If you have money sitting in an everyday bank account earning next to nothing, a term deposit is one of the simplest ways to put it to work. You lock a lump sum away for a set period — anywhere from one month to five years — and the bank pays you a fixed rate of interest for the whole term. No markets to watch, no fees, and no surprises on the rate you get.

This guide compares term deposit rates from every major New Zealand bank and finance company, using the same daily-refreshed data that powers our dedicated term deposit rates page. The full sortable market table below updates automatically whenever rates move — no manual editing, no stale numbers.

You'll also find a plain-English rundown of how term deposits work, what the Reserve Bank's recent moves mean for your returns, and a practical way to choose a term that genuinely suits your goals.

Why Term Deposit Rates Matter for Kiwis Right Now

Rates are climbing again. On 2 September, the Reserve Bank raised the official cash rate (OCR) by 25 basis points to 2.75 per cent — the second increase in a row — and signalled that at least one more rise is likely before the end of the year.

The trigger is inflation, which jumped to 4.1 per cent in the year to June after fuel prices spiked during the Middle East conflict. Stripping out vehicle fuel and inflation, inflation was running at 2.9 per cent, with most core measures back inside the Reserve Bank's 1–3 per cent target band.

What does that mean for savers? It means the low point for term deposit rates is behind us, and institutions are starting to compete harder for deposits. Even so, term deposit rates tend to lag the OCR. Banks are quick to pass higher funding costs on to mortgage borrowers, but noticeably slower to lift what they pay on term deposits. That is why the "special" rates you see advertised can sit well above what your own bank quietly offers on renewal — and why comparing across institutions matters more than ever.

The numbers as at early September:

  • OCR: 2.75 per cent, after back-to-back 25-basis-point hikes in July and September, with markets expecting a move to 3 per cent later in the year.
  • Headline inflation: 4.1 per cent in the year to June, per Stats NZ — but 2.9 per cent excluding vehicle fuel.
  • Reserve Bank outlook: inflation back at the 2 per cent target midpoint by the end of 2027.

The practical takeaway: if rates are still heading up, the shortest terms let you reinvest at higher rates sooner, while longer terms lock in today's rates before any further increases land.

How We Researched This Guide

The rates in the table below come from the same daily-refreshed dataset that powers our live term deposit rates page — every bank, building society and finance company we track, across all ten standard terms. The data updates on business days, so when a provider reprices, the table updates accordingly.

We do not pick favourites or rank the list. As you browse, every institution we monitor appears, and the best rate in each column is highlighted for you. Rates change often; the mechanics do not.

Beyond the numbers, we have explained how term deposits actually behave in New Zealand — how resident withholding tax is deducted, what breaking early really costs, why OCR moves take weeks to reach your deposit, and how the Depositor Compensation Scheme protects your money. Before you lock anything in, confirm the rate, term and conditions directly with the provider.

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The 60-Second Version

Here is the short Version before you dive into the details.

  • Rates are climbing again. The OCR sits at 2.75 per cent after two back-to-back hikes, and term deposit rates are starting to follow — slowly.
  • Compare, do not renew on autopilot. The rate your own bank offers on rollovers is often lower than what new customers can get elsewhere.
  • No single bank wins every term. Different institutions frequently offer the best short-term and five-year rates.
  • Match the term to the goal. Short terms for money you might need soon, one-to-two years for most savings goals, longer terms only for money you will not touch.
  • Your money is protected up to $100,000 per institution under the Depositor Compensation Scheme.

Keep reading — the full market table is below, followed by the plain-English detail on how term deposits work, what the rate cycle means for you, and how to choose a term that fits.

What You Need to Know Before Choosing a Term Deposit

A term deposit is a straightforward contract. You give a bank or finance company a fixed amount of money for a fixed term, and it pays you a fixed interest rate for that entire period. The interest is calculated on your original deposit — it does not compound inside the term — so to earn interest on your interest, you need to reinvest the interest payments or roll the whole balance over at maturity.

