Retirement Account Options 🇳🇿

Find the best retirement savings accounts and term deposits from New Zealand's leading banks. Compare rates, features, and options to maximize your retirement income. Whether you need guaranteed returns or growth potential, we'll help you choose the right accounts.

Protected by Government Guarantee

Bank deposits are protected up to $100,000 per person per bank by New Zealand's deposit guarantee scheme. Your retirement savings are safe and secure.

Compare Retirement Account Providers

Choose from traditional bank retirement accounts with term deposits or low-fee investment options. Here's how New Zealand's top providers compare:

Kiwibank

🌐 kiwibank.co.nz | 📍 NZ Owned
NZ OWNED
4.40% p.a.
Term Deposit Rate (12 months)

New Zealand's only locally owned bank, Kiwibank offers competitive retirement savings options with a focus on supporting local communities. Access through PostShop network nationwide makes banking convenient for seniors.

Account Features:

  • KiwiSaver and term deposits
  • Competitive term deposit rates
  • PostShop network access
  • Retirement planning advice

Best For:

  • ✓ Supporting NZ economy
  • ✓ Rural/regional seniors (PostShops)
  • ✓ Competitive term deposit rates
  • ✓ Strong customer service focus
💰 Return Example:
$100,000 term deposit for 12 months = $4,400 interest (before tax)

ASB Bank

🌐 asb.co.nz | 📍 Nationwide
TOP SERVICE
4.35% p.a.
Term Deposit Rate (12 months)

Award-winning customer service and comprehensive retirement account options. ASB offers retirement-specific accounts with flexible features, online banking, and dedicated support for senior customers.

Account Features:

  • ASB Retirement Accounts
  • High interest term deposits
  • FastNet Classic internet banking
  • Retirement planning tools
  • Investment portfolio management

Standout Features:

  • ✓ Award-winning customer service
  • ✓ User-friendly digital banking
  • ✓ Comprehensive retirement planning
  • ✓ Strong local NZ presence
💰 Return Example:
$100,000 term deposit for 12 months = $4,350 interest (before tax)

BNZ (Bank of New Zealand)

🌐 bnz.co.nz | 📍 Established 1861
ESTABLISHED
4.30% p.a.
Term Deposit Rate (12 months)

Long-established NZ banking history with comprehensive retirement solutions. BNZ offers dedicated senior banking services, investment advisory, and flexible account options for retirees.

Account Features:

  • Retirement Income Accounts
  • Term deposits with competitive rates
  • BNZ Online banking platform
  • Senior banking services
  • Investment advisory services

Key Benefits:

  • ✓ Long NZ banking history
  • ✓ Comprehensive retirement solutions
  • ✓ Strong digital banking platform
  • ✓ Dedicated senior support
💰 Return Example:
$100,000 term deposit for 12 months = $4,300 interest (before tax)

Simplicity Living

🌐 simplicity.kiwi | 📍 Not-for-Profit
LOWEST FEES
0.31% - 0.56%
Annual management fees (vs. 4.30%+ term deposit rates)

Not-for-profit investment provider offering ultra-low fees on retirement investments. While not a traditional bank, Simplicity provides KiwiSaver and investment funds with transparent pricing and ethical investment focus.

Investment Options:

  • Low-fee retirement investments
  • Ethical investment options
  • Simple fee structure
  • Online account management
  • KiwiSaver and investment funds

Unique Benefits:

  • ✓ Very low management fees
  • ✓ Transparent fee structure
  • ✓ Focus on ethical investing
  • ✓ Not-for-profit structure
💰 Fee Savings Example:
$100,000 investment: Only $310-$560/year in fees vs $800-$1,500 at traditional providers

💡 Choosing Between Options

  • Want guaranteed returns? Choose bank term deposits (Kiwibank, ASB, BNZ) - your capital is protected and returns are fixed
  • Want growth potential? Consider Simplicity's investment funds - higher potential returns but with market risk
  • Need regular income? Bank term deposits with monthly interest payments or investment funds with distribution options
  • Minimize fees? Simplicity has the lowest fees (0.31%-0.56% p.a.) vs banks with no fees on term deposits

Understanding Your Retirement Account Options

Different account types serve different retirement needs. Here's a breakdown to help you choose:

Term Deposits

Fixed-term savings with guaranteed interest rates. Lock in your money for a set period (1 month to 5 years) and earn predictable returns.

