Few things in personal finance feel as straightforward as a term deposit—pick a term, lock in a rate, and wait. But when every major New Zealand bank is tweaking its offers multiple times a month, the “best” rate on a given day might not be the best choice for your cash.

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Highest rate from top NZ bank: 4.00% p.a. (ASB, 18 months) ·
Average 1-year term deposit rate: 3.90% p.a. ·
Lowest short-term rate: 1.80% p.a. (30 days) ·
Number of major banks offering >3%: 4 (ASB, Westpac, Heartland, Kiwibank)

Quick snapshot

1Confirmed facts
2What’s unclear
  • Whether any NZ bank currently offers 5% or higher for standard term deposits
  • Exact BNZ, ANZ, and Kiwibank rates for all terms from a single consistent source
3Timeline signal
  • Banks continued tweaking offers in February 2025 — Kiwibank cut, BNZ cut (Interest.co.nz)
  • BNZ had trimmed rates again by 14 January 2025 (Interest.co.nz)
4What’s next
Fact Details
Highest 1-year rate 3.90% p.a. (ASB) (BusinessDesk)
Highest 18-month rate 4.00% p.a. (ASB) (BusinessDesk)
Lowest short-term rate 1.80% p.a. (30 days)
Typical minimum deposit $1,000
Early withdrawal penalty Loss of interest (often 90 days)

Which bank has the best term deposit rate in NZ?

The answer depends heavily on your deposit term, but right now ASB leads for medium-length terms. On the latest BusinessDesk (NZ financial data aggregator) rate table, ASB offers 4.00% p.a. for 5 years and 3.45% for 2 years — among the highest across the major banks. Kiwibank and Rabobank match ASB at 4.00% for the 5-year term (BusinessDesk).

Current top rates from major banks

Six banks, one pattern: longer terms typically yield higher rates, but the spread between banks narrows after 2 years.

Bank 6 months 1 year 2 years 3 years 4 years 5 years
ANZ 3.45% 3.40% 3.45% 3.60% 3.75% 3.90%
ASB 3.40% 3.40% 3.45% 3.65% 3.80% 4.00%
BNZ 3.50% 3.40% 3.45% 3.60% 3.70% 3.80%
Kiwibank 3.55% 3.50% 3.50% 3.65% 3.80% 4.00%
Rabobank 3.60% 3.55% 3.55% 3.70% 3.85% 4.00%
TSB 3.40% 3.40% 3.50% 3.65% 3.80% 3.95%
Westpac 3.45% 3.40% 3.45% 3.60% 3.80% 3.90%

Source: BusinessDesk — aggregated from bank websites, accessed mid-2025.

The trade-off

Rabobank offers the highest 6-month and 1-year rates — 3.60% and 3.55% respectively — but is a smaller institution. Kiwibank is competitive at 3.55% for 6 months. For savers who want a big-bank name with a strong short-term rate, BNZ leads at 3.50% for 6 months.

Comparing rates by term length

Short-term rates (under 1 year) vary more than long-term ones. For 6-month terms, Rabobank and Kiwibank are the clear leaders at 3.60% and 3.55% respectively, while ASB and TSB trail at 3.40%. For 1-year terms, Rabobank again leads at 3.55%, followed by Kiwibank at 3.50%. The difference between the highest and lowest 1-year rate is just 0.15 percentage points.

How to evaluate the best rate for your needs

  • Match the term to your cash-flow timeline — a longer term locks your money away but may not yield proportionally more interest.
  • Check whether the bank offers a higher rate for deposits above a threshold (e.g., $25,000). Interest.co.nz’s February data showed ANZ offering 4.80% for 5-7 months on a $25,000 deposit (Interest.co.nz (NZ personal finance tracker)).
  • Factor in early withdrawal penalties — losing 90 days of interest can erase a rate advantage.
The upshot

For a typical $10,000 deposit over 1 year, the difference between Rabobank (3.55%) and ANZ (3.40%) is only $15. The convenience of your existing bank may be worth more than chasing the top rate by 0.15%.

Bottom line: The implication: the best rate on paper may not translate into materially more earnings for smaller deposits.

Where can I get 5% on a term deposit?

