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

A BNZ term deposit is one of the most straightforward ways to put idle savings to work — you lock in a fixed interest rate for a set period, and BNZ pays you that rate regardless of what happens to the Official Cash Rate (OCR) in the meantime. But with rates shifting regularly and the big four banks all competing for your deposit dollar, knowing exactly what BNZ offers — and whether it’s the right fit for your situation — takes a bit more than a quick Google. This guide covers everything: current rates across all terms, how to open an account, what happens at maturity, the real cost of breaking early, and how BNZ stacks up against the rest of the market.

BNZ Term Deposit Rates: What’s on Offer

BNZ offers term deposits ranging from 30 days out to five years, with a minimum deposit of $1,000. Rates are tiered by term length, and — as with most NZ banks — the most competitive rates tend to cluster in the six-month to one-year range, where banks compete hardest for retail deposits.

The table below gives a representative snapshot of BNZ’s rate structure. These figures are indicative only — BNZ adjusts its carded rates in response to RBNZ OCR decisions and competitive pressure, sometimes with little notice. Always confirm the live rate at bnz.co.nz before committing funds.

Term	Indicative Rate (p.a.)	Interest Paid	Minimum Deposit	Early Break?
30 days	As of writing — check bnz.co.nz	At maturity	$1,000	Yes (with penalty)
60 days	As of writing — check bnz.co.nz	At maturity	$1,000	Yes (with penalty)
90 days	As of writing — check bnz.co.nz	At maturity	$1,000	Yes (with penalty)
6 months	As of writing — check bnz.co.nz	At maturity	$1,000	Yes (with penalty)
1 year	As of writing — check bnz.co.nz	At maturity or monthly	$1,000	Yes (with penalty)
18 months	As of writing — check bnz.co.nz	At maturity or monthly	$1,000	Yes (with penalty)
2 years	As of writing — check bnz.co.nz	Monthly or quarterly	$1,000	Yes (with penalty)
3–5 years	As of writing — check bnz.co.nz	Monthly or quarterly	$1,000	Yes (with penalty)

One feature worth knowing about: BNZ periodically offers a rollover bonus rate for customers reinvesting a maturing BNZ term deposit. This isn’t always advertised prominently, so it pays to ask your branch or check your maturity notice carefully before deciding whether to stay with BNZ or shop around.

For a live, side-by-side view of rates across all NZ banks, our term deposit rates comparison is updated regularly and covers the full market.

How BNZ Term Deposit Rates Compare to Other Banks

BNZ is one of New Zealand’s big four banks — alongside ANZ, ASB, and Westpac — and its term deposit rates generally sit within a tight band of the other three. On any given term, the spread between the big four is typically less than 20 basis points (0.20%). That might sound trivial, but on a $50,000 deposit over 12 months, the difference between 4.80% and 5.00% is $100 — not nothing.

Where the more meaningful differences emerge is between the big four and the mid-tier banks. Institutions like TSB, The Co-operative Bank, SBS Bank, and Heartland Bank have historically offered slightly higher rates to attract retail deposits, since they don’t have the same brand recognition or branch networks. If you’re depositing a significant sum and your priority is maximising return, it’s worth widening your search beyond BNZ alone.

For a direct comparison with another major bank, see our Westpac term deposit rates guide, which uses the same structure for easy comparison.

What Drives BNZ’s Rate Decisions?

BNZ sets its carded rates based on several factors:

• The RBNZ Official Cash Rate (OCR): The OCR is the primary lever. When the RBNZ cuts the OCR, wholesale funding costs fall and deposit rates typically follow. When the OCR rises, deposit rates tend to rise too — though banks don’t always pass on the full movement immediately.
• Wholesale swap rates: For longer terms (one year and beyond), banks use interest rate swap markets to hedge their funding costs. The shape of the swap curve influences whether longer-term deposits pay more or less than shorter ones.
• Competitive pressure: If a rival bank lifts its 6-month rate significantly, BNZ will often respond to avoid losing deposits.
• BNZ’s own funding needs: If BNZ needs to raise a particular tenor of funding, it may temporarily lift rates on that specific term.

The practical implication: rates can change any business day. If you see a rate you’re happy with, locking it in sooner rather than later protects you from a potential cut.

How to Open a BNZ Term Deposit

Opening a BNZ term deposit is straightforward, but the process differs slightly depending on whether you’re an existing BNZ customer.

Existing BNZ Customers

1. Log in to BNZ Internet Banking or the BNZ app.
2. Navigate to Apply and select Term Deposit.
3. Choose your deposit amount, term, and interest payment frequency.
4. Select your maturity instruction — auto-renew, transfer to a nominated account, or contact you to decide.
5. Confirm and fund from your existing BNZ account. The deposit typically starts the same business day if funded before the cut-off time.

New BNZ Customers

1. You’ll need to open a BNZ transaction account first. This can be started online at bnz.co.nz or in branch.
2. Bring valid photo ID (NZ passport or driver licence), your IRD number, and proof of address (a recent utility bill or bank statement).
3. Once your transaction account is active, you can apply for a term deposit through Internet Banking or in branch.
4. If funding from another bank, allow one to two business days for the inter-bank transfer to clear before your term deposit can start.

