BNZ Term Deposit: Rates, Terms and How to Open in 2026

A BNZ term deposit is a straightforward way to put idle savings to work: you lock in a fixed interest rate for a set period, and BNZ pays that rate regardless of what the Official Cash Rate does in the meantime. This guide covers the essentials — the minimum, interest options, the Term PIE, deposit protection, breaking early, and how to open one. It is general information, not financial advice.

The basics: minimum, terms and rates

BNZ offers term deposits from 30 days to five years, with a minimum of $2,000. Rates are tiered by term, and — as with most New Zealand banks — the most competitive rates tend to cluster in the six-month to one-year range, where banks compete hardest for retail deposits. Rates change often, so the sensible move is to check the live rate on BNZ’s investment rates page or compare the whole market in our term deposit rates guide before committing.

One BNZ-specific detail worth knowing: BNZ sometimes offers a loyalty or rollover rate for customers reinvesting a maturing deposit, and this is not always advertised prominently — so check your maturity notice before deciding whether to stay or shop around. To see where the market sits at any given time, a daily comparison such as interest.co.nz is useful, and our guide to the current NZ interest rate outlook explains how the OCR feeds into deposit pricing.

The BNZ Term PIE: a tax angle for higher earners

Alongside the standard term deposit, BNZ offers a Term PIE (Portfolio Investment Entity), also from a $2,000 minimum. A PIE is taxed at your Prescribed Investor Rate (PIR), capped at 28%, rather than the marginal Resident Withholding Tax rate of up to 39% — so for higher earners it can deliver a better after-tax return on the same headline rate. The PIE option has to be chosen when you open the deposit. Our New Zealand tax rates guide explains how the PIR compares with ordinary income tax.

Interest payment options

How you are paid affects both your cash flow and your effective return. On a standard term deposit, BNZ generally pays interest either monthly or at maturity. Taking it at maturity gives the highest effective return, because the full amount keeps earning for the whole term rather than being drawn down along the way.

The Term PIE offers a wider set of frequencies — monthly, quarterly, six-monthly, annually or at maturity — which is popular with retirees who rely on the income. The trade-off is the same: drawing returns regularly rather than leaving them to compound to maturity gives a marginally lower effective return, so if you do not need the income, leaving it until the end leaves you slightly better off.

How to open a BNZ term deposit

If you already bank with BNZ, the quickest route is Internet Banking or the BNZ app, where special term rates are often shown. If you are new to BNZ, you will need to open an account and complete identity verification first. Before you confirm, have four things ready:

• The amount — at least $2,000, from an account you can transfer from.
• The term — anywhere from 30 days to five years.
• Your interest instruction — paid to your account or reinvested, and how often.
• Your IRD number and correct RWT rate (or PIR if you choose the Term PIE) so tax is deducted correctly from day one.

You will also set a maturity instruction — what happens when the term ends. It pays to choose this deliberately rather than letting the deposit auto-renew at whatever rate applies on the day.

Is your money safe?

This is where older guidance needs correcting. New Zealand now has the Depositor Compensation Scheme (DCS), live since 1 July 2025 and administered by the Reserve Bank, which protects up to $100,000 per depositor, per bank if a deposit taker fails — so BNZ’s eligible deposits are covered automatically, with nothing to sign up for. You can read the detail on the Reserve Bank’s Depositor Compensation Scheme page. BNZ is a registered bank regulated by the Reserve Bank and owned by National Australia Bank, and a major bank failing is a very low-probability event — but the practical takeaway is clear: if you hold more than $100,000, spreading it across two banks keeps the full amount protected.

