Anyone who has looked at their savings account interest in the last year has likely felt a small sting. While the Reserve Bank of New Zealand has held the OCR high enough to push fixed-term deposit rates well above what Kiwis saw in 2021, the rates on everyday savings accounts still feel stuck in another era.

4 related posts

Highest 1-year term deposit rate (major banks): 5.50% p.a. (as of June 2026) ·
Highest savings account rate (major banks): 2.05% p.a. (Heartland Digital Saver) ·
Typical 6-month term deposit range: 4.50% – 5.00% p.a. ·
Interest on $100,000 at 5.00% for 1 year: $5,000 (before tax)

Quick snapshot

1Confirmed facts
2What’s unclear
3Timeline signal
  • May 2026: Westpac NZ cuts its 2‑year special home loan rate to 4.99% (not a deposit rate). (MoneyHub (NZ comparison site))
  • June 2026: RBNZ releases B26 data – term deposit rates unchanged from previous month. (RBNZ B26 data)
  • 2022–2023: OCR hikes pushed term deposit rates from roughly 1% to over 5%. (Trading Economics (economic data provider))
4What’s next
  • If the OCR remains on hold, term deposit rates are likely to stay near current levels for the rest of 2026. (RBNZ B26 data)
  • Savers may see small rate cuts if the RBNZ begins easing later in the year. (RBNZ B26 data)

Six key figures sum up the current deposit landscape in New Zealand:

Metric Value / Detail
Highest 1‑year term deposit rate 5.50% p.a. (as of June 2026, Trading Economics (economic data provider))
Highest savings account rate 2.05% p.a. (Heartland Digital Saver, Heartland Bank (NZ deposit‑taker))
Number of banks offering term deposits 12+ major and non‑bank deposit takers
Official data source RBNZ B26 statistics – new interest‑bearing term deposits
Myth: 7% fixed deposits in NZ Not currently offered by any NZ bank

Which bank is offering 4.99% interest rate in NZ?

4.99% special offers (Westpac home loan vs term deposit)

  • Westpac NZ’s 4.99% rate is a home loan (mortgage) product, not a deposit rate. MoneyHub (NZ comparison site) notes that some term deposits from various providers are offered at 4.99% p.a. for longer terms (e.g., 3 years).
  • MoneyHub lists a 3‑year term deposit at 4.99% p.a. as of June 2026. That is a genuine deposit rate, but it requires a longer commitment.

Other banks offering rates near 5%

  • Heartland Bank offers a 5‑year term deposit at 4.10% p.a., and rates on shorter terms range from 2.00% (1‑month) to 3.80% (3‑year). Heartland Bank (NZ deposit‑taker)
  • ANZ’s published rates for deposits of $10,000+ range from roughly 3.20% (30‑day) to 5.00%+ for 1‑year terms (the top rate at major banks). ANZ (major NZ bank)
  • BNZ requires a minimum deposit of $2,000 and caps the rate at the first $5 million held. BNZ (major NZ bank)
Bottom line: The 4.99% figure causes confusion because Westpac markets it for mortgages, while a handful of term deposits do pay 4.99% – but only on longer 3‑ to 5‑year terms. Short‑term savers looking for 4.99% will not find it from any major bank for terms under 12 months.

The implication: always verify whether an advertised rate applies to savings or borrowing.

Which NZ bank has the highest interest rate for fixed deposits?

Top rates by term length (1‑month to 5‑year)

  • 1‑month: Heartland Bank 2.00% p.a. Heartland Bank (NZ deposit‑taker)
  • 3‑month: Heartland Bank 3.20% p.a.; major banks around 3.00–3.50%.
  • 6‑month: Typical range 4.50% – 5.00% p.a. (e.g., select banks offer 4.80%). MoneyHub (NZ comparison site)
  • 1‑year: Top major bank rate ~5.50% p.a. (from ANZ, BNZ, Westpac).
  • 3‑year: Around 4.99% p.a. from some providers.
  • 5‑year: Heartland Bank 4.10% p.a.; others around 3.80–4.00%.

Comparison of major banks: ASB, ANZ, BNZ, Kiwibank, Westpac

One pattern across all five: shorter terms pay less and longer terms pay more, but the curve flattens beyond 2 years.

Bank 1‑month 6‑month 1‑year 3‑year
ANZ 3.00% 4.60% 5.50% 4.50%
BNZ 2.80% 4.70% 5.40% 4.30%
Kiwibank 2.50% 4.50% 5.20% 4.00%
Westpac 3.10% 4.80% 5.50% 4.60%
ASB 2.90% 4.55% 5.30% 4.20%

Rates are indicative based on publicly advertised rates as of June 2026. Exact rates depend on deposit amount and negotiation.

Why this matters

For a saver with $100,000, the difference between the highest and lowest 1‑year rate in this table is 0.30 percentage points – that’s $300 more, before tax, by picking the right bank.

The pattern: even small rate differences add up, especially on larger deposits.

How much interest will I earn on $100,000 fixed deposit?

Gross interest calculation example (1‑year at 5.00%)

After‑tax return (RWT rates for individuals)

  • Resident Withholding Tax (RWT) is deducted by the bank. Rates: 10.5% (income up to $14,000), 17.5% ($14,001–$48,000), 30% ($48,001–$70,000), 33% ($70,001–$180,000), or 39% (above $180,000). Inland Revenue (NZ tax authority)
  • For a saver on the 17.5% RWT rate: $5,000 gross → $4,125 net. For a saver on the 30% rate: $5,000 → $3,500 net.

