New Zealand savers have piled into bank accounts and PIE (Portfolio Investment Entity) accounts in the last month as a flight to quality and any sort of tax break dominates any instincts to spend. Reserve Bank figures show deposits in PIE accounts in banks leapt NZ$451 million to NZ$3.06 billion in October and have jumped from nil in May. The PIE accounts allow savers paying the 39% top tax rate to instead pay 30% on the interest from the account. Total household deposits in banks rose NZ$1.749 billion in October to NZ$87.335 billion. This means new lending totaled NZ$2.271 billion and new household deposits totaled NZ$1.749 billion for the month, leaving NZ$522 million to be financed from wholesale markets, both local and foreign. * This article was first published yesterday in our daily subscription newsletter for the banking and finance industries. The email costs NZ$365 per annum and carries exclusive news and analysis for New Zealand banking and finance industry executives, regulators and investors. Sign up for a free trial here.
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