Treasury raises Kiwi Bond interest rates, the benchmark for risk-free saving for retail savers, their first rise in three years

Savers who use the Treasury's Kiwi Bond offers will want to know they have raised the interest rate on them, and notably, their first rise in three years, and the first change since March 2026

They have added between +25 bps and +75 bps to each of the four rate terms they offer

Treasury (or more precisely, the Debt Management Office of Treasury) last set these rates on March 5, 2026.

For subscriptions of $1,000 - $500,000 they are now at:

The official announcement is here.

Savers who value these direct government-guaranteed term deposits now have to put up with after-tax rates that are lower than Consumers Price Index inflation which was reported at 4.1% for June 2026. The new higher 3.25% one year Kiwi Bond rate translates to 2.68% for taxpayers on a 17.5 marginal income tax rate, 2.28% for those on a 30% tax rate, 2.18% for those on a 33% rate, and just 1.98% for those on the 39% tax rate. There are now no 'real' tax-paid returns when you save via Kiwi Bonds.

With the Depositor Compensation Scheme now in place, banks and other authorised deposit-taking institutions are where you have to look to to get a positive 'real' return, and even there with inflation as high as it is, positive 'real' returns aren't possible. However, those still wanting risk-free returns for amounts above $100,000, Kiwi Bonds will remain an option, for gilt-edged protection at least.