Financial Glossary

NZ money terms explained in plain English. No jargon, no waffle.

Banking KiwiSaver Budgeting Investing Tax Credit

Banking

Open Banking

A system that lets you securely share your bank data with third-party apps via APIs. In NZ, Akahu provides open banking connections to all major banks. You control what data is shared and can revoke access anytime.

Direct Debit

An automatic payment where a company takes money from your account on a set schedule. Used for power bills, phone plans, insurance. You authorise it once and it happens automatically.

Automatic Payment (AP)

A payment you set up yourself to go out automatically on a schedule. Unlike a direct debit (which the company controls), you control the amount and timing of an AP.

Term Deposit

Money locked in a bank account for a fixed period (3-12 months) in exchange for a higher interest rate. You can't withdraw early without a penalty. Good for savings you won't need soon.

On-Call Account

A savings account where you can deposit and withdraw money at any time. Lower interest than term deposits but instant access. Good for emergency funds.

EFTPOS

Electronic Funds Transfer at Point of Sale. The system that lets you pay with your bank card at shops. In NZ, EFTPOS transactions are usually free (unlike credit card fees).

Cheque Account

NZ term for what Americans call a 'checking account'. Your everyday transaction account for spending, receiving salary, and paying bills.

KiwiSaver

New Zealand's voluntary retirement savings scheme. You contribute a percentage of your salary (3%, 4%, 6%, 8%, or 10%), your employer matches at least 3%, and the government contributes up to $521/year. Money is locked until age 65 (with exceptions for first home and hardship).

KiwiSaver First Home Withdrawal

After 3+ years of contributing, you can withdraw most of your KiwiSaver balance to buy your first home. You must leave $1,000 in the account.

First Home Grant

A government grant of $3,000-$10,000 per person for first home buyers who've been contributing to KiwiSaver for 3-5+ years and meet income caps ($95K individual / $150K combined).

PIE Tax

Portfolio Investment Entity tax. The tax rate on your KiwiSaver and managed fund returns. Your rate depends on your income: 10.5% (under $14K), 17.5% ($14-48K), or 28% (over $48K). Set it correctly to avoid overpaying.

Conservative Fund

A KiwiSaver or managed fund that invests mostly in bonds and cash. Lower risk, lower returns. Suitable if you're close to retirement or plan to withdraw soon.

Growth Fund

A KiwiSaver or managed fund that invests mostly in shares. Higher risk, higher potential returns. Suitable for younger investors with 10+ years until they need the money.

Safe to Spend

Your available balance minus upcoming bills and savings commitments. It's the amount you can actually spend without going into the red. Steady shows this number on your dashboard.

50/30/20 Rule

A budgeting guideline: 50% of income on needs (rent, food, bills), 30% on wants (dining out, entertainment), 20% on savings and debt repayment.

Zero-Based Budget

A budgeting method where every dollar of income is assigned a job (expenses, savings, or debt). At the end of the month, income minus allocated amounts = zero. YNAB uses this method.

Emergency Fund

Savings set aside for unexpected expenses — car repairs, medical bills, job loss. Most experts recommend 3-6 months of living expenses. Keep it in an on-call savings account for instant access.

Sinking Fund

Money set aside for a planned future expense — holiday, Christmas gifts, car registration. Unlike an emergency fund (for surprises), a sinking fund is for things you know are coming.

Investing

ETF (Exchange-Traded Fund)

A type of investment fund that trades on the stock exchange. Holds a basket of shares, bonds, or other assets. Popular in NZ via platforms like Sharesies, InvestNow, and Hatch.

Managed Fund

An investment fund run by a professional fund manager who decides what to buy/sell. You invest money and the manager does the rest. Higher fees than index funds but potentially higher returns.

Index Fund

A type of fund that tracks a market index (like the NZX 50 or S&P 500) rather than trying to beat it. Lower fees than managed funds. Warren Buffett's recommended approach for most people.

Dividend

A payment made by a company to its shareholders, usually from profits. In NZ, dividends come with imputation credits that reduce your tax. Some investors build portfolios around dividend-paying stocks.

Tax

RWT (Resident Withholding Tax)

Tax automatically deducted from your bank interest and dividends. Your bank withholds it before you see the money. Rate depends on your income (10.5% to 33%). Check your rate is correct with IRD.

PAYE (Pay As You Earn)

Income tax deducted from your salary by your employer each pay period. Most NZ employees don't need to file a tax return because PAYE handles it.

Tax Code

A code that tells your employer how much tax to deduct from your pay. Most people are on 'M' (main income). If you have a second job, use 'S' or 'SH'. Wrong code = surprise tax bill.

Credit

Credit Score

A number (0-1000 in NZ) that represents your creditworthiness. Based on your borrowing history, repayment patterns, and credit applications. Check yours free at Centrix or Equifax NZ.

Buy Now Pay Later (BNPL)

Services like Afterpay, Laybuy, and Zip that let you buy now and pay in instalments. No interest if you pay on time, but late fees add up. Counts as debt and can affect your credit score.

Understanding money is the first step

Steady helps you track, save, and grow — with AI that speaks plain English.

Try Steady free