Negotiating a Rate

BNZ publishes carded (standard) rates, but these aren’t necessarily the best rate available. If you’re depositing a larger sum — typically $50,000 or more — it’s worth calling BNZ directly or speaking to a relationship manager to ask about a negotiated rate above the carded rate. Banks have discretion to offer better terms for larger deposits, and the worst they can say is no.

For more background on BNZ as an institution — its history, products, and how it fits into the NZ banking landscape — see our BNZ bank overview.

Interest Payment Options Explained

How and when BNZ pays your interest matters more than many depositors realise — it affects both your cash flow and your effective return.

At Maturity

For terms under 12 months, interest is almost always paid at maturity (the end of the term). This is the simplest option and typically delivers the highest effective return, because the full principal earns interest for the entire term without any early withdrawals.

Monthly or Quarterly

For terms of 12 months and longer, BNZ offers the option to receive interest monthly or quarterly, paid directly to a nominated BNZ transaction account (or in some cases, to an account at another bank). This is popular with retirees or anyone relying on term deposit income to cover living expenses.

The trade-off: when interest is paid out regularly rather than compounding to maturity, the effective annual return is marginally lower. Over a two-year term, the difference is small but real. If you don’t need the income stream, choosing to receive interest at maturity will generally leave you slightly better off.

Tip: If you’re using a term deposit as part of a retirement income strategy, Sorted’s retirement planning tools can help you model how different interest payment frequencies affect your overall income picture.

What Happens When Your BNZ Term Deposit Matures?

Maturity management is one of the most overlooked aspects of term deposit investing. Here’s what you need to know.

Your Options at Maturity

• Auto-renew: BNZ will roll your deposit (principal plus any accumulated interest) into a new term deposit at the current carded rate for the same term. This is the default if you don’t provide instructions.
• Withdraw to your account: The full balance transfers to your nominated transaction account, ready to use or reinvest elsewhere.
• Reinvest with top-up: Add additional funds to the maturing deposit and reinvest for a new term — a good option if you’ve been saving alongside the deposit.
• Change the term: Reinvest for a different term length if you want to adjust your strategy based on the current rate environment.

The Auto-Renewal Trap

If you do nothing, BNZ will auto-renew at the current carded rate — which may be materially different from your original rate. In a falling rate environment, this could mean rolling into a significantly lower rate without realising it. BNZ will send a maturity notice in advance (typically by email or letter), giving you a window to act. Set a calendar reminder for a week before your maturity date so you have time to compare rates across the market before deciding.

Breaking a BNZ Term Deposit Early

Term deposits are designed to be held to maturity, and breaking one early comes at a cost. BNZ will generally allow an early withdrawal, but you’ll pay a break penalty.

How the Penalty Works

The most common approach is a rate reduction on the interest already earned. Rather than receiving your contracted rate for the period you’ve held the deposit, BNZ recalculates your interest at a reduced rate — sometimes significantly lower than what you agreed to. The exact reduction depends on how much of the term remains and prevailing market conditions at the time of the break.

In some cases — particularly if rates have risen sharply since you opened the deposit — the break cost could mean receiving little or no interest at all, though you will always get your principal back.

When to Consider a Shorter Term Instead

If there’s any realistic chance you’ll need access to the funds before the term ends, consider:

• A shorter term: Rolling 90-day deposits gives you a decision point every three months without the break penalty risk.
• A notice saver account: BNZ and other banks offer notice saver accounts that require you to give notice (typically 32 or 90 days) before withdrawal. Rates are usually lower than term deposits but higher than standard savings accounts, and there’s no break penalty.
• Laddering: Split your savings across multiple terms (e.g., 3 months, 6 months, 12 months) so a portion matures regularly. This balances liquidity with the higher rates available on longer terms.

BNZ Term Deposit vs BNZ Savings Accounts

BNZ offers several savings account options that sit alongside term deposits. Understanding the difference helps you choose the right home for each pool of money.

Feature	BNZ Term Deposit	BNZ Rapid Save / Savings Account
Rate type	Fixed for the term	Variable — can change any time
Access to funds	Locked in (break penalty applies)	At-call — withdraw any time
Typical rate	Higher	Lower
Best for	Savings you won’t need for a defined period	Emergency fund, short-term savings
Interest certainty	High — locked in at opening	Low — rate can be cut at any time

The general rule: money you know you won’t need for at least 90 days belongs in a term deposit. Money you might need at short notice belongs in an at-call savings account. For most people, the right answer is a combination of both.

Tax on BNZ Term Deposit Interest

Interest earned on a BNZ term deposit is taxable income in New Zealand. BNZ will deduct Resident Withholding Tax (RWT) from your interest payments at the rate linked to your IRD number. The standard RWT rates are 10.5%, 17.5%, 30%, 33%, or 39%, depending on your income bracket.

