We realise that sometimes you might need to access some or all of your money from a Term Deposit or PIE Term Deposit before the term is up. An early termination charge may be charged and you'll be paid a lower interest rate on the money you take out (excludes Access Term Deposit).

## How it works

If you need some or all of your money before your term is up, you’ll have to make a formal application to break the deposit early because you’re breaking the contract you made with us.

There are no account management or transaction fees, however early termination charges apply if you break your standard or PIE Term Deposit early.

### Breaking a standard Term Deposit

• You won’t get any interest if you need to break your Term Deposit in the first 30 days after you set it up.
• After the first 30 days, you’ll get a lower rate return on the amount you withdraw as you’ll incur an early termination charge. This charge is a reduction in the return payable to you on the amount withdrawn and will be calculated using the following formula:
• the interest rate that applied on the original deposit date for the term actually completed, less 2%, or
• the current interest rate for the term the deposit has been invested, less 2%.

Example Term Deposit charge calculation

#### Term Deposit example

 Date of investment 1 January 2019 Initial term One year (365 days) Initial deposit \$10,000 Date of break 1 June 2019 Amount requested to break (full break) \$10,000 Term completed Five months (151 days)

#### Early termination charge calculation

The charge equals lesser of calculation A and B = \$72.40 charge (calculation B).

Note: The minimum rate is 0%. The below calculation is before tax.

Calculation A

Calculation B

Interest rate for a five month Term Deposit

As at 1 January 2019 – 4.1% p.a. (interest paid at maturity)

As at 1 June 2019 – 3.75% p.a. (interest paid at maturity)

Rate of return less 2%

2.1% p.a.

1.75% p.a.

Total interest earned if invested in a 5 month Term Deposit when initially invested (before tax)

\$86.88

\$72.40

Calculation A

Calculation B

Interest rate for a five month Term Deposit

As at 1 January 2019 – 4.1% p.a. (interest paid at maturity)

As at 1 June 2019 – 3.75% p.a. (interest paid at maturity)

Rate of return less 2%

2.1% p.a.

1.75% p.a.

Total interest earned if invested in a 5 month Term Deposit when initially invested (before tax)

\$86.88

\$72.40

### Breaking a PIE Term Deposit

• You can't break your PIE Term Deposit within the first 30 days.
• After the first 30 days, you’ll get a lower rate of return on the amount you withdraw as you’ll incur an early termination charge. This charge is a reduction in the return payable to you on the amount withdrawn and will be calculated using the following formula:
• Early termination charge = amount to be withdrawn × (days investment ÷ 365) × (‘actual rate’ less 2%) where the actual rate is the rate of return we agreed when you invested.

If we agree to you making a withdrawal, it must be of at least \$500 and you must maintain the minimum balance of \$10,000 or you can ask to withdraw all of your balance by redeeming your unit entirely.

Example PIE Term Deposit charge calculation

#### Term Deposit example

 Date of investment 1 January 2019 Initial term One year (365 days) Initial deposit \$10,000 Date of break 1 June 2019 Amount requested to break (full break) \$10,000 Term completed Five months (151 days)

#### Early termination charge calculation

Note: The minimum rate is 0%. The below calculation is before tax.

 Initial rate of return (‘actual rate’) 4.30% p.a. Total return earned for 5 months (before tax) \$177.89 Less break rate of return reduction 2.00% p.a. Early termination charge (before tax) \$82.74 Effective rate of return on withdrawn amount 2.30% p.a. Return received after early termination charge (before tax) \$95.15
 Initial rate of return (‘actual rate’) 4.30% p.a. Total return earned for 5 months (before tax) \$177.89 Less break rate of return reduction 2.00% p.a. Early termination charge (before tax) \$82.74 Effective rate of return on withdrawn amount 2.30% p.a. Return received after early termination charge (before tax) \$95.15

### Withdrawing part of a Term Deposit

Term Deposit rates change depending on the amount you’ve invested. If you break some of your investment, it might drop the remaining deposit to a lower tier — which means you’ll earn a lower interest rate for the rest of your deposit.

If you have a Term Deposit of two years or more, you can access a portion (up to 20%) of your initial investment at any time without reducing the interest you will receive on that portion.

## Apply to break your Term Deposit

We'll need to verify your identity to ensure the safety of your funds first. Your Term Deposit can only be broken to a New Zealand Bank account.