✓ Advantages:
  • • 100% capital guaranteed
  • • Fixed returns - know exactly what you'll earn
  • • No fees or management charges
  • • Government deposit protection ($100k per bank)
  • • Simple and stress-free
✗ Disadvantages:
  • • Money locked away for the term
  • • Early withdrawal penalties
  • • Returns may not beat inflation long-term
  • • Miss out if rates rise after you lock in
Best for: Conservative seniors who need guaranteed returns, capital protection, and predictable income. Ideal for money you won't need for the term length.

Savings Accounts

Flexible savings with variable interest rates. Access your money anytime without penalties, but earn lower interest than term deposits.

✓ Advantages:
  • • Instant access to your money
  • • No penalties for withdrawals
  • • Flexible - deposit or withdraw anytime
  • • Government deposit protection
  • • No lock-in period
✗ Disadvantages:
  • • Lower interest rates (2-3% typically)
  • • Variable rates can change anytime
  • • Returns often below inflation
  • • Temptation to spend reduces savings
Best for: Emergency funds and short-term savings. Keep 3-6 months of expenses here for accessibility while earning some interest.

Investment Funds

Professionally managed portfolios investing in shares, bonds, and other assets. Potential for higher returns but with market risk and volatility.

✓ Advantages:
  • • Higher long-term return potential (5-10% p.a.)
  • • Professional investment management
  • • Diversification across many investments
  • • PIE tax advantages for many seniors
  • • Options from conservative to growth
✗ Disadvantages:
  • • Value can go up and down with markets
  • • Management fees (0.3%-1.5% p.a.)
  • • Returns not guaranteed
  • • Requires 5-10+ year timeframe
  • • More complex than bank accounts
Best for: Seniors with 5-10+ year investment horizons who want growth and can tolerate some volatility. Good for money you won't need in the short term.

KiwiSaver (65+)

While you can withdraw KiwiSaver after 65, you can also leave it invested to continue growing. No government contributions after 65, but PIE tax advantages remain.

✓ Advantages:
  • • PIE tax advantages (lower tax for many)
  • • Professional management
  • • Flexible withdrawals after 65
  • • Can leave invested for growth
  • • Part of your estate if you pass away
✗ Disadvantages:
  • • No government contributions after 65
  • • Management fees apply (0.4%-0.9%)
  • • Market risk in non-conservative funds
  • • Less benefit than pre-65 KiwiSaver
Best for: Seniors who don't immediately need their KiwiSaver and want to keep it growing tax-efficiently. Can withdraw as needed or set up regular payments.

Smart Retirement Account Allocation Strategy

Don't put all your eggs in one basket. A smart allocation across different account types provides security, income, and growth potential:

Example: $250,000 Retirement Savings Allocation

Emergency Fund

$25,000
10% of total Instant access

Account type: High-interest savings account
Where: Any major bank
Return: ~2.5% p.a.
Purpose: Emergencies and immediate needs

Short-Term (1-3 years)

$75,000
30% of total Guaranteed

Account type: Term deposit ladder (6, 12, 18, 24 months)
Where: Kiwibank, ASB, or BNZ
Return: ~4.30-4.40% p.a.
Purpose: Near-term expenses, planned purchases

Medium-Term (3-7 years)

$100,000
40% of total Conservative growth

Account type: Conservative/balanced investment fund
Where: Simplicity, Harbour, or Fisher Funds
Return: ~5-7% p.a. long-term
Purpose: Growth with moderate risk

Long-Term (7+ years)

$50,000
20% of total Growth focus

Account type: Balanced/growth investment fund or KiwiSaver
Where: Milford, Fisher, or KiwiSaver
Return: ~7-10% p.a. long-term
Purpose: Maximum growth potential, legacy

Why This Allocation Works:

🛡️
Security

40% in guaranteed/low-risk accounts for peace of mind

📈
Growth

60% invested for inflation-beating returns

💰
Liquidity

Money available at different timeframes as needs arise

💡 Adjust to Your Situation

This is just an example. Your allocation should reflect:

  • Your age: 65-year-olds can be more aggressive than 85-year-olds
  • Your health: Better health = potentially longer timeframe = more growth allocation
  • Your income: If NZ Super covers all expenses, you can invest more aggressively
  • Your risk tolerance: If market drops stress you out, keep more in term deposits
  • Your goals: Leaving inheritance? Keep more in growth. Need income now? More in term deposits/income funds

Frequently Asked Questions

What's the difference between term deposits and retirement accounts?