Comparison with $500,000 deposit earnings

  • $500,000 at 5.00% = $25,000 gross per year. After 30% RWT: $17,500 net.
  • Larger deposits may qualify for negotiated rates, but standard advertised rates apply to most retail savers.
Bottom line: The tax wedge is real. A $100,000 deposit earning 5.00% effectively returns $4,125 to a typical middle‑income Kiwi. That’s still far more than a standard savings account – but the illusion of “$5,000 in your pocket” doesn’t survive tax.

The catch: the actual spending power after tax is $1,375 less than the headline figure.

What NZ bank has the highest interest rate for savings accounts?

Top online savings accounts (Heartland Digital Saver 2.05% p.a.)

  • Heartland Bank’s Digital Saver: 2.05% p.a., paid monthly. Heartland Bank (NZ deposit‑taker)
  • Rabobank 60‑day Notice Saver: 2.55% p.a. (requires 60 days’ notice). MoneyHub (NZ comparison site)
  • Kiwibank Direct Call: 1.00% p.a. Major banks’ standard savings accounts: typically under 1.00%.

How savings rates compare with term deposits

  • Term deposits currently pay 2–3 percentage points more than top savings accounts.
  • The trade‑off: savings accounts offer instant access; term deposits lock your money for the chosen term.
  • For emergency funds, savings accounts win. For savings you can leave untouched for 6+ months, a term deposit earns significantly more.
The trade‑off

A retiree with $200,000 could earn $10,000 annually in a 1‑year term deposit (5.00%) but only $4,100 in a 2.05% savings account. The catch: they cannot access the term deposit money for 12 months without breaking the term and paying a penalty.

The pattern: liquidity and return are inversely related in the current rate environment.

How do 6‑month term deposit rates compare across NZ banks?

Current 6‑month rates from ASB, BNZ, Kiwibank, ANZ, Westpac

As shown in the comparison table above, 6‑month term deposit rates from major banks range from 4.50% (Kiwibank) to 4.80% (Westpac). MoneyHub NZ reports a typical range of 4.50%–5.00% p.a. for 6‑month terms. These rates are competitive with longer maturities and allow more frequent reinvestment.

When a 6‑month term might be better than a longer term

If you expect interest rates to rise, a 6‑month term lets you lock in a decent return now and reinvest at potentially higher rates later. For short‑term goals or when you need cash within six months, this duration avoids the penalty of breaking a longer deposit. For those interested in the financial landscape, understanding the Greg Abel net worth can provide valuable context.

“Shorter terms offer more liquidity and flexibility, especially in a changing interest rate environment.” — MoneyHub NZ

Bottom line: A 6‑month term deposit is a middle ground — you earn more than a savings account but keep your options open compared to a multi‑year lock‑in.

What this means: for savers uncertain about rate direction, the 6‑month term provides a strategic balance.

Upsides of term deposits

  • Higher interest rates (2–3% more than savings accounts)
  • Fixed rate for the entire term
  • Ideal for disciplined savers with a set time horizon

Downsides of term deposits

  • Funds are locked until maturity – early withdrawal penalties apply
  • Interest rates may be lower than inflation after tax
  • Less flexibility than an everyday savings account

Related reading: **Term deposit rates NZ** · **Best savings accounts NZ**

Additional sources

moneyhub.co.nz, canstar.co.nz, oecd.org, airwallex.com

For a broader comparison, consider comparing top term deposit providers across different banks to find the best rates.

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Frequently Asked Questions

Can I get a 7% return on fixed deposits in New Zealand?

No. As of June 2026, no NZ bank offers a 7% fixed deposit rate. The highest 1‑year rate from a major bank is around 5.50% p.a. The 7% figure is a myth that circulates on social media; it may refer to historical rates or international offers.

How is term deposit interest taxed in New Zealand?

Interest is subject to Resident Withholding Tax (RWT) deducted by the bank. Rates range from 10.5% to 39% depending on your total income. For example, a saver on the 17.5% rate receives $4,125 net from a $5,000 gross interest payment.

What is the difference between a term deposit and a savings account?

A term deposit locks your money for a fixed period (e.g., 6 months, 1 year) in exchange for a higher interest rate. A savings account offers instant access but typically pays much less – currently top savings rates are around 2.05% p.a., while term deposits can reach 5.50% p.a.

How much will I earn after tax on a $100,000 term deposit?

At 5.00% p.a., gross interest is $5,000. After applying the 17.5% RWT rate you would receive $4,125; at 30% RWT it would be $3,500. Your actual after‑tax return depends on your marginal income tax bracket.

Which bank has the lowest fees on savings accounts in New Zealand?

Most major banks offer fee‑free savings accounts when you have a linked transaction account. Heartland Bank’s Digital Saver and Kiwibank’s Direct Call account typically have no monthly fees. Always check the terms and conditions for any account‑keeping charges.

For Kiwi savers, understanding the after‑tax return and comparing rates across banks can make a meaningful difference to your net savings. The choice between a term deposit and a savings account ultimately depends on your need for liquidity versus higher returns.