As global instability adds pressure to household budgets, New Zealanders are increasingly looking for certainty in their finances. But many savings accounts are not delivering the value those headline rates suggest.
Across the banking sector, some savings accounts rely on bonus interest structures. These typically advertise a higher rate made up of a low base rate plus a bonus that is only paid if customers meet specific monthly conditions, such as limiting withdrawals.
When household costs are unpredictable, flexibility becomes critical. Many Kiwi need to dip into their savings to manage everyday expenses as they arise. But because bonus interest is usually assessed month by month, needing to access savings regularly can mean missing out on the bonus for long periods, and in some cases month after month even when savers maintain a healthy balance.
“When life doesn’t run exactly to plan, those bonus rates can fall away surprisingly easily,” says Kiwibank Chief Customer Officer, Retail, Mark Stephen. “A single unexpected expense can mean the bonus disappears for the month, leaving savers earning a very low base rate instead.”
Mr Stephen says this can significantly reduce the actual return households receive, particularly when household budgets are already under pressure.
“The conflict in the Middle East is a clear example of how global events can quickly feed into costs here at home. When uncertainty increases, we value predictability. Savings accounts are meant to provide that, but the structure of some products can undermine it.”
According to Mr Stephen, the issue is not consumer behaviour, but product design.
“Savers don’t miss out on bonus interest because they’re careless. They miss out because real life doesn’t always align with rigid conditions set by your bank. When savings products rely on people behaving perfectly every month, value naturally shifts away from customers to the banks.”
Savers don’t miss out on bonus interest because they’re careless. They miss out because real life doesn’t always align with rigid conditions set by your bank."Mark Stephen, Kiwibank Chief Customer Officer, Retail
Savers may assume they are earning the advertised rate, without realising how often bonus conditions are missed or how low base rates can be in comparison.
“This means New Zealanders are often earning less on their savings than they expect. Over time, that lost interest adds up to hundreds of millions of dollars across the system.”
In response, Kiwibank has taken a different approach – its Retail Online Call and PIE Online Call accounts pays the same interest rate to all customers without conditions or penalties.
“There are no hoops to jump through and no surprises at the end of the month. The rate we advertise is the rate our customers receive, every time. We believe value and certainty should not be conditional.”
Mr Stephen says this approach reflects Kiwibank’s role as a challenger bank. “Good competition isn’t about who can promote the biggest bonus rate on a billboard. It’s about who delivers consistent, transparent value in normal months, not just perfect ones.
“I’d encourage savers to look beyond headline rates when choosing where to put their money. The most important question isn’t just ‘what’s the highest rate?’. It’s ‘what will I actually earn when I need to access my money, when my balance doesn’t grow, or when life intervenes?’”
While global economic shocks are outside individual control, he says choosing simpler, more predictable financial products is not.
“Certainty matters more than ever, and savings accounts should work quietly and reliably in the background, not demand constant attention just to deliver fair value.”
Comparison of major bank savings accounts (as at 29 April 2026)
Kiwibank offers a competitive, unconditional rate, while other banks apply withdrawal or deposit conditions. BNZ charges $3 per withdrawal after the first free withdrawal.
Retail On Call Accounts
| Empty header |
Kiwibank |
ANZ |
ASB |
BNZ |
Westpac |
|---|---|---|---|---|---|
|
Product name |
Standard and PIE Online Call |
Serious Saver |
Savings Plus |
Rapid Save |
Bonus Saver |
|
Base rate |
1.50% p.a. |
0.05% p.a. |
0.05% p.a. |
1.70% p.a. |
0.05% p.a. |
|
Bonus rate |
0.00% p.a. |
1.50% p.a. |
1.55% p.a. |
0.00% p.a. |
1.20% p.a. |
|
Potential rate |
1.50% p.a. |
1.55% p.a. |
1.60% p.a. |
1.70% p.a. |
1.25% p.a. |
|
Conditions for bonus rate (BNZ pays a single rate, no bonus) |
None |
No withdrawals and deposit >$20 on or before the last business day of the month |
No withdrawal or one withdrawal during the first day of the month |
One free withdrawal, $3/withdrawal after |
Grow your balance by >$20 from previous month |
Notes
- A customer with a $20,000 savings balance earning 1.5% per annum earns $300* in interest over a year. At a base rate of 0.05% p.a., they earn around $10* per year. That’s a difference of approximately $290* in interest over 12 months.
*Before tax. - Kiwi households hold around $86 billion in savings accounts with New Zealand banks. Three of New Zealand’s major banks currently offer base savings rates of 0.05% p.a. If only half of savers meet the conditions required to earn bonus interest in any given month, the remaining balances earning base rates would equate to hundreds of millions of dollars in forgone interest across the system over time.
Media contact: External Communications media@kiwibank.co.nz.