  • Terms: typically 1, 3, 6, 9, 12, 18, 24, 36, 48 and 60 months. Longer terms usually pay more, though not always.
  • Interest payments: often paid at maturity, or monthly/quarterly on longer terms where offered. You choose the rate before you lock in.
  • Tax (RWT): the bank deducts resident withholding tax before you receive your interest, at whatever rate you nominate. NZ income tax brackets run from 10.5 per cent to 39 per cent, so pick the rate closest to your actual tax rate and the tax return settles any difference at year-end.
  • Breaking early: most retail term deposits can be broken before maturity, but the bank charges a penalty — often some or all of the interest you would have earned for the remaining period. It can be cheaper to break a short remaining term than a long one, but never assume you can access the money penalty-free.
  • Callable vs non-callable: everyday term deposits in New Zealand are non-callable, meaning the bank cannot end the term early and demand repayment. Some wholesale and corporate deposits are callable — the issuer can repay early when rates fall — so if a higher-paying product is described as callable, ask exactly who holds the right to end it.
  • At maturity, most institutions automatically renew the deposit on similar terms unless you tell them otherwise. Watch the renewal notice and the rollover rate — it is often lower than the rate new customers get.

Deposit protection: since 1 July 2025, the Depositor Compensation Scheme protects eligible deposits — including term deposits — up to $100,000 per depositor, per licensed deposit taker (banks, building societies, credit unions, and licensed finance companies). Joint accounts are protected up to $100,000 per account holder. If you hold more than $100,000 in one institution, spreading it across a second licensed deposit taker extends your cover.

Compare Every Term Deposit Rate: the Full Market Table

The table below shows every term deposit rate we currently track across the New Zealand market — each provider, all 10 terms from 1 month to 5 years, plus the institution's credit rating and minimum deposit. It uses the same data as our dedicated term deposit rates page and refreshes daily on business days.

Click any column to sort the whole market by that term, with the best rate in each column highlighted. A dash means the institution does not currently offer that term; minimum deposits and credit ratings are indicative — confirm the fine print with the provider before you lock in.