Tax on your interest

Interest is taxable income, and on a standard term deposit BNZ deducts Resident Withholding Tax (RWT) at the rate tied to your IRD number — 10.5%, 17.5%, 30%, 33% or 39%, matching your income. If BNZ does not have your IRD number, it must deduct at the 45% no-notification rate, so make sure your IRD number and correct RWT rate are on file when you open the deposit; Inland Revenue’s guide to choosing the right RWT rate walks through the choice. Interest is generally taxed in the year it is received: for a one-year deposit paid at maturity, all of it falls in the year it matures; for monthly payments, each is taxed in the month received. For the Term PIE, tax is handled at your PIR instead of RWT.

Breaking a term deposit early

BNZ will generally allow an early break, but at a cost. The usual approach is a rate reduction on the interest earned to that point, so you receive less than your contracted rate — though your principal always comes back in full. If rates have risen sharply since you opened it, you could end up with very little interest. If there is a realistic chance you will need the money early, plan ahead: choose a shorter term, keep a buffer in an at-call account, or ladder across several terms so a portion always matures soon.

Term deposit vs at-call savings

A term deposit trades access for certainty. You give up the ability to touch the money for the term, and in return you get a locked rate that will not move if the OCR falls. An at-call or on-call savings account does the opposite: instant access, but a variable rate the bank can change at any time, and usually a lower one. For an emergency fund you want at-call; for money you genuinely will not need for months, a term deposit typically pays more. Our guide to a high-interest savings account in NZ covers the at-call side in detail.

How BNZ compares with other banks

BNZ’s rates usually sit within a tight band of the other big-four banks (ANZ, ASB, Westpac) — often less than 0.20% apart on a given term, though even that is worth about $100 a year on a $50,000 twelve-month deposit. The bigger gaps tend to be between the big four and smaller registered banks such as TSB, The Co-operative Bank, SBS and Heartland, which frequently pay a little more to attract deposits. For a like-for-like big-four comparison, see our Westpac term deposit rates guide; for BNZ as a whole, our BNZ bank overview; and Sorted’s independent saving guides are a good neutral starting point.

Practical next steps

• Compare before you commit — even a 0.15% difference matters on a large sum.
• Ask about a negotiated rate for $50,000 or more.
• Watch the OCR decision calendar if a cut looks likely, and lock in beforehand.
• Consider laddering across several terms rather than one big deposit.
• Set a maturity reminder so you do not auto-renew at a stale rate.
• Confirm your IRD number and RWT rate are on file.
• If you are a higher earner, weigh the BNZ Term PIE for its 28% tax cap.

Disclaimer: This article is general information about BNZ term deposits in New Zealand, not financial or tax advice, and not a recommendation of any product. Interest rates, tax rules, minimums and deposit-protection details change — the figures here reflect 2026 and should be confirmed with BNZ, Inland Revenue and the Reserve Bank before you act.

Frequently asked questions

What is the minimum for a BNZ term deposit?

The minimum is $2,000, and the same minimum applies to the BNZ Term PIE. Terms run from 30 days to five years. If you have less than $2,000, an at-call savings account is the alternative.

Is my money safe in a BNZ term deposit?

Yes. It is backed by the Depositor Compensation Scheme, which protects up to $100,000 per depositor per bank and has applied to New Zealand banks since 1 July 2025. BNZ is a Reserve Bank-regulated bank owned by National Australia Bank. Spread more than $100,000 across banks to keep it all protected.

How is BNZ term deposit interest taxed?

BNZ deducts Resident Withholding Tax at the rate tied to your IRD number (10.5% to 39%). Without your IRD number, it must deduct at 45%. A BNZ Term PIE is instead taxed at your Prescribed Investor Rate, capped at 28%, which is often better for higher earners.

Can I break a BNZ term deposit early?

Generally yes, but BNZ reduces the interest based on how much of the term remains, so you receive less than your contracted rate. Your principal is always returned in full. If you might need the funds, a shorter term or an at-call account avoids the penalty.

What happens if I give no instructions at maturity?

BNZ typically auto-renews for the same term at the current carded rate, which may be higher or lower than your original. Set a reminder about a week before maturity so you can compare rates and choose, rather than being rolled over automatically.