Term deposits are a specific type of savings account, while "retirement accounts" is a broader term that can include several options:

Term Deposits:
  • • Fixed interest rate for a specific period (e.g., 4.40% for 12 months)
  • • Capital guaranteed - you can't lose money
  • • Money locked in for the term (penalties for early withdrawal)
  • • Simple, predictable returns
  • • Best for conservative investors wanting certainty
Retirement Accounts (broader category includes):
  • • Term deposits (see above)
  • • Savings accounts - flexible access but lower interest (~2.5%)
  • • Investment funds - potential for higher returns (5-10% long-term) but with market risk
  • • KiwiSaver - can leave invested after 65 for continued growth
  • • Managed portfolios - professionally managed mix of investments

💡 Bottom line: Term deposits are ONE type of retirement account option. They're the most conservative (guaranteed, no risk) but potentially lower long-term returns. Most financial advisors recommend a mix - some in term deposits for security, some in investment funds for growth.

Are there any tax advantages for retirement savings?

Yes, but they vary by account type and your personal situation:

KiwiSaver (if you're still contributing):
  • ✓ Government member tax credit: up to $521.43/year (if contributing at least $1,042.86)
  • ✓ Employer contributions (if still working): 3% of salary
  • ✓ PIE tax advantages (often lower than marginal tax rate)
  • ❌ After 65: No government or employer contributions (unless still employed)
Investment Funds (PIE funds):
  • ✓ PIE tax advantage: Many seniors pay lower tax on investment earnings
  • • Your Prescribed Investor Rate (PIR) often lower than marginal tax rate
  • • Example: NZ Super recipient ($28k/year) pays only 17.5% PIR vs 30% marginal rate
  • • Saving: On $5,000 earnings = $625/year less tax!
Term Deposits & Savings Accounts:
  • ❌ No special tax advantages
  • • Interest taxed at your marginal tax rate (usually RWT deducted automatically)
  • • For most NZ Super recipients: 30% tax on interest
  • • Higher income seniors: 33% tax rate

💡 Tax tip: For most seniors, PIE funds (investment funds, KiwiSaver) offer better tax treatment than bank interest. However, term deposits still win if you need guaranteed capital and can't handle market risk. Always consult an accountant for your specific situation.

How do interest rates compare between banks?

Interest rates vary by bank, deposit amount, term length, and change regularly with market conditions. Here's what influences rates:

By Bank (current 12-month rates):
  • • Kiwibank: 4.40% p.a.
  • • ASB: 4.35% p.a.
  • • BNZ: 4.30% p.a.
  • • ANZ: 4.80% p.a. (see term deposits page)
  • • Westpac: 4.75% p.a. (see term deposits page)

Difference between best and lowest: 0.50% p.a.

By Deposit Amount:
  • • $5,000-$10,000: Base rates
  • • $10,000-$25,000: +0.05-0.10% bonus
  • • $25,000-$100,000: +0.10-0.20% bonus
  • • $100,000+: +0.20-0.50% bonus (negotiable)

Larger deposits earn better rates

By Term Length:
  • • 3 months: 4.50-4.60%
  • • 6 months: 4.65-4.75%
  • • 12 months: 4.30-4.90%
  • • 2 years: 4.85-5.00%
  • • 3+ years: 4.95-5.20%

Longer terms usually pay more

Special Offers & Bonuses:
  • • New customers: +0.10-0.25% bonus
  • • Existing customers: Loyalty bonuses sometimes available
  • • Promotional rates: Limited-time higher rates
  • • Always ask: Banks may negotiate for large deposits

💡 Rate shopping tips: (1) Compare at least 3 banks, (2) Check both major banks and Kiwibank, (3) Ask about senior/loyalty bonuses, (4) Rates change monthly - shop around each time, (5) For $50k+, call and negotiate rather than accepting online rates.

What happens to my account if the bank fails?