When you open a term deposit, make sure BNZ has your correct IRD number and the right RWT rate on file. If BNZ doesn’t have your IRD number, they’re required to deduct RWT at 45% — well above the top marginal rate. Getting this right at the outset avoids overpaying tax and the hassle of claiming a refund from IRD later.

Interest is generally taxable in the income year it’s received (or credited to your account), not when it accrues. For a 12-month deposit with interest paid at maturity, all the interest falls into the tax year the deposit matures. For monthly interest payments, each payment is taxable in the month received. If you’re unsure how term deposit income affects your overall tax position, Consumer NZ’s personal finance resources offer useful general guidance, or speak to a tax adviser.

Is a BNZ Term Deposit Safe?

BNZ is a registered bank regulated by the Reserve Bank of New Zealand (RBNZ), which sets capital adequacy, liquidity, and governance requirements designed to ensure banks can withstand financial stress. BNZ is ultimately owned by National Australia Bank (NAB), one of Australia’s largest banks, which provides an additional layer of financial strength.

New Zealand does not currently have a government-backed deposit guarantee scheme equivalent to Australia’s Financial Claims Scheme. However, the RBNZ’s Open Bank Resolution (OBR) policy provides a framework for resolving a failing bank while keeping it operational, with the aim of protecting depositors to the greatest extent possible. In practice, a major bank like BNZ failing is considered an extremely low-probability event, but it’s worth understanding the framework.

For depositors with very large sums, spreading funds across two or more institutions is a common risk-management approach — not because BNZ is considered risky, but as a general principle of not concentrating all assets in one place.

If you’re also considering a BNZ home loan alongside your savings, our BNZ mortgage calculator can help you model repayments and compare borrowing costs.

Practical Tips for Getting the Most from a BNZ Term Deposit

• Compare before you commit: Even a 0.15% difference matters on large sums. Check our NZ term deposit rates comparison before opening.
• Ask about negotiated rates: For deposits of $50,000 or more, always ask BNZ if they can beat the carded rate.
• Watch the OCR calendar: The RBNZ publishes its OCR decision dates in advance. If a cut is expected soon, locking in a longer term before the decision could protect your rate.
• Use a ladder strategy: Rather than putting everything into one term, split across 90-day, 6-month, and 12-month deposits. You maintain some liquidity while still capturing competitive rates.
• Set maturity reminders: Don’t let your deposit auto-renew without checking the new rate. A week before maturity, compare rates across the market.
• Confirm your RWT rate: Make sure BNZ has your correct IRD number and tax rate on file to avoid unnecessary over-deduction.
• Consider the interest payment frequency: If you don’t need the income, choosing interest at maturity rather than monthly maximises your effective return.

For broader context on how term deposits fit into a personal savings and investment strategy, Sorted — the free, independent financial guidance site run by Te Ara Ahunga Ora Retirement Commission — is an excellent starting point.

Frequently Asked Questions

What is the current BNZ term deposit rate for 1 year?

BNZ’s 1-year term deposit rate changes regularly in response to RBNZ OCR decisions and competition from other banks. Rather than quoting a figure that may be out of date, check the live carded rate at bnz.co.nz or our NZ term deposit rates comparison page. If you’re depositing $50,000 or more, ask BNZ about a negotiated rate above the published carded rate.

What is the minimum amount for a BNZ term deposit?

The minimum deposit for a BNZ term deposit is $1,000. There’s no published maximum, though very large deposits may be subject to negotiated rates. If you have less than $1,000 to save, a BNZ Rapid Save or similar at-call savings account is the appropriate alternative.

Can I break a BNZ term deposit early?

Yes, BNZ will generally allow an early break, but a penalty applies. The most common penalty is a reduction in the interest rate paid on the period you held the deposit — meaning you receive less interest than your contracted rate, though your principal is always returned in full. The exact cost depends on how much of the term remains and current market rates. If you think you might need the funds early, consider a shorter term or a notice saver account to avoid this penalty.

How is interest on a BNZ term deposit taxed?

Interest earned is taxable income. BNZ deducts Resident Withholding Tax (RWT) at the rate linked to your IRD number — typically 10.5%, 17.5%, 30%, 33%, or 39% depending on your income. If BNZ doesn’t have your IRD number, they must deduct RWT at 45%. Make sure your IRD number and correct RWT rate are on file when you open the deposit.

What happens if I don't give BNZ instructions when my term deposit matures?

If you don’t provide maturity instructions, BNZ will typically auto-renew your deposit for the same term at the current carded rate. This rate may be higher or lower than your original rate. To avoid being locked in at an unfavourable rate, set a calendar reminder for a week before maturity and compare rates across the market before deciding whether to renew with BNZ or move your funds.

Is my money safe in a BNZ term deposit?

BNZ is a registered bank regulated by the Reserve Bank of New Zealand (RBNZ), which sets strict capital and liquidity requirements. New Zealand doesn’t currently have a government deposit guarantee scheme, but the RBNZ’s Open Bank Resolution (OBR) framework provides a mechanism for managing a failing bank while protecting depositors to the greatest extent possible. BNZ is considered one of NZ’s most financially sound institutions. For very large sums, some depositors spread funds across multiple banks as a general risk-management measure.