The day before spring starts, Kiwibank has become the first main bank to offer 6% for a one year term deposit.
They aren't the first bank, even the first main bank to offer 6% for any term deposit.
But because almost all term savings are in a 12 month TD or shorter, this becomes a significant benchmark.
In Kiwibank's case, interest is only payable at maturity.
But you can enhance the equivalent after-tax return by choosing a PIE account where the same rate applies. This is especially valuable for taxpayers who are on a 33% income tax rate, or especially a 39% rate. The higher your income, the better the advantage.
Other banks also offer 6% or above rates.
Among the main banks, ANZ offers 6% for an 18 month term, and interest is payable quarterly. Westpac offers 6% for a 2 year term commitment, also with quarterly. (Both also offer PIE equivalents.)
Among challenger banks, many - but not all - offer 6% or higher rates. For terms less than one year you can get these higher rates from Bank of China (6.08% for nine months), Heartland Bank (6.00% for nine months), ICBC (6.00% for nine months), and Rabobank (6.00% for nine months). For terms of 1 year and longer, 6%-plus rates are available from Bank of Baroda, Bank of China (6.18%), China Construction Bank, Heartland Bank, ICBC, Kookmin Bank, Rabobank, SBS Bank (they no longer offer their 6.5% rate however), and TSB.
(Note that Kiwibank also raised its fixed home loan rates by between +10 bps and +20 bps at the same time.)
One risk savers should watch is the cost of wholesale money and you can do that looking at swap rates. You can do that here. Wholesale swap rates jumped jumped recently, a week or two ago, but since have eased off.
An easy way to work out how much extra you can earn is to use our full function deposit calculator. We have included it at the foot of this article. That will not only give you an after-tax result, you can tweak it for the added benefits of Term PIEs as well. It is better you have that extra interest than the bank, especially if you are in the 39% tax bracket - PIEs are taxed at 28% flat.
* Kookmin Bank's 6.10% one year offer is for deposits of $100,000 and more. For a $10,000 minimum it is 6.00%.
The latest headline rate offers are in this table after the recent increases.
| for a $25,000 deposit August 31, 2023 |
Rating | 3/4 mths |
5 / 6 / 7 mths |
8 - 11 mths |
1 yr | 18mth | 2 yrs | 3 yrs |
| Main banks | ||||||||
| ANZ | AA- | 4.30 | 5.80 | 5.85 | 5.95 | 6.00 | 5.70 | 5.25 |
 |
AA- | 4.20 | 5.75 | 5.80 | 5.90 | 5.75 | 5.70 | 5.60 |
 |
AA- | 4.30 | 5.80 | 5.85 | 5.95 | 5.80 | 5.50 | 5.25 |
 |
A | 4.20 | 5.85 | 5.85 | 6.00 +0.10 |
5.70 | 5.20 | |
 |
AA- | 4.30 | 5.80 | 5.85 | 5.95 | 5.80 | 6.00 | 5.50 |
| Other banks | ||||||||
| Bank of China | A | 4.70 | 5.88 | 6.08 | 6.18 | 5.80 | 5.50 | 5.30 |
| China Constr. Bank | A | 5.00 | 5.85 | 5.90 | 6.00 | 5.85 | 5.50 | 5.40 |
| Co-operative Bank | BBB | 4.20 | 5.80 | 5.85 | 5.95 | 5.80 | 5.70 | 5.50 |
| Heartland Bank | BBB | 4.00 | 5.90 | 6.00 | 6.10 | 5.35 | 5.30 | 5.30 |
| ICBC | A | 4.80 | 5.90 | 6.00 | 6.05 | 5.85 | 5.55 | 5.40 |
| Kookmin Bank | A | 4.40 | 5.60 | 5.70 | 6.00* | 5.20 | 5.20 | |
 |
A | 4.75 | 5.90 | 6.00 | 6.15 | 6.00 | 5.70 | 5.60 |
 |
BBB | 4.20 | 5.75 | 5.70 | 6.00 | 5.35 | 5.35 | 5.35 |
 |
A- | 4.25 | 5.30 | 5.40 | 6.00 | 5.50 | 5.50 | 5.25 |
Term deposit rates
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