New Zealand has a Deposit Guarantee Scheme that protects bank deposits if a registered bank fails:

Government Protection Details:
  • ✓ Coverage: Up to $100,000 per depositor per registered bank
  • ✓ Automatic: No need to apply - all eligible deposits automatically covered
  • ✓ Covers: Savings accounts, term deposits, transaction accounts
  • ✓ Timeline: Funds typically returned within 7 days of bank failure
  • ✓ Free: No cost to depositors for this protection
How to Maximize Protection for Larger Amounts:

If you have more than $100,000 to deposit, spread it across multiple banks:

Example: $400,000 to protect

  • • $100,000 at Kiwibank (fully protected)
  • • $100,000 at ASB (fully protected)
  • • $100,000 at BNZ (fully protected)
  • • $100,000 at ANZ (fully protected)

= $400,000 fully protected across 4 banks

⚠️ Important Notes:
  • • Limit applies per person per bank - joint accounts may differ
  • • All accounts at the same bank count toward the $100k limit (can't have $100k savings + $100k term deposit at one bank)
  • • Only applies to registered banks - check Reserve Bank website
  • • Doesn't cover investment funds, shares, or bonds (different protections apply)

💡 Peace of mind: NZ's major banks (ANZ, ASB, BNZ, Westpac, Kiwibank) are extremely stable and bank failures are rare. However, the deposit guarantee provides an extra layer of security. For amounts over $100k, diversifying across banks is smart risk management.

Types of Retirement Accounts in NZ

Different retirement savings vehicles offer different benefits. Understanding your options helps you maximize tax efficiency and income in retirement.

1. KiwiSaver (Most Common)

✓ Benefits:

  • • PIE tax treatment (28% max vs 33-39% personal rate)
  • • Government contributions until 65 ($521/yr)
  • • Employer contributions (3% minimum if working)
  • • Full access from age 65
  • • No tax on withdrawals after 65

⚠️ Considerations:

  • • Locked until 65 (except first home/hardship)
  • • Limited provider switching (once per year)
  • • Fees vary significantly (0.31%-0.80%)
  • • Investment choice affects returns
Best for: Everyone should have KiwiSaver - it's the most tax-advantaged retirement account in NZ

2. Investment Funds (Non-KiwiSaver)

✓ Benefits:

  • • Access anytime (no age restrictions)
  • • PIE tax treatment (28% max if available)
  • • Flexible contributions and withdrawals
  • • Wide choice of fund managers
  • • Can switch providers anytime

⚠️ Considerations:

  • • No government contributions
  • • No employer contributions
  • • Requires discipline (easy to withdraw)
  • • Management fees (typically 0.30%-1.00%)
Best for: After maxing KiwiSaver, or if you need flexible access before 65

3. Savings Accounts & Term Deposits

✓ Benefits:

  • • Capital guaranteed (bank deposits)
  • • Immediate access (savings accounts)
  • • Predictable returns (term deposits)
  • • Simple to understand
  • • Government guarantee up to $100k per bank

⚠️ Considerations:

  • • Lower returns (3-5% typically)
  • • RWT tax (up to 33%) - less efficient than PIE
  • • Inflation risk (returns may not keep pace)
  • • No growth potential
Best for: Emergency fund, short-term savings, or very conservative seniors who can't risk any losses

4. Property Investment

✓ Benefits:

  • • Rental income in retirement
  • • Potential capital appreciation
  • • Tangible asset
  • • Can leave to family
  • • Some tax deductions available

⚠️ Considerations:

  • • High entry cost ($500k+ for rental)
  • • Ongoing maintenance and management
  • • Tenant risks and vacancies
  • • Not liquid (can't sell quickly)
  • • Bright-line test (tax on sale within 10 years)
Best for: Experienced investors with substantial capital who want rental income and can handle property management

Creating Retirement Income: Real Scenarios

✓ John, 66 - NZ Super + KiwiSaver Drawdown

Assets: $180k KiwiSaver, owns home mortgage-free

Strategy: 4% annual KiwiSaver withdrawal + NZ Super

Total Monthly Income: $2,720

  • • NZ Super (single): $2,120/mo
  • • KiwiSaver 4% withdrawal: $600/mo ($7,200/yr)
  • ✓ Comfortable lifestyle
  • ✓ KiwiSaver capital preserved (if 4% returns)
  • ✓ Sustainable for 30+ years

Susan, 68 - Multiple Income Sources

Assets: $120k KiwiSaver, $200k investment fund, owns home

Strategy: Diversified withdrawal across accounts

Total Monthly Income: $3,520

  • • NZ Super (single): $2,120/mo
  • • KiwiSaver 4%: $400/mo
  • • Investment fund 5%: $833/mo
  • • Savings account interest: $167/mo
  • ✓ Very comfortable lifestyle
  • ✓ Capital growing over time

