If you’re sitting on cash in a savings account earning 2-3%, you’re losing purchasing power to inflation every year. The good news is that New Zealand offers several options to earn significantly higher returns on your money — if you know where to look.
This guide compares the highest-interest options available to Kiwi investors in 2026, from traditional bank deposits to specialist investment funds.
Term deposits remain the default “safe” option for New Zealanders seeking better returns than a savings account. Major banks currently offer rates between 4% and 6% for 6-12 month terms.
Pros: Simple, familiar, backed by NZ banks.
Cons: Taxed at your marginal rate (up to 39%). Locked until maturity. Real returns after tax and inflation can be close to zero for high earners.
Cash-focused PIE funds invest in short term deposits and money market instruments but with the PIE tax advantage (max 28% PIR). After-tax returns are typically 0.5-1.5% higher than equivalent term deposits for investors in the 33-39% tax brackets.
Pros: Tax-efficient. Often more liquid than term deposits.
Cons: Returns are still relatively modest. Not risk-free (though very low risk).
Specialist funds like Blossum Fund lend against New Zealand property, earning interest from borrowers. Blossum targets 8% p.a., distributed monthly, with all lending secured by first ranking mortgages at a maximum 75% loan-to-value ratio.
Pros: Higher returns than bank deposits. Monthly income. PIE tax benefits. Asset-backed security.
Cons: Available to wholesale investors only. Not government-guaranteed.
Platforms connect lenders directly with borrowers, cutting out the bank. Returns vary based on borrower risk grade.
Pros: Potentially higher returns. Choose your risk level