(Article originally published 26th January, 2023; updated 30th March, 2023)
Kiwi tend to take a pretty “set-and-forget” approach to choosing our savings accounts.
The problem with this is that banks generally launch savings products on a higher interest rate, only to manage that rate downwards as they introduce newer products.
So, unless you’re actively monitoring your options, you could inadvertently find yourself using an old savings product that’s earning you stingy interest rates and that’s no longer right for what you need.
With interest rates having moved upwards over the last 12 months, now’s a really good time to review your approach.
So, this article takes a look at the main savings accounts on offer in New Zealand – including Squirrel’s new high interest on-call account, offering one of the highest rates of any equivalent savings account in market – and how they all stack up.
Interest rates are current as at 30th March 2023.
Looking to the banks, then – what are your savings account options?
Broadly speaking, there are four types of bank savings account on offer in the NZ market – Bonus Saver, Simple Saver, Online Call and Notice Saver accounts.
1. Bonus Saver accounts
Bonus Saver accounts generally pay a reasonable amount of interest, as long as you don’t make any withdrawals during the month and, in most cases, also make a regular deposit.
There are a lot of quirks with these products (have a go at deciphering the terms for Rabobank’s Premium Saver if you can) and if you don’t follow those rules to the letter, you’ll find yourself missing out on maximum returns.
My view is that these products are well out-of-date with customer needs, and that most savers would be far better off with a simple savings product.
Here’s the full list of Bonus Saver accounts out there in the market:
| Base rate | Bonus rate | Combined rate | |
| Rabobank Premium Saver | 2.00% | 2.25% | 4.25% |
| Co-operative Step Saver | 1.60% | 2.50% | 4.10% |
| ASB Savings Plus | 1.55% | 2.00% | 3.55% |
| ANZ Serious Saver | 0.85% | 2.90% | 3.75% |
| Westpac Bonus Saver | 0.80% | 2.95% | 3.75% |
| SBS Incentive Saver | 0.55% | 2.60% | 3.15% |
2. Simple Saver accounts
These days, Simple Saver accounts aren‘t all too different from Online Call accounts – given that most of us do our banking and move money around online.
Here’s a summary of the simple saver products out there in the market, with BNZ being the winner thanks to its competitive rate.
| BNZ Rapid Save | 3.95% |
| TSB Horizon Savings | 3.35% |
| Westpac Simple Saver | 2.10% |
3. Online call accounts
Online call products were introduced in NZ to reflect benefits for the banks (in relation to some RBNZ rules), rather than to meet customer need. And as a result, what should have been a hero, low-cost, online savings product has been relegated to lemon status.
Instead, notice saver accounts (up next on the list) have increasingly become the savings product used by banks to compete for rate-sensitive savers.
| Heartland | 4.10% |
| Kiwibank | 3.85% |
| TSB WebSaver | 3.35% |
| Rabosaver | 3.45% |
| ASB | 2.25% |
| ANZ | 2.25% |
| SBS i-Save | 1.65% |
| Co-operative | 1.80% |
| Westpac (no longer available for new accounts) | 2.10% |
4. Notice Saver accounts
Notice Saver accounts are the next iteration of a behaviour-based savings account.
My view is that Notice Saver accounts are easily the best short-term bank savings product available, as long as you don’t need on-call access to your savings. They make more sense than Bonus Saver accounts and feel more akin to a short-term deposit.
Heartland stands out as having the best 32-day Notice-Saver rate at 4.75% - and with a Fitch Rating of BBB, it makes sense that Heartland is paying more on this product. By contrast, Westpac currently pays 4.00% (with a Fitch rating of A+) and Kiwibank currently pays 4.05% (with a rating of AA).
Although 90-day Notice Saver products offer a strong rate, I’d argue that savers would be better off opting for a 32-day Notice Saver account alongside a portfolio of laddered term deposits.
| Notice period | Rate | |
| 32 days | Westpac | 4.00% |
| Heartland | 4.75% | |
| Kiwibank | 4.05% | |
| 60 days | Rabobank | 4.50% |
| 90 days | Heartland | 5.15% |
| Kiwibank | 4.75% |
Introducing another option: Squirrel's new high-interest On-Call account
Squirrel has now launched its new On-Call account, currently offering a no strings attached interest rate of 4.00% p.a.* - one of the highest rates of any equivalent savings account in the New Zealand market.
Unlike some of those options I covered off earlier, savers aren’t penalised with lower rates if they make a withdrawal, or don’t deposit funds during any given month. And unlike notice saver accounts, you’ve also got the ability to withdraw money to your main bank account in as little as 2 hours on business days.
That interest rate is variable, too, which means that as the OCR goes up (or down) the rate of return on Squirrel’s On-Call account will follow suit.
The On-Call account is linked to Squirrel’s peer-to-peer term investment platform, so savers also have the option to earn higher returns by investing in Kiwi residential mortgages and personal loans, if they choose to. In February 2023, the average rate of return earned by Squirrel’s P2P investors was 7.02% p.a.
You can find out more about the Squirrel On-Call account, and peer-to-peer term investment platform on our website.
* Interest on the Squirrel On-Call Account launched on the 24th January 2023, at a rate of 3.50% p.a.