The cheapest KiwiSaver fund in New Zealand is Simplicity’s Growth Fund — an annual management fee of 0.31%, no administration fee, and a passive (index) investment approach.
For most working-age members in a growth fund, Simplicity is the lowest all-in cost available from a credible, large NZ KiwiSaver provider. But “cheapest” isn’t the only thing that matters — this guide explains the full picture.
The Verdict: Simplicity at 0.31%
Simplicity’s KiwiSaver scheme charges a flat 0.31% management fee across all its funds (Conservative, Balanced, Growth, and Income). There is no administration fee. No performance fee. The 0.31% is the total cost.
For comparison:
- The average NZ KiwiSaver management fee is approximately 0.70%–0.90%
- Many bank provider funds (ANZ, Westpac) charge 0.85%–1.10%
- Fisher Funds charges up to 1.45%
On a $60,000 balance:
| Provider | Annual fee | Annual cost |
|---|---|---|
| Simplicity | 0.31% + $0 | $186 |
| BNZ | 0.35% + $18 | $228 |
| ASB | 0.85% + $0 | $510 |
| ANZ | 0.95% + $0 | $570 |
| Milford | 1.05% + $36 | $666 |
| Fisher Funds | 1.20% + $36 | $756 |
Simplicity’s fee advantage: $324–$570/year on a $60,000 balance compared to major bank providers.
Why Simplicity Can Charge Less
Simplicity uses passive (index) fund management. Instead of employing analysts and portfolio managers to pick individual stocks, Simplicity’s funds track broad market indices — the NZX, ASX, global equity indices, and bond markets.
Index funds cost less to manage because:
- No active research required
- Lower transaction costs (less buying and selling)
- Predictable returns tracking the benchmark
- Smaller team required to operate
Simplicity is also a not-for-profit. Surpluses are donated to charity rather than paid as provider profit. This structural advantage allows it to charge fees that would be commercially unsustainable for a profit-oriented active manager.
Cheapest by Fund Type
Different fund types have different fees at the same provider. Here’s where to find the lowest cost option for each fund type:
| Fund type | Cheapest option | Fee |
|---|---|---|
| Cash / defensive | Simplicity Conservative or BNZ | 0.31%–0.30% |
| Conservative | Simplicity or BNZ | 0.31%–0.30% |
| Balanced | Simplicity or BNZ | 0.31%–0.30% |
| Growth | Simplicity | 0.31% |
| High growth / aggressive | Simplicity Growth or BNZ | 0.31%–0.35% |
| Ethical / SRI | Simplicity (ESG integrated) | 0.31% |
Simplicity is the cheapest across the board due to its flat fee structure. BNZ is the cheapest among bank providers and competitive with Simplicity once its $18 administration fee is factored in at higher balances.
Does “Cheapest” Mean “Best”?
Not always. A cheaper fund that significantly underperforms the market delivers less money at retirement — even after accounting for lower fees.
The key comparison is after-fee returns, not just fees.
Consider:
- Simplicity Growth returned X% (after its 0.31% fee) over 5 years
- Milford Active Growth returned X+0.5% after its 1.00% fee over the same period
If Milford consistently delivered 0.5% higher after-fee returns than Simplicity, the higher fee would be worth it. The problem is that very few active managers consistently outperform passive alternatives after fees over long periods — and past performance doesn’t reliably predict future performance.
The FMA’s annual KiwiSaver report is the most authoritative NZ source for after-fee, risk-adjusted returns by provider and fund type. For current data, see our KiwiSaver fund performance comparison.
When a Slightly More Expensive Provider Is Worth It
Cheapest isn’t always the right choice. Consider paying a modest premium if:
You want dedicated ethical screening
Simplicity integrates ESG principles but doesn’t offer a separate, strictly screened ethical fund. If you want exclusion of specific industries (weapons, tobacco, fossil fuels) with verified screening, Booster’s Socially Responsible range or Pathfinder may be worth the extra 0.50%–0.70%. See our ethical KiwiSaver providers comparison.
You value specific digital tools
Booster’s MyBooster app offers more detailed portfolio insight than Simplicity’s platform. For some members, this functionality has real value.
Your balance is small and flat fees matter more
At very small balances (under $5,000), Simplicity’s percentage-only fee model is optimal — there’s no flat admin fee eroding a small pot. But once your balance grows, the fee differential between Simplicity and a flat-fee provider like BNZ ($18/year) becomes less significant in percentage terms.
The Long-Term Fee Impact
On a $30,000 starting balance, 7% gross return, 25 years to retirement:
| Provider | Fee | Projected balance | Total fees over 25 years |
|---|---|---|---|
| Simplicity | 0.31% | ~$151,000 | ~$15,000 |
| BNZ | 0.35% | ~$149,000 | ~$16,500 |
| ASB | 0.85% | ~$133,000 | ~$32,000 |
| ANZ | 0.95% | ~$130,000 | ~$35,000 |
| Fisher Funds (higher) | 1.20% | ~$124,000 | ~$42,000 |
The difference between Simplicity and Fisher Funds over 25 years on this scenario: approximately $27,000 in final balance — from fees alone.
For the full fee comparison table across every provider and fund type, see our KiwiSaver fees comparison.
How to Switch to a Cheaper Provider
Switching KiwiSaver providers is free, takes about 10–35 business days, and preserves your balance, membership history, and all KiwiSaver entitlements. You do not need to notify your employer — they continue contributing to your new provider automatically once the switch is processed.
Steps:
- Decide on your new provider and fund type
- Apply through the new provider’s website (takes 5–10 minutes)
- The new provider contacts your old provider and manages the transfer
- Your balance is transferred in approximately 10–35 business days
For the full process and common questions, see our switching KiwiSaver providers guide.
Frequently Asked Questions
Is Simplicity the cheapest KiwiSaver provider in NZ? Yes, for most fund types and balance sizes. Simplicity charges 0.31% with no administration fee — the lowest all-in cost from a large credible NZ provider. BNZ is close (0.30%–0.50% + $18/year) and is the cheapest bank option.
Is a cheap KiwiSaver fund safe? Fee level has no relationship to fund safety. Simplicity, like all KiwiSaver providers, is regulated by the FMA and holds member funds in a supervised trust structure. The investment risk (volatility of returns) depends on the fund type (growth vs conservative), not the fee level.
Does a cheaper KiwiSaver fund mean worse performance? Not necessarily. Academic research consistently shows that, on average, low-cost passive funds match or outperform higher-cost active funds after fees over long periods. Some active managers do outperform — but it’s not the norm, and identifying them in advance is difficult.
Are there any costs when I switch to a cheaper provider? No. Switching KiwiSaver providers is free by law. Your new provider handles the transfer at no charge. Break fees, exit penalties, and similar charges are prohibited for KiwiSaver scheme transfers.
Should I switch to Simplicity if I’m 2 years from retirement? This is more about fund type than provider. Regardless of provider, you should be reviewing whether you’re in an appropriate fund for your timeline (likely conservative or balanced rather than growth). Switching providers close to 65 is generally fine — but if you’re withdrawing soon, don’t initiate a switch in the weeks immediately before your withdrawal application to avoid any timing complications.
What to Read Next
- KiwiSaver Fees Comparison NZ — full fee table across all providers
- Simplicity KiwiSaver Review — detailed review of the cheapest provider
- BNZ KiwiSaver Review — cheapest bank provider
- Best KiwiSaver Providers NZ — full provider comparison
- KiwiSaver Fund Performance Comparison — after-fee returns by provider
- Switching KiwiSaver Providers — how to move to a lower-fee option
- How to Choose a KiwiSaver Fund — fund type guidance