## 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. To break your Term Deposit or PIE Term Deposit, you’ll need to complete a .

Breaking a standard Term Deposit in the first 30 days

You won’t get any interest if you need to break a Term Deposit in the first 30 days after you set it up.

Breaking a standard Term Deposit after the first 30 days

You’ll get a lower rate of interest on the amount you withdraw as you’ll incur an Early Termination Charge. The Early Termination Charge is a reduction in the interest payable to you on the amount withdrawn and will be calculated using the following formula: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%.

Here is an example of how the Early Termination Charge is calculated:

### Example Term Deposit

 Date of Term Deposit investment 1 January 2014 Initial term 1 Year (365 days) Initial deposit \$10,000 Date of break 1 June 2014 Amount requested to break (full break) \$10,000 Term completed 5 months (151 days)

### Early Termination Charge calculation

Calculation A

Calculation B

Interest rate for a 5 month Term Deposit

As at 1 January 2014 – 4.1% p.a. (interest paid at maturity)

As at 1 June 2014 – 3.75% p.a. (interest paid at maturity)

Interest rate 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

Charge equals lesser of calculation A and B

\$72.40 Charge (Calculation B)

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

Breaking a PIE Term Deposit in the first 30 days

You cannot break your PIE Term Deposit within the first 30 days.

Breaking a PIE Term Deposit after the first 30 days

You’ll get a lower rate of interest on the amount you withdraw as you’ll incur an Early Termination Charge. The Early Termination Charge is a reduction in the interest payable to you on the amount withdrawn and will be calculated using the following formula:

Early Termination Charge = amount to be withdrawn × (days investment/365) × (‘actual rate’ less 2%), where the actual rate is the rate of return we agreed when you invested.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.

Here is an example of how the Early Termination Charge is calculated.

### Example Term Deposit

 Date of PIE Term Deposit Fund investment 1 January 2014 Initial term 1 Year (365 days) Initial deposit \$10,000 Date of break 1 June 2014 Amount requested to break (full break) \$10,000 Term completed 5 months (151 days)

### Early Termination Charge calculation

 Initial interest rate (‘actual rate’) 4.30% p.a. Total interest earned for 5 months (before tax) \$177.89 Less Break Interest Reduction 2.00% p.a. Early Termination Charge (before tax) \$82.74 Effective interest rate on withdrawn amount 2.30% p.a. Interest received after Early Termination Charge (before tax) \$95.15

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

### Withdrawing part of a Term Deposit

You won’t be paid any interest you’re owed on the amount you withdraw until the rest of the deposit matures.

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.

## What it costs

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

## Break a Term Deposit

Apply to break your Term Deposit early by filling out the .

Once you've completed the form you can:

Download the Term Deposit Terms and Conditions (PDF 40.1 KB) or pick up a copy from your local Kiwibank.

Download the Terms and Conditions for the PIE Term Deposit Fund (PDF 51.1 KB) or pick up a copy from your local Kiwibank.

Units in the Kiwibank PIE Term Deposit Fund are distributed by Kiwibank and are issued by Kiwibank Investment Management Limited. Download the , or pick up a copy from your local Kiwibank.