David, 70 - Property Income

Assets: Own home + 1 rental property worth $700k

Strategy: Rental income + NZ Super

Total Monthly Income: $3,470

  • • NZ Super (single): $2,120/mo
  • • Rental income (net): $1,350/mo ($650/wk)
  • ✓ Strong passive income
  • ✓ Property appreciating in value
  • ⚠️ Property management required
  • ⚠️ Tenant vacancy risk

Margaret, 72 - Conservative Approach

Assets: $300k in term deposits, owns home

Strategy: Live off NZ Super, term deposit interest for extras

Total Monthly Income: $3,370

  • • NZ Super (single): $2,120/mo
  • • Term deposit interest (5% before tax): $1,250/mo
  • • After RWT tax (33%): $837/mo
  • ✓ Capital fully protected
  • ✓ No market risk
  • ⚠️ Tax inefficient (33% RWT vs 28% PIE)

💡 Key Income Strategy Lessons

  • • NZ Super is the foundation: $2,120/mo single ($3,263 couple) covers basics
  • • 4% withdrawal rule: Sustainable way to draw income while preserving capital
  • • Diversify income sources: Multiple sources = more resilience
  • • Tax efficiency matters: PIE funds (28% max) better than term deposits (33%)
  • • Keep 2 years cash: Never forced to sell investments in market downturn

Tax Optimization for Retirement Income

Understanding Retirement Income Tax

Income Source Tax Rate $10k Annual Income After-Tax
NZ Superannuation 10.5% (on $25k total) $1,050 $8,950
KiwiSaver withdrawal 0% (tax-free) $0 $10,000
PIE Fund income (28% PIR) 28% $2,800 $7,200
Term Deposit interest (RWT) 33% $3,300 $6,700
Rental property income 17.5-33% (marginal) $1,750-3,300 $6,700-8,250

✓ Most Tax-Efficient Sources

  • 1. KiwiSaver withdrawals: 0% tax (already taxed in fund)
  • 2. PIE fund income: Max 28% tax (vs 33-39% personal)
  • 3. NZ Super: Taxed at low rates due to low total income

✗ Less Tax-Efficient Sources

  • 1. Term deposits: 33% RWT (no PIE benefit)
  • 2. Rental income: 17.5-33% marginal rate + no deductions
  • 3. Part-time work: Reduces NZ Super (abatement after $160/wk)

💡 Tax Optimization Example

$200,000 invested - which is better?

Option A: Term Deposits (5% = $10,000)
  • • Gross income: $10,000
  • • RWT tax (33%): -$3,300
  • • After-tax: $6,700
Option B: PIE Fund (5% = $10,000)
  • • Gross income: $10,000
  • • PIE tax (28%): -$2,800
  • • After-tax: $7,200

Save $500/year = $10,000+ over 20 years by using PIE funds instead of term deposits!

Smart Withdrawal Strategies for Seniors

✓ Best Practices

  • 1
    4% rule: Withdraw 4% annually to make savings last 30+ years
  • 2
    Bucket strategy: Keep 2 years in cash, 5 years in bonds, rest in growth
  • 3
    Tax-efficient order: Withdraw from taxable accounts first, PIE funds last
  • 4
    Don't touch principal in downturns: Use cash bucket when markets down
  • 5
    Review annually: Adjust withdrawals based on market performance

⚠️ Common Mistakes

  • ✗
    Withdrawing too much: 6-8% withdrawal rate risks depleting capital
  • ✗
    Selling in downturns: Locking in losses - use cash reserves instead
  • ✗
    Ignoring inflation: 3% inflation = purchasing power halves in 24 years
  • ✗
    Too conservative: All cash earns less than inflation - lose buying power
  • ✗
    No tax planning: Using high-tax accounts first wastes money

Ready to Optimize Your Retirement Accounts?

Compare options and find the right mix of security, income, and growth for your retirement savings. Start building your ideal retirement account portfolio today.

4.40%
Best term deposit rate
(Kiwibank 12 months)
$100K
Government deposit
protection per bank
0.31%
Lowest investment fees
(Simplicity)

Get Started Today:

Kiwibank
🌐 kiwibank.co.nz
📞 0800 113 355
ASB Bank
🌐 asb.co.nz
📞 0800 803 804
BNZ
🌐 bnz.co.nz
📞 0800 275 269
Simplicity Living
🌐 simplicity.kiwi
📞 0800 746 754