By David Chaston
Kiwibank has reduced some of its term deposit offer rates.
These reductions only relate to its interest-at-maturity (IAM) offers - there is no change to their interim interest rate offers.
The changes are effective Monday, July 30, 2018 (today).
Their 200 day 3.30% IAM offer has been reduced by -5 bps to 3.25% pa.
Their two and three year IAM offers have also been reduced by -5 bps, now to 3.65% and 3.80% pa respectively.
For longer term offers, the reduction is -10 bps. The four year IAM rate is now 4.00% while the five year IAM rate is now 4.10% pa.
Interim interest rates are at a discount to these rates. For example, the two year offer on an interim basis is 3.60% compared to the 3.65% IAM.
The four year comparison example is 3.80% on an interim basis, compared with 4.00% IAM.
The comparisons in the table below are all "at maturity" offers.
Kiwibank offers lower rates for amounts deposited for a fixed term that are lower than $10,000.
For higher rates, you will need to assess the offers of institutions with a lower credit rating. Rate offers rise significantly from non-bank institutions with sub-investment grade ("junk") credit ratings.
PIE rates can give a small boost to pre-tax return equivalents.
Using our deposit calculator to figure exactly how much benefit each option is worth you can assess the value of more or less frequent interest payment terms, and the PIE products, comparing two situations side by side.
The latest headline rate offers are in this table.
|for a $25,000 deposit||Rating||3/4 mths||5/6/7 mths||8/9 mths||1 yr||18 mths||2 yrs||3 yrs|
|* = these credit ratings in this review that are not investment grade.|
Rates in this table are the highest offered by each institution for the terms listed. You however will need to check how often interest is credited or paid. That important factor is not filtered in the above table and rates with various interest payment/credit arrangements are mixed here. However, our full tables do disclose the offer basis.
Our unique term deposit calculator can help quantify what each offer will net you.
(This Update corrects the new Kiwibank rates for four and five years which were misreported in the earlier version.)