Use the calculator below to see exactly how much interest your term deposit will earn, what the maturity value will be, and your after-tax return at your Prescribed Investor Rate (PIR).
$50,000 in a 12-month term deposit at 4.5% earns $2,250 before tax. After PIR tax at 28% (income $70k–$180k), that's $1,620 net — an after-tax return of 3.24%. PIE term deposits apply PIR rather than your marginal tax rate, which saves higher earners money. Smaller banks like Rabobank and SBS consistently offer 0.3–0.6% more than the big four.
Term Deposit Calculator
Current Term Deposit Rates — April 2026
| Bank | 6 months | 12 months | 18 months |
|---|---|---|---|
| Rabobank | 4.55% | 4.80% | 4.60% |
| SBS Bank | 4.50% | 4.75% | 4.55% |
| TSB | 4.45% | 4.65% | 4.50% |
| Co-operative Bank | 4.40% | 4.60% | 4.45% |
| Kiwibank | 4.25% | 4.45% | 4.30% |
| BNZ | 4.10% | 4.25% | 4.15% |
| ANZ | 4.05% | 4.20% | 4.10% |
| ASB | 4.05% | 4.20% | 4.10% |
| Westpac | 4.05% | 4.20% | 4.10% |
Always verify current rates directly with the institution.
What Is a PIR and How Does It Affect My Term Deposit Return?
Your Prescribed Investor Rate (PIR) is the tax rate applied to returns from PIE investments — including PIE term deposits. It’s based on your income over the last two tax years.
| PIR | Income threshold |
|---|---|
| 10.5% | Income under $14,000 (or total income under $48,000 with no more than $14,000 from other sources) |
| 17.5% | Income $14,001–$48,000 |
| 28% | Income over $48,001 |
Important: If you use a standard (non-PIE) term deposit, interest is taxed at your marginal rate — 33% if you earn $70,001–$180,000, or 39% above that. Choosing a PIE term deposit at the same gross rate will deliver a better after-tax return for anyone earning over $70,000.
Example: $100,000 at 4.5%, 12 months, income $120,000
| Account type | Gross interest | Tax | Net interest |
|---|---|---|---|
| Standard term deposit | $4,500 | $1,485 (33%) | $3,015 |
| PIE term deposit | $4,500 | $1,260 (28%) | $3,240 |
| PIE advantage | — | — | +$225/year |
Interest Payment Options — Which Should You Choose?
At maturity: Interest paid as a lump sum at the end of the term. Best for compounding — if you reinvest immediately, the full balance (including interest) rolls into the next term.
Monthly/quarterly: Interest paid to a nominated account during the term. Useful if you want the income for living expenses. Slightly less efficient for compounding since the interest sits in a lower-rate account between payments.
Annually: Middle ground — less frequent than monthly, allows partial compounding on multi-year terms.
For wealth building: choose “at maturity” and immediately roll the full balance (principal + interest) into the next term.
Term Deposit Ladder Strategy
A ladder spreads your deposits across different maturities so you always have money becoming available:
| Deposit | Amount | Term | Matures |
|---|---|---|---|
| 1 | $20,000 | 3 months | July 2026 |
| 2 | $20,000 | 6 months | October 2026 |
| 3 | $20,000 | 9 months | January 2027 |
| 4 | $20,000 | 12 months | April 2027 |
After the first year, roll each maturing deposit into a 12-month term. You’ll then have $20,000 maturing every 3 months — access to funds quarterly while still earning competitive 12-month rates.
Frequently Asked Questions
How is term deposit interest taxed in NZ?
Standard term deposit interest is added to your income and taxed at your marginal rate (10.5%–39%). PIE term deposits are taxed at your PIR (10.5%, 17.5%, or 28%) — better for higher earners. Ask your bank specifically about PIE term deposits.
Can I add money to a term deposit during the term?
No — term deposits are fixed. You deposit a set amount for a set term, and no additional funds can be added. If you have more money to invest, you open a separate term deposit.
What happens when my term deposit matures?
Most banks auto-roll to the same term at the current market rate unless you instruct otherwise. Set a reminder 2 weeks before maturity to compare rates across banks and decide whether to roll, withdraw, or switch.
Can I break a term deposit early in NZ?
Yes, but expect a penalty. Banks apply an early repayment adjustment — typically reducing your rate by 1.0–2.0% for the period held. In some rate environments, this can mean receiving less than if you’d used a savings account. Read your specific terms before committing.
What is the minimum deposit for a term deposit in NZ?
Most NZ banks require $1,000–$5,000 minimum. Check with your specific bank. Some institutions (especially online-only) may require higher minimums.