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Interest codes

Posted in Saving

Our term deposit pages feature codes to help you assess how each institution credits you with your interest earnings, and how often you can have interest paid out.

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CREDIT
When interest is earned on a term deposit, it is credited to your account. How often an institution does that varies widely. The following codes (the first letter) indicate:

A Annually
S Semi-annually
Q Quarterly
M Monthly
F Fortnightly
W Weekly
D Daily
X every 3 mths or at maturity, whichever is less
Y at Maturity for less than 6 mths, otherwise quarterly
Z at Maturity, ie simple interest

Please note that if you do not agree crediting arrangements in advance, the institution may use it's default policies and these may be different to what is shown on our web pages. Our pages are intended as a guide only. Only the institution can advise you of its actual policy.

PAID
Our pages also indicate the earliest an institution will pay out interest earned and credited. You can usually make arrangements to defer payments to a slower schedule, or leave it to accrue in your account. The following codes (the second letter) indicate:

A Annually
S Semi-annually
Q Quarterly
M Monthly
N Non-compounding monthly interest avail. Conditions may apply.
F Fortnightly
X every 3 mths or at maturity, whichever is less
Y at Maturity for less than 6 mths, otherwise quarterly
Z at Maturity

 

Please note that if you do not agree payment arrangements in advance, the institution may use it's default policies and these may be different to what is shown on our web pages. Our web pages are intended as a guide only. Only the institution can advise you of its actual policy.

IS INTEREST LOST IF YOUR TERM DEPOSIT ENDS ON A WEEKEND?
Each bank is slightly different in the way they deal with this issue, so it pays to check in advance. However, most have systems in place so that you don't miss out if your term deposit ends on a weekend day. Mary Holm, in a NZ Herald column, had an useful summary of how the main banks treat this issue. The full column is here, but the main points are as follows:

* ANZ:
For a deposit due to mature on a Saturday or Sunday, the money is made available to the customer's ANZ account on the prior Friday night. If the customer has requested that the deposit roll over, it will roll over from the day that it is due to mature, including Saturday or Sunday. Customers can set the maturity date for any day they choose; for example, 185 days or March 11.

* ASB:
The bank says it was the first in New Zealand to offer "real-time banking". If a term deposit matures on a weekend, the funds are paid immediately, and if they are paid into an ASB account they are available immediately - and this will show up in account balances. If they are paid into another bank's account, they will be transferred to that bank on the next business day. It's similar with internet bill payments. If the payment is to another ASB account, it is immediate. If it's to another bank, the money is moved on the next business day. When money is moved from another bank to ASB, the funds start earning interest immediately on receipt.

* BNZ:
If the maturity date for a term deposit falls on a weekend the system defaults the maturity date to the previous business day or, if the customer prefers, the next business day. So, with a deposit that matures on a Saturday, you could now choose between a Friday maturity date, with one day less of interest, or a Monday maturity date, with two days extra interest..

* Kiwibank:
Its system knows if you try to open a term deposit that matures on a non-working day and increases the term so that you are paid interest until the new maturity date. If the customer is talking to the bank at the time - in other words, it's not a paper application - Kiwibank lets them know, for example, that their 180-day term would mature on a Saturday, so the system would automatically turn that into a 182-day term deposit. It would give them the option to change to 179 days - at the same rate - if they required the funds on the Friday.

* Westpac: 
If the maturity date for a term deposit falls on a weekend the system defaults the maturity date to the previous business day or, if the customer prefers, the next business day. So, with a deposit that matures on a Saturday, you could now choose between a Friday maturity date, with one day less of interest, or a Monday maturity date, with two days extra interest.