Changing your KiwiSaver fund type is one of the most impactful — and most neglected — financial decisions you can make. Many New Zealanders are in the wrong fund type for their situation and don’t know it. Here’s everything you need to know to switch correctly.
Why Changing Fund Type Matters
The difference between fund types is enormous over time. A $50,000 balance in a conservative fund vs a growth fund over 25 years (assuming ~3% vs ~7% annual return):
| Fund type | $50,000 at age 40 → age 65 |
|---|---|
| Cash/Conservative (~3%) | ~$104,000 |
| Balanced (~5%) | ~$169,000 |
| Growth (~7%) | ~$271,000 |
That’s a $167,000 difference from the same starting balance — purely from fund type choice.
If you’ve never actively chosen your fund type, you may be in a default fund that doesn’t match your situation. See KiwiSaver fund types explained for the full breakdown of each fund type.
When Should You Change Your Fund Type?
You should switch to a higher-growth fund if:
- You’re in a conservative or balanced fund with 15+ years until retirement
- You were defaulted into KiwiSaver and never actively chose your fund
- You previously switched to conservative/cash before a market dip and haven’t switched back
- You’ve just bought a first home and your KiwiSaver balance has reset — you’re now investing purely for retirement
You should switch to a lower-risk fund if:
- You’re planning to use your KiwiSaver for a first home purchase in 3–5 years
- You’re within 5–7 years of retirement (65) and want to reduce sequence-of-returns risk
- You’re in your early 60s and can’t afford to see your balance drop 30% in a bad market year
Don’t switch because:
- The market has just fallen — selling after a crash locks in losses; growth funds recover
- The market has just risen strongly — you’re chasing performance; this is market timing and rarely works
- A friend or colleague says to — your fund type should match YOUR time horizon and risk tolerance, not someone else’s
See how to choose a KiwiSaver fund and conservative vs balanced vs growth by age.
How to Change Your Fund Type (Step by Step)
Option A: Switch within your current provider (most common)
This is faster and simpler than switching providers. Most providers allow this online.
- Log in to your KiwiSaver provider’s online portal or app
- Find the fund switch option — usually under “My Account”, “Investments”, or “Settings”
- Choose your new fund type — growth, balanced, conservative, etc.
- Confirm the switch — no fee, no paperwork required
- Timeline: 1–5 business days for the switch to take effect
Most providers allow fund switches online 24/7. Some may require a phone call or written request for certain fund changes.
Option B: Switch provider and fund type simultaneously
If you want to change both your provider and fund type at the same time:
- Apply with your new provider — complete their online application and choose your preferred fund
- The new provider contacts your old provider to initiate the transfer
- Your balance transfers — 10–15 working days; your money is out of the market during this period
- Contributions redirect to the new provider
You don’t need to notify your old provider or do anything beyond applying with the new one.
How Long Does a Fund Switch Take?
| Action | Timeframe |
|---|---|
| Switching fund within same provider | 1–5 business days |
| Switching provider (new provider handles transfer) | 10–15 working days |
During a provider transfer, your balance is out of the market. This is a minor consideration for long-term investors but worth knowing — avoid switching providers the week before a known market-moving event if you’re concerned about timing.
Does It Cost Anything to Switch?
No — there are no fees to switch fund types or providers in KiwiSaver.
Some providers charge a transaction fee on the units sold to fund the switch (this is different from an exit fee — it’s built into the unit price). Most modern KiwiSaver providers have eliminated transaction fees entirely. Check with your provider if uncertain.
You do not lose government contributions (MTC) or employer contributions by switching.
Common Mistakes When Switching
Switching to cash/conservative after a market fall
This is the most damaging mistake. When markets fall 25%, people panic and switch to cash — locking in the loss. Then when markets recover, they’re in cash and miss the rebound. The net effect is buying high, selling low, and buying high again.
If you’re in growth and markets fall: don’t switch unless your time horizon has genuinely changed.
Switching to growth just before retirement
Going fully into growth with 2–3 years to retirement exposes you to catastrophic sequence-of-returns risk. A 30% market drop the year before you retire means retiring with 30% less — with no recovery time.
Never switching at all
Equally problematic. If you were auto-enrolled at 22 into a conservative default fund and never changed it, you’re now 40 and have missed 18 years of growth-fund returns.
Switching provider every year chasing performance
KiwiSaver is a long-term investment. Switching providers based on 1-year performance tables is a form of performance chasing — you typically end up buying last year’s winner, which often underperforms going forward.
What Happens to Your Balance During a Switch?
Within the same provider
Your units in the old fund are sold and units in the new fund are purchased. The switch typically takes 1–5 business days. There’s a brief period where your money is held in cash between the two fund purchases.
Switching providers
Your balance is transferred as cash from your old provider to your new provider, who invests it in your chosen fund. During the transfer period (10–15 working days), your money is not invested and will not earn market returns or losses.
Frequently Asked Questions
Can I split my KiwiSaver between multiple fund types? Some providers allow you to split your balance across multiple funds (e.g. 50% growth, 50% balanced). This varies by provider — Simplicity and most bank providers do not offer split allocations; some providers like SuperLife and Kernel do. Check with your provider.
Will switching fund type affect my MTC? No — the member tax credit is based on how much you contribute, not which fund type you’re in. Switching funds has no effect on MTC eligibility.
How do I know what fund type I’m currently in? Log in to your provider’s online portal — your current fund type should be displayed on your dashboard. Alternatively, check your most recent annual statement or call your provider.
Can I switch fund type before making a first home withdrawal? Yes — and for most members approaching a home purchase, you should. Switching from growth to balanced or conservative 3–5 years before your planned purchase protects your deposit from a bad market year. See KiwiSaver as a house deposit.
Is there a limit on how many times I can switch? No — you can switch fund types as often as you like. However, frequent switching (especially in response to market movements) is generally counterproductive.