Top Saving Accounts
The best accounts if your a taxpayer at 19.5% or below are online accounts as listed below.
No Withdrawal penalties:
Good Account but penalty if withdrawals made
They generally have the best rates over the long term. Each has slightly different terms but look below to find out more.
If you pay 33% tax then you would be better looking at a CASH PIE account that most of the major banks offer this. The reason is because you will only have to pay 30% tax on your savings rather than 33%. Check out our Cash PIE section below for more information.
Kiwibank Notice Saver
The Notice Saver has been released from Kiwibank as the best of both worlds of term deposit without the term & a savings account.
You need to give 32 days notice to withdraw your money.
Deposit any time
Minimum $2000 deposit
Returns calculated daily
PIE compliant so can benefit if pay tax at 30% tax.
If you Pay 33% Tax Best Accounts are Cash PIE Accounts:
Instant Access Savings Accounts: CASH PIE's
Cash PIE accounts are the best as they are taxed at maximum rate of 30% (no matter what your tax rate is!)
TSB Cash PIE
(NOTE: This is managed by Guardian Trust not TSB)
Term Deposits: Standard & CASH PIE
Term deposit rates fluctuate according to outlook of interest rates in the future. If the markets think the rates are going to go up, they are likely to start increasing rates for longer term term deposits.
These rates can change at any time so always check with the bank for the latest rates.
CASH PIE Term Deposits
If you're a 33% taxpayer,
Kiwibank, ASB & UDC finance company (associated with ANZ) are currently offering Term deposit PIE accounts as discussed above and so can offer some of the best deals around.
When Reserve Bank changes key interest rates, check the rates they have been offering.
If they rates go down:
You need to lock your rate as soon as possible after the drop as it is likely rates will go down.
If rates go up,
Hold off to see what happens to the rate as it is likely to go up. They don't always do this straight away
We have highlighted of this on the blog
when interest rates changed by the Reserve Bank
When the Reserve Bank dropped rates by 0.50% on a Thursday. Most of the banks dropped their term deposits straight away. ASB didn't drop their rate until Saturday (8.3% to 7.75%) and Kiwibank until Monday (8.2% to 7.8%). So you would have had to have locked in your rate the day before these days. So move quickly before these rates change, they can chane at any time and banks are quicker to change these if the change is rates is bigger.
If rates go up:
May be worth holding out as rates may change at the banks in the future and you may have fixed at a lower rate.
Currently at these low rates they may start to go up once this financial crisis is over.
NZ Government's Retail deposit protection scheme
Offers insurance on retail deposits in a bank up to $500,000 or $250,000 in a non bank up to 12 October 2010.
Most of the major banks aren't thinking of extending their schemes past 12 October as they now feel the wort of the crisis is over.
To find out more about the scheme click here
To find if your institution is covered click here
Don't forget Kiwisaver seems good idea if non Tax payer or Self employed as can contribute minimum amount of $1040 & government will match this contribution
For more information go to the Government's Kiwisaver website
Compare at Sorted WebsiteTax Advice Inland Revenue of New Zealand
has a great website for more information about your tax questions
Australian Savings Accounts
If you are looking to migrate to Australia then you can potentially start to save there in Australia dollars whilst you are building up your nest egg for the trip to OZ.
Current best deals if you have savings in Australia are:
USaver by NAB
St George's Internet account
Check but most savings accounts in Australia should be protected by Australian Government guarantee scheme but always with the bank concerned.
Always keep an eye out for Reserve Bank of Australia hinting about lowering or raising interest rates as if this is the case it may be worth fixing your rates.
Australian Term Deposits
At present term deposits offer better deals than instant access accounts, but always be aware if trying to fix for too long to make sure rates arent going to go up as if you fix for a long period and rates should go up you could be stuck with a low paying account
Some of the best offers are available from Westpac at present (They seem to consistently offer higher rates for their savers).
Other banks have lower term deposit rates but remember this can change at any time.
Foreign Exchange if moving to Australia
It is usually better to transfer your money with a foreign exchange company rather than with your bank as you get far better rates tansferring New Zealand to Australian Dollars
Examples of companies available in this area are NZ Forex
Have personally used NZ Forex & found their service excellent.(A subsidary of Macquarie Bank)Hifx
You can of course still use your local bank in NZ but always check out the rate you are offered as this can add up to a few hundred or thousand dollars if you are transferring tens of thousands of dollars!
To check charts for how a particular currency is performing compared to the past there is a great webpage for comapring its past performance. This site is great as you can look back at 5 years of exchange rates.
Save at least 3 months & ideally 6 months salary in a safe instant access accountin case of an emergency.
Watch out for bank charges especially ATM surcharges if you withdraw money from another bank's ATM.
Don't draw cash on credit card as there is an extra charge ranging from 1.5-2.75% and you pay interest on the card staright away.
Try to earn money on credit cards with cash back or frequent flyer points.
Clear your debts before increasing your savings is usually the best way to save your savings.
Use your kiwisaver allowances if you can afford this as you get contributions from your employer and the government!
Make use of credit cards offering cheaper introductory interest rates if you are in debt on the cards but ideally these should be reduced first as they often carry the highest interest rates of all the types of borrowing available. Personal loans are typically much cheaper than credit cards.
If you want to pay back a loan early, check out the redemption (or early payback) penalities as they can add up to a large amount.
Consider whether you need any payment protection a company may be offering on a loan.
Disclaimer: Kiwi Money Savers does not provide financial advice and you should make your own decisions based after seeking further independent financial advice.