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KiwiSaver vs Term Deposit Calculator

Compare KiwiSaver returns (with employer and government contributions) against a term deposit. Factor in lock-in periods, tax rates, and fees.

By Konstantin IakovlevPublished 28 March 2026Last reviewed
Data stays on your deviceRBNZ market data

About this calculator

This calculator implements KiwiSaver rules + RBNZ term deposit data from Inland Revenue (IRD) + RBNZ. Last consulted 3 April 2026. Verify the figures yourself by following the link.

Current rates: KiwiSaver vs Term Deposit

Indicative — 2026 market rates
  • •Typical balanced KS return: 5–6% long-term
  • •Typical 1-yr term deposit: 5.0–5.5%
  • •KS employer match: 3.5% of salary (vs TD: $0)
  • •KS govt contribution: Up to $260.72/yr
  • •KS tax (PIR): Max 28%
  • •TD tax (RWT): Your marginal (up to 39%)

Source: RBNZ — Rates

Disclaimer

This calculator provides estimates for general information purposes only. Results should not be relied upon as professional financial, tax, or legal advice. Tax rates and thresholds are based on publicly available IRD data and may change. Always consult a qualified tax agent or financial adviser for advice specific to your circumstances.

How KiwiSaver compares to a term deposit

Both grow your money, but KiwiSaver gets employer (3.5%) and government ($260.72) contributions that term deposits don't. Term deposits offer accessibility KiwiSaver doesn't.

  1. 1

    KiwiSaver total annual inflow

    KS_inflow = member_contrib + employer(3.5%) + govt_contrib($260.72)

    Effectively a 7% employer-match-equivalent for 3.5% member rate.

  2. 2

    KS growth (typical 5-7% balanced fund)

    KS_balance(t) = compound(inflow, return_5-7%, t years, PIE 28% tax)

    PIE-taxed at PIR (max 28%) — better than RWT for high earners.

  3. 3

    Term deposit growth (5% typical, fixed)

    TD_balance(t) = principal × (1 + 5% × (1 − RWT))^t

    Interest taxed at RWT (your marginal rate, up to 39%) — worse for high earners.

  4. 4

    Accessibility tradeoff

    TD: liquid (can withdraw at maturity) · KS: locked until 65 (or first home)

    TD = flexibility but no employer/govt boost. KS = boost but locked.

Worked example

Inputs: $80k salary, $50k starting balance, 30 years, 6% KS / 5% TD

Result: KS final: ~$890k (with employer + govt). TD final: ~$280k. KS wins by ~$610k.

Frequently Asked Questions

Should I put extra money into KiwiSaver or a term deposit?
The choice between extra KiwiSaver contributions and a term deposit depends on your goals, timeline, and tax situation. KiwiSaver has the major advantage of the government's 50-cent-in-the-dollar top-up (up to $260.72 per year), which is essentially a guaranteed 50% return on the first $1,042.88 you contribute annually — no term deposit can match that. KiwiSaver in a growth or balanced fund also historically provides higher long-term returns (6–8% p.a. before fees and tax) than term deposits (currently around 4.5–5.5% p.a. in 2025). However, KiwiSaver funds are locked in until age 65 (with limited exceptions), while a term deposit is accessible after its term ends. For money you might need in the next 3–5 years, a term deposit gives you liquidity KiwiSaver cannot. For long-term retirement savings, KiwiSaver — especially with the government top-up — is usually the better choice. Source: Sorted — Comparing Saving Options (sorted.org.nz).
What are current NZ term deposit rates?
As of early 2025, New Zealand term deposit rates have eased from their 2023 peaks following the Reserve Bank of New Zealand's (RBNZ) OCR cuts. Major banks are offering 12-month term deposit rates in the range of 4.0%–5.0% p.a., with some smaller banks and credit unions offering slightly higher rates of 5.0%–5.5%. Shorter terms (30–90 days) typically offer 3.5%–4.5%, while longer terms (18–24 months) may be similar to or slightly below the 12-month rate as banks price in expected future OCR movements. Interest on term deposits is paid at maturity or annually and is subject to Resident Withholding Tax (RWT) at your marginal rate. Rates vary across providers, so it pays to shop around using comparison sites such as interest.co.nz or sorted.org.nz for the latest offerings. Source: interest.co.nz — Term Deposit Rates (interest.co.nz/saving/term-deposits).
What are the liquidity differences between KiwiSaver and term deposits?
Liquidity — or how easily you can access your money — is one of the biggest practical differences between KiwiSaver and term deposits. KiwiSaver funds are locked in until you turn 65 or meet NZ Superannuation eligibility age, with only limited early withdrawal exceptions: purchasing your first home (after three years of membership), significant financial hardship, serious illness or disability, permanent emigration from New Zealand (excluding Australia), or terminal illness. Term deposits, by contrast, have a fixed term (typically 30 days to 5 years) but can usually be broken early — though the bank may charge a break fee or reduce the interest rate paid. Most term deposits allow you to choose your term to match your timeline. This liquidity difference means KiwiSaver is unsuitable for emergency funds or money you may need in the short term. Source: IRD — KiwiSaver Withdrawals (ird.govt.nz/kiwisaver); RBNZ — Term Deposits.
How does KiwiSaver's employer contribution change the comparison?
For employees in paid employment, KiwiSaver has a significant advantage over term deposits: the mandatory employer contribution of at least 3% of your gross salary, on top of your own minimum 3% contribution. This employer contribution is essentially free money that immediately doubles the rate of return on your minimum employee contributions (before any investment growth or government top-up). For example, on a $70,000 salary, both you and your employer contribute $2,100 per year at the 3% rate — meaning your KiwiSaver balance grows by $4,200 before any investment returns or government top-up. No bank term deposit can offer a matching employer contribution. For those who can afford to contribute only the minimum, staying in KiwiSaver and capturing the employer contribution is almost always more beneficial than redirecting those funds to a term deposit. Source: IRD — Employer KiwiSaver Contributions (ird.govt.nz/kiwisaver).