No major NZ bank in the current data offers 5% on a standard term deposit — the highest confirmed rate is ASB’s 4.00% for 5 and 18-month terms. However, 5% may be achievable for larger deposits or shorter promotional offers from smaller institutions, though none are verified in the latest BusinessDesk or Interest.co.nz tables.

Current availability of 5% rates in NZ

The short answer: none. Every confirmed rate from the seven major banks tops out at 4.00%. Even on larger $25,000 deposits, the highest rate recorded by Interest.co.nz in February 2025 was ANZ at 4.80% for 5-7 months (Interest.co.nz) — still below 5%.

Why 5% may not be realistic for standard term deposits

Term deposit rates track the OCR and wholesale funding costs. As of mid-2025, the RBNZ’s B26 series shows new interest-bearing term deposit rates moving within a range well under 5% (Reserve Bank of New Zealand (central bank data)). To get 5%, you’d likely need a non-bank lender or a promotional rate that isn’t widely advertised.

Alternative investments offering higher returns

  • PIE funds — Portfolio Investment Entities can invest in higher-yielding assets; returns are taxed at your personal rate (capped at 28%).
  • High-interest savings accounts — Typically offer lower rates than term deposits but allow instant access.
  • Dividend-paying shares or ETFs — Higher potential returns but greater risk, no capital guarantee.
What to watch

Chasing a 5% rate on a term deposit today may mean locking money into a lower rate later if the OCR drops. The RBNZ data shows a downward trend in 2025 — waiting for 5% could mean missing the current 4% window.

Bottom line: The pattern: 5% is currently unreachable for standard deposits, and waiting for it risks missing the best available rates.

Are term deposits worth it in NZ?

Term deposits serve one purpose well: they protect your capital while delivering a fixed return. But in 2025, with inflation around 4-5%, the real return (after inflation and tax) on a 3.50% term deposit is negative. Whether they’re “worth it” depends entirely on your financial goal and time horizon.

Pros of term deposits: safety and fixed returns

  • Principal guaranteed by the bank — NZ banks are regulated and typically have strong capital ratios.
  • Fixed rate locked in for the term — you are immune to rate drops.
  • Simple, no fees beyond early withdrawal penalties.

Cons: lower rates compared to inflation and other investments

  • Rates since January 2025 have been falling — BNZ trimmed rates twice in January and February alone (Interest.co.nz).
  • After tax at 30%, a 3.50% rate yields just 2.45% — below the inflation rate of around 4%.
  • Early withdrawal penalties can wipe out accrued interest if you need the money early.

When term deposits make sense for your portfolio

  • Short-term cash holding: Money you need in 6-18 months for a house deposit, car, or upcoming expense.
  • Conservative investors: Retirees or those who cannot tolerate any principal loss.
  • Diversification: Part of a balanced portfolio alongside growth assets.
Bottom line: Term deposits are what the industry says they are — safe, fixed-return cash instruments — not an inflation-beating growth tool. For savers needing capital preservation in the next 1-2 years: lock in an 18-month to 3-year term at the highest available rate. For long-term investors: allocate to diversified funds instead, because term deposits guarantee a loss of purchasing power at current inflation.

What are the highest term deposit interest rates in NZ?

Across all terms and all major banks, the confirmed highest rate is 4.00% p.a., offered by ASB (18 months and 5 years), Kiwibank (5 years), and Rabobank (5 years). That’s the ceiling — no bank in the current data set breaks through it.

Top rates from major banks

Seven banks, one pattern: the 5-year term delivers the highest rates, but the spread between best and worst at that term is only 0.20%.

Bank Highest rate Best term for that rate
ASB 4.00% 18 months, 5 years
Kiwibank 4.00% 5 years
Rabobank 4.00% 5 years
TSB 3.95% 5 years
ANZ 3.90% 5 years
Westpac 3.90% 5 years
BNZ 3.80% 5 years

Comparison of rates by term (1 month to 5 years)

Short-term rates (under 1 year) are more volatile. Interest.co.nz’s 10 February 2025 table showed ANZ offering 4.25% for 3-4 months and 4.55% for 1 year on a $25,000 deposit (Interest.co.nz). By mid-2025, BusinessDesk’s data shows ANZ at 3.40% for 1 year — a drop of over 1% in a few months. Rates are falling, and fast.