Institution ↕ Rating Min ↕ 1 month ↕ 3 months ↕ 6 months ↕ 9 months ↕ 1 year ↕ 18 months ↕ 2 years ↕ 3 years ↕ 4 years ↕ 5 years ↕
AMP $1,000 — 2.90% 3.55% 3.65% 3.70% — 4.30% — — —
ANZ AA- $10,000 1.80% 2.90% 3.55% 3.65% 3.90% 4.20% 4.30% 4.40% 4.60% 4.70%
ASB AA- $5,000 1.80% 3.00% 3.55% 3.70% 3.90% 4.15% 4.20% 4.40% 4.60% 4.75%
Bank of Baroda BBB- $1,000 2.10% 3.10% 3.60% 3.60% 3.90% 4.00% 4.20% 4.50% 4.70% 4.90%
Bank of China A $100,000 2.20% 3.25% 3.75% 3.80% 4.00% 4.20% 4.30% 4.50% 4.70% 4.80%
Bank of India BBB- $5,000 1.85% 2.95% 3.45% 3.45% 3.70% 3.90% 4.25% 4.25% 4.30% 4.35%
BNZ AA- $2,000 1.85% 2.90% 3.55% 3.65% 4.05% 4.20% 4.20% 4.40% 4.60% 4.70%
China Construction Bank A $100,000 2.20% 2.70% 3.25% 3.35% 3.55% 3.70% 3.90% 4.15% 4.35% 4.45%
Christian Savings BB+ $10,000 2.30% 3.30% 6.00% 3.85% 6.00% 4.30% 4.40% 4.65% 4.80% 5.00%
Co-operative Bank BB+ $2,000 1.90% 2.90% 3.60% 3.70% 4.00% 4.20% 4.35% 4.60% 4.70% —
Finance Direct $1,000 — — 3.95% — 4.10% 4.45% 4.50% 4.60% 4.95% 5.00%
First Credit Union BB $500 — 3.20% 3.70% 3.80% 4.05% 4.25% 4.30% — — —
General Finance BB $2,000 — 3.40% 3.80% 4.00% 4.55% 4.80% 4.80% 4.90% 5.00% 5.25%
Gold Band Finance BB- $5,000 — — 3.90% 4.00% 4.50% 4.70% 4.85% 4.90% 5.00% 5.25%
Heartland Bank BBB $1,000 1.80% 2.90% 3.55% 3.65% 3.90% 4.20% 4.30% 4.40% 4.60% 4.70%
Heretaunga Building Society $1 — 3.05% 3.60% — 4.05% — 4.35% — — —
ICBC A $5,000 2.20% 3.20% 3.65% 3.75% 4.00% 4.15% 4.30% 4.55% 4.70% 4.85%
Kiwi Bonds AA+ $1,000 — — 3.00% — 3.25% — 3.50% — 3.75% —
Kiwibank A $1,000 1.90% 3.05% 3.50% 3.70% 4.00% — 4.30% 4.40% 4.60% 4.70%
Liberty Financial BBB $5,000 — 3.30% 4.00% 4.00% 4.40% 4.50% 4.60% 4.70% 4.80% 5.00%
Mutual Credit Finance B+ $5,000 — — — 4.00% 4.50% 4.70% 4.85% 5.05% 5.15% 5.30%
Nelson Building Society BB+ $5,000 1.55% 2.75% 3.40% 3.50% 3.90% 4.10% 4.30% 4.55% — —
Police Credit Union BB+ $500 — 2.75% 3.45% 3.55% 3.70% 3.80% 4.00% — — —
Rabobank AA- $1,000 2.00% 3.10% 3.65% 3.75% 4.05% 4.25% 4.40% 4.55% 4.75% 4.90%
SBS Bank BB+ $1,000 1.90% 3.00% 3.55% 3.70% 4.00% 4.10% 4.35% 4.50% — —
TSB Bank AA- $1,000 1.80% 3.00% 3.45% 3.60% 3.90% 4.00% 4.20% 4.50% 4.60% 4.70%
UnityMoney BB $1,000 1.80% 2.90% 3.45% 3.40% 3.35% 3.50% 3.55% 3.55% 3.55% 3.55%
Wairarapa Building Society BB+ $2,000 — 3.10% 3.65% 3.75% 4.20% 4.20% 4.45% — — —
Welcome B- $10,000 — — 4.00% 4.20% 4.40% 4.65% 4.80% 4.85% 5.00% 5.25%
Westpac AA- $5,000 1.80% 2.85% 3.45% 3.70% 3.90% 4.20% 4.30% 4.40% 4.60% 4.60%
Xceda Finance B+ $2,500 — — 3.75% 3.85% 4.10% 4.45% 4.50% 4.70% 4.80% 5.10%

Rates refreshed from market data on 7 September 2026. Updated daily on business days.

One pattern stands out as you scan the table: no single bank is consistently the cheapest across all terms. The best one-year rate and the best five-year rate are often held by different institutions — which is exactly why comparing the whole market beats renewing on autopilot.

How to Choose the Right Term Length

Match the term to when you need the money, not to the biggest headline rate:

  • Under 12 months — an emergency buffer or near-term cash: if this money might be needed at short notice, a short-term or high-interest savings account makes more sense than locking away your flexibility. See our guide to building an emergency fund.
  • 1–2 years — a specific savings goal: a first home deposit, car purchase or planned expense two years out. This range currently offers the best balance of rate and access, and it is where most of the market's competition sits.
  • 3–5 years — money with a long horizon: a slice of retirement savings, or funds you will not need for several years. Longer terms pay the most today, but only lock in if you are confident you will not need early access.

A useful mental test: if the rate on a five-year term looks too good to be true, ask yourself why the bank is willing to pay it. Usually, it is because the bank expects rates to keep climbing — which may be exactly the environment in which you would rather stay flexible.

Ladder Your Deposits for Flexibility

Laddering is the classic way to get longer-term rates without locking everything away at once. Instead of one $50,000 deposit for a single term, you split it into five $10,000 deposits with staggered maturities: one, two, three, four and five years.

