Best Term Deposit Rates NZ 2026: Who Pays the Most
Term deposit rates in NZ sit around 4–4.35% in 2026, and the smaller banks consistently beat the big four. Here's who pays the most, by term, and how to ladder them so you're not locked out of better rates.
The short version
- Rates move constantly, always check the bank's current rate (or Canstar / interest.co.nz / MoneyHub) before you lock in.
- Instead of putting $20,000 into one 12-month term, split it into four $5,000 deposits maturing 3 months apart.
- Breaking a term deposit early usually means keeping your money but losing most of the interest: the bank recalculates the whole term at a much lower rate.
Kia ora. A term deposit is the simplest way to earn a guaranteed return on cash you don't need for a while. The catch: the rates vary more than people realise, and the bank with your everyday account is rarely the one paying the most.
Work out your own number: the savings calculator shows what a rate turns your balance into over time, so you can compare terms properly.
The short version
- 2026 term deposit rates sit roughly 4.0%–4.35%, depending on term and bank.
- Smaller banks beat the big four, Rabobank, SBS, TSB, Heartland and the Co-operative Bank consistently pay more than ANZ/ASB/BNZ/Kiwibank/Westpac.
- Longer terms pay a little more, but lock your money up longer, ladder them so some matures regularly.
Indicative 2026 rates by term
| Term | Top rate (approx) | Who's competitive |
|---|---|---|
| 12 months | ~4.0–4.8% | Rabobank, Heartland, SBS, TSB |
| 2 years | ~4.0% | Co-operative, Heartland, SBS, TSB, Westpac |
| 3 years | ~4.15% | Heartland |
| 4 years | ~4.25% | Heartland |
| 5 years | ~4.35% | Heartland |
Rates move constantly, always check the bank's current rate (or Canstar / interest.co.nz / MoneyHub) before you lock in.
Steady tip: The whole point of a term deposit is the rate, so it's worth shopping beyond your main bank. Steady shows your term deposits alongside your everyday accounts so you can see your full position when one's about to mature. Join the waitlist for early access.
Should you use a term deposit at all?
- Yes, if: you've got cash you won't need for 6–12+ months and want a guaranteed, no-risk return (e.g. a house deposit you're protecting, or an emergency buffer beyond your on-call fund).
- Maybe not, if: you might need the money sooner, breaking a term deposit early usually costs you most of the interest. An on-call or notice saver is more flexible.
- Probably not, if: you're investing for 10+ years, over that horizon, a diversified fund has historically beaten term-deposit rates. See how to start investing in NZ.
The laddering trick
Instead of putting $20,000 into one 12-month term, split it into four $5,000 deposits maturing 3 months apart. You always have some cash coming free soon, you're never fully locked out of a better rate, and you still earn close to the headline rate. Simple, and most people never do it.
Term deposit or savings account?
- Emergency fund: a savings account, always. The point is getting at it straight away.
- A house deposit you'll use in one to two years: a term deposit, or a ladder of them, protects it and fixes the rate.
- Money you won't need for ten years or more: probably neither. That's what investing and KiwiSaver are for.
Breaking a term deposit early usually means keeping your money but losing most of the interest: the bank recalculates the whole term at a much lower rate. Some also need notice before they release the funds, so a term deposit isn't always available in a hurry.
Locking money away is easier when you know how far ahead your everyday account is covered. How far ahead you can forecast your balance helps decide how much can safely go into a term.
The bottom line
NZ term deposit rates in 2026 are ~4–4.35%, and the smaller banks pay more, so don't default to your everyday bank. Use them for money you won't need for a while, ladder them for flexibility, and check the current rate before locking in.
Steady tip: Steady tracks your savings, term deposits, and KiwiSaver in one place so you always know your real position. Join the waitlist.
Written by Sam Wilson
Founder, Steady
Sam is a New Zealand founder building Steady, a personal finance app designed for Kiwis, integrated with every major NZ bank via Akahu. He writes about money, bank integrations, and what actually works for everyday New Zealanders.More about Sam
Steady tracks your deposit to the month you'll cross the line. Join the waitlist for early access.
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