How to find the latest rates

  • Check each bank’s website directly for their current rate sheet.
  • Use aggregators like BusinessDesk (Deposit rates page) for a side-by-side view.
  • Reference the RBNZ’s official B26 series for the monthly average trend (Reserve Bank of New Zealand (central bank data)).
The pattern

The highest rate today is 4.00% for a 5-year lock-in at three banks. But the 5-year term rate has been falling since January — locking in now may mean missing a lower rate next quarter, which paradoxically makes a shorter term more attractive.

Bottom line: What this means: choosing a shorter term now preserves the option to reinvest at potentially higher rates if the OCR stabilises.

What are the best term deposit rates for 6 months in NZ?

For a 6-month term, the standout rate is Rabobank at 3.60%, followed by Kiwibank at 3.55% and BNZ at 3.50%. ASB and TSB offer the lowest at 3.40%. The difference between best and worst is just 0.20 percentage points, meaning the choice likely comes down to convenience and bank relationship.

ASB 6-month rate: 3.45% p.a.

ASB offers 3.45% for a 6-month term according to BusinessDesk data. That’s mid-pack — not the highest, but from one of NZ’s largest and most trusted banks (BusinessDesk).

Other banks’ 6-month rates

  • Rabobank: 3.60% (highest)
  • Kiwibank: 3.55%
  • BNZ: 3.50%
  • ANZ: 3.45%
  • Westpac: 3.45%
  • ASB: 3.40%
  • TSB: 3.40%

How to lock in a 6-month rate

The process is straightforward at any major bank — you can open a term deposit online in under 10 minutes if you’re an existing customer. Non-customers may need to verify identity in branch. The minimum deposit is typically $1,000, though some banks require $5,000 for the best rates.

Why this matters

A 6-month term is the most popular choice for savers who don’t want to tie up cash for a full year. With rates trending down since January 2025, the short-term flexibility means you can reinvest at potentially higher rates if the RBNZ pauses OCR cuts — or accept lower rates if the trend continues.

The catch: a 6-month term offers flexibility but may lock in the current downward trend if you need to reinvest in a lower-rate environment.

Additional sources

interest.co.nz, valuehub.co.nz, termdeposits.co.nz, moneyhub.co.nz, banked.co.nz, newzealand-finance.nz

For a broader overview of the market, you can also check out best term deposit rates NZ to see how different providers stack up.

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Frequently asked questions

How are term deposit interest rates determined?

Banks set term deposit rates based on the Reserve Bank of New Zealand’s Official Cash Rate (OCR), their own funding needs, competition, and wholesale market rates. The RBNZ publishes the monthly B26 series tracking average new deposit rates (RBNZ data).

What is the minimum amount for a term deposit in NZ?

Most banks require a minimum of $1,000, though some (like ANZ and Westpac) may accept $500 for online accounts. Higher rates are often available for deposits of $10,000 or $25,000+.

Can I break a term deposit early?

Yes, but it comes with a penalty — typically the loss of accrued interest, often equivalent to 90 days of interest. Some banks may also charge a fee. Always check the terms before locking in.

Are term deposits insured by the government in NZ?

No. New Zealand does not have a formal deposit insurance scheme (though one is being implemented under the Deposit Takers Act 2023, expected to cover up to $100,000 per depositor from mid-2025). For now, deposits are not government-guaranteed.

How do I open a term deposit online?

Existing customers can open a term deposit through their bank’s internet banking portal in minutes. New customers typically need to apply online or visit a branch to verify identity. You choose the amount, term, and interest payment frequency (monthly, at maturity, or reinvested).

What is the difference between a term deposit and a PIE fund?

A term deposit is a fixed-interest bank product where you lend money to the bank for a set term. A PIE (Portfolio Investment Entity) fund invests in a mix of assets — shares, bonds, property — with higher potential returns but no capital guarantee. PIEs also have a capped tax rate of 28%.

How often do term deposit rates change?

Banks can change rates daily, though most adjust them in response to OCR announcements (every 6 weeks) or funding cost shifts. Checking rates weekly is sensible if you’re actively shopping. Aggregator sites like BusinessDesk update their tables regularly.

For NZ savers weighing a term deposit in 2025, the decision is clear: lock in 18 months at 4.00% if you want the best rate from a major bank, or choose a 6-month term at 3.55-3.60% if you need flexibility. The alternative — keeping cash in a savings account earning under 2% — is a worse option for anyone with a firm timeline for their money.