Here is how it plays out:

  • Year one: the one-year rung matures. If you do not need the cash, reinvest it in a new five-year term. Your ladder now runs for two to six years, and you still have a rung maturing every year.
  • Every year after: one rung matures and is rolled into a fresh five-year term.
  • The result: you always have some money becoming available within 12 months, and the rest is earning longer-term rates.

Laddering also smooths out the rate cycle. When rates fall, only the maturing rung reinvests at the lower rate — the rest of your money keeps earning the higher rates you locked earlier. When rates rise, a rung matures every year, so you capture the increases quickly. It is a low-effort strategy that works well for balances of $20,000 or more; below that, the paperwork per rung can outweigh the benefit.

What to Ask Before You Lock In

Rates are only part of the story. Before you commit, run through this checklist with the bank or finance company:

  • Is this rate fixed for the entire term, and does it apply to my money — or is it a special for new deposits only?
  • What is the minimum deposit, and can I add more money during the term?
  • Can I withdraw before maturity, and what exactly does the break penalty cost?
  • How and when is interest paid — at maturity, monthly or quarterly? Where does it go?
  • What happens at maturity — does it auto-renew, at what rate, and how long is the notice window to change my mind?
  • Which RWT rate should I nominate so I do not end up owing tax at year-end?
  • Does the Depositor Compensation Scheme cover my money, and do I already hold more than $100,000 with this institution?
  • Is the advertised rate available online, or does it require a phone call or a visit to a branch?
  • Have I compared this offer against at least two other institutions for the same term?

What to Expect After You Lock In

Once you confirm the term and the rate, the rest is straightforward — but the details around interest, maturity and early access are worth knowing before you sign.

  • Your rate is locked from day one for the full term, no matter what the OCR does next. It will not change, and the bank cannot call the deposit in early on a standard retail term deposit.
  • Interest is calculated on your original deposit at the agreed rate and paid on the schedule you chose — at maturity, or monthly or quarterly on longer terms where offered. RWT is deducted before the interest reaches you.
  • You can usually break the term early, but the bank deducts a penalty — typically some or all of the interest you would have earned for the remaining period. Get the exact formula in writing before you lock in, not when you need the money.
  • Watch the maturity date. Most institutions auto-renew on similar terms unless you say otherwise — often at a lower rollover rate than new customers receive. You usually get a notice window to change the term, withdraw or move the money. Put the date in your calendar and act on it.

NZ-Specific Factors That Move the Decision

New Zealand's deposit market has its own rhythms. The OCR cycle, the tax rules, and the way banks fund their lending all shape what you earn — and the three forces below explain most of what you will see in the table.

Why Banks Raise and Cut Term Deposit Rates

Term deposits are how banks lock in stable funding. When a bank takes a five-year deposit at a fixed rate, it can lend that money out at a margin over what it pays you — so your rate is really a reflection of what the bank expects to earn on the money, plus how badly it needs your deposit.

Three things push rates around:

  • The OCR and wholesale rates. When the Reserve Bank moves the cash rate, banks' own funding costs move with it, and deposit rates are gradually repriced to match.
  • Competition for deposits. When banks want to grow lending faster than their existing deposit base allows, they compete — and the most visible weapon is a sharp "special" rate on new term deposits. That is why the best advertised rate often comes from a bank that is growing aggressively, not necessarily the biggest bank.
  • Individual positioning. One bank might offer a market-leading one-year rate while quietly trimming its five-year rate, depending on how long it wants to lock in funding for.

How OCR Changes Reach Your Deposit

OCR changes do not flow through to term deposits overnight. The chain runs from the cash rate to wholesale funding costs, then into the rates banks offer on new deposits — a process that typically plays out over weeks rather than days, and rarely moves term deposit rates by the full amount of an OCR change.

That lag cuts both ways:

  • When rates are rising, locking in early can mean you miss the next repricing. If you believe the OCR has further to climb, shorter terms let you ride the increases.
  • When rates are falling or flat, locking in a longer term protects the rate you can see today before banks start trimming their offers.

