to withdraw the money early for any reason. Early withdrawal generally reduces interest rates and/or additional fees.
Reinvestment options
Some term deposits allow you to build on your savings by reinvesting (compounding) the interest earned. Also, consider what happens when the term ends or matures and what options the bank offers. Some banks offer a loyalty bonus if you roll your deposit into a new term.
Get financial advice if you’re unsure
Term deposits are generally considered lower risk than other investments. However, you may still benefit from financial advice before deciding if investing in a term deposit is right for you and which type of account will be best.
Term deposit versus savings account
- Fixed interest rate
- Options of fixed interest terms between between 1 month – and 5 years
- Penalties apply if you withdraw your money before the end of the term
- Variable interest rate
- No set time frame
- You can withdraw your money at any time
How to open for a term deposit
You can open a new term deposit account online through the financial institution’s website. Assuming you’re eligible and have your ID handy, this should only take a few minutes.
To open a term deposit, you’ll generally need to:
- Be a New Zealand resident with a New Zealand address.
- Be 18 years of age or older.
- Provide information from your identity documents (New Zealand Passport, driver’s licence, tax ID or RealMe) to prove your identity.
- Provide a tax file number if you want the bank to refrain from withholding tax on interest paid.
What is a term deposit?
Term deposits are low-risk, long-term investment products. With a term deposit, you deposit a lump sum in a financial institution for a set term, ranging from one month to five years, in exchange for a fixed interest rate.
Many term deposits allow you to choose when you want the interest to be paid, e.g. fortnightly, monthly, annually, or at maturity (the end of the term).
Term deposits are popular among risk-averse investors who want a near-guaranteed return on their investment.
When your term deposit ends (matures), you typically have two choices: withdraw your cash plus interest or roll it over into a new term deposit, which could offer a different rate from the lender.
Government guarantee on term deposits
Parliament passed the Deposit Takers Bill in June 2023, which became law.
The New Zealand Reserve Bank will introduce a Depositor Compensation Scheme (DCS) in mid-2025 to comply with the Deposit Takers Bill.
To strengthen and protect the financial system, New Zealanders will have up to $100,000 of their deposits in any eligible institution guaranteed if an institution fails.
Because of the government guarantee, term deposits are generally considered very low-risk investments, though they offer low returns.
Key Points:
- The Reserve Bank will bring in a new depositor compensation scheme from mid-2025.
- The scheme will protect up to $100,000 of each customer’s money in each bank, credit union, building society or finance company (deposit takers).
- The scheme was created under the Deposit Takers Act, passed into law in July 2023.
- Banks and other deposit takers will pay for the scheme, backed by the Government.
Term Deposit Rates FAQ's
How do term deposits work?
When you open a term deposit account, you lock away an agreed-upon amount of money for an agreed-upon time. You can only access your deposited money once the term is up in exchange for a guaranteed interest rate.
What are the benefits of a term deposit?
The main benefit of a term deposit is the guaranteed fixed interest rate. Should interest rates move lower, you are still guaranteed the return during the term.
The other benefit is that your money is locked away, and you can’t spend the money on an impulsive buy.
When would a term deposit be the best banking choice?
A term deposit may be the best banking choice if you are saving for a goal with a specific timeline in mind. To avoid early withdrawal penalties or potentially forfeiting any interest earned on the funds in your term deposit, you want to be sure that you will only need access to your money after your term deposit maturity date.
You can use internet banking with most banks to calculate your rate of return.