Compares the net return of KiwiSaver vs a term deposit over time, factoring in employer contributions, government contributions, management fees, PIE tax (for KiwiSaver) vs RWT (for term deposits), and the lack of access to KiwiSaver funds before age 65.

How this calculator works

KiwiSaver return = contributions + employer contributions + government contributions − fees, compounded at fund return rate, taxed at PIR. Term deposit return = principal × interest rate, taxed at RWT rate. Key advantage of KiwiSaver: employer match (3%) and government contribution ($260.72/yr) that term deposits do not offer.

KiwiSaver vs Term Deposit: Key Differences

Employer matchKiwiSaver: 3% of salary | Term deposit: none
Government contributionKiwiSaver: up to $260.72/yr | Term deposit: none
Tax on returnsKiwiSaver: PIR (max 28%) | Term deposit: RWT (up to 39%)
Best 1-yr term deposit rate (2026-27)~5.0%
KiwiSaver growth fund long-term return~7–8% p.a. (before fees)
LiquidityTerm deposit: accessible at maturity | KiwiSaver: locked until 65

KiwiSaver returns are variable and not guaranteed. Term deposit rates change frequently.

Worked Examples

$50,000 salary, contributing 3% to KiwiSaver vs same dollar amount in term deposit, over 10 years

KiwiSaver wins by approximately $20,000+ due to employer 3% match and annual $260.72 government contribution.

  1. Employee contribution: $50,000 × 3% = $1,500/yr
  2. Employer match: $1,500/yr (additional, not from your salary)
  3. Government contribution: $260.72/yr
  4. Total KiwiSaver contributions per year: $3,460.72
  5. At 7% net fund return over 10 years: ~$48,500 accumulated
  6. Term deposit: same $1,500/yr personal contribution at 5%: ~$18,900 accumulated
  7. KiwiSaver advantage: ~$29,600 (before tax adjustments)

$10,000 lump sum: 6% term deposit vs KiwiSaver growth fund at 7% for 10 years

KiwiSaver growth fund ~$18,771 (after 0.5% fees). Term deposit at 6% after RWT ~$14,802.

  1. Term deposit: $10,000 × 1.06^10 = $17,908 (before RWT tax)
  2. Term deposit taxed at 33% RWT: net return ~4.0% → $10,000 × 1.04^10 = $14,802
  3. KiwiSaver growth fund at 7%: $10,000 × 1.07^10 = $19,672 (before fees)
  4. KiwiSaver after 0.5% management fee (net 6.5%): $10,000 × 1.065^10 = $18,771
  5. KiwiSaver PIR taxed internally at max 28%
  6. Note: KiwiSaver lump sum is not accessible until age 65

Built and maintained by Konstantin Iakovlev. Data sourced from the IRD and official New Zealand government sources.

Last reviewed:

Official Sources

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