There is no way to know the future direction with certainty — the Reserve Bank itself has stressed that future moves depend on the data. The sensible approach is to make your own view explicit: if you think rates will rise, stay short and reinvest; if you think they have peaked, extend your term while today's rates are still available.

Term Deposits vs Savings Accounts vs Cash PIE Funds

Feature Term deposit On-call savings account Cash PIE fund
Rate Fixed for the term you choose Variable, can change at any time Variable, tracks short-term market rates
Access Locked until maturity (break fee applies) Instant Usually 1–3 business days
Tax RWT at your marginal rate (up to 39%) RWT at your marginal rate Taxed at your PIR (max 28%)
Deposit protection Covered to $100,000 under the DCS Covered to $100,000 under the DCS Not covered — it is an investment, not a deposit
Best for Fixed-rate certainty on a known date Everyday savings and flexibility Higher earners wanting a tax edge on cash

The tax line deserves attention if you earn more than $70,000. Interest from term deposits is taxed at your marginal rate — up to 39 per cent for the highest earners — while a cash PIE fund is taxed at your prescribed investor rate, which caps at 28 per cent. Run the numbers and the gap can flip the winner.

As a purely illustrative example: a per cent term deposit is worth 3.0 per cent after 3 per cent tax, while a 4 per cent cash PIE is worth 3.2 per cent after tax at a 2 per cent PIR. For a detailed walkthrough, see our guide to PIE funds and their tax advantages.

Questions You Might Have

How much interest will a term deposit earn?

Take your deposit, multiply by the rate, then multiply by the fraction of the year you are invested. For example, $10,000 at 4.5 per cent for one year earns $450 in gross interest. If the resident withholding tax is deducted at 30 per cent, you keep roughly $315. Use our term deposit calculator to run your own figures.

Are term deposit rates taxed?

Yes. The bank deducts resident withholding tax (RWT) from your interest before you receive it. You nominate the rate when you set up the deposit, based on your income tax bracket (10.5% to 39%). If the rate you chose does not match your actual tax rate, the difference is settled through your tax return at the end of the year.

Can I get my money out before the term ends?

Usually yes, but you will pay a penalty. Most banks deduct some or all of the interest you would have earned for the remaining period so that you may receive a reduced rate or no interest at all. The longer the remaining term, the bigger the penalty — check the early-withdrawal terms before you lock in, not after.

What happens when my term deposit matures?

Most institutions automatically renew the deposit on similar terms unless you instruct otherwise, often at a lower rollover rate than new customers receive. You typically get a renewal notice with a window to change the term, withdraw the money, or move it elsewhere — put the maturity date in your calendar and act on the notice.

Is my money safe if the bank fails?

Eligible deposits — including term deposits — are protected up to $100,000 per depositor per licensed deposit taker under the Depositor Compensation Scheme, which has applied since 1 July 2025. Amounts above $100,000 at a single institution are not covered, so larger balances are often spread across multiple licensed deposit takers.

Who has the best term deposit rate right now?

Rates change regularly, which is exactly why the tables on this page update automatically from daily market data. As a rule of thumb, the market leaders are usually smaller institutions competing for deposits rather than the big four banks — but the "best" rate for you also depends on your term, your minimum deposit, and whether you qualify for special rates on new money.

Is a term deposit better than a bond?

For most everyday savers, yes. A term deposit is simple, covered by the Depositor Compensation Scheme up to $100,000, and comes with no risk of losing your principal. Corporate and government bonds can pay higher yields but expose you to credit risk and price movements if you sell before maturity, and the deposit protection scheme does not cover them.

What Matters Most

Term deposit rates are worth comparing because the spread between the best and worst offers is often more than a full percentage point — on $50,000 over five years, that is thousands of dollars. But the rate is only one part of the decision.

The term you choose should match when you will need the money, not the biggest number in the table. Understand the tax treatment, know the break penalty, keep your deposits within the protection limit, and never let a deposit roll over on autopilot at whatever rate the bank happens to offer.

If you want to check where the market is today, the table above refreshes daily — and our guides to term deposits vs savings accounts and high-interest savings accounts will help you decide which home for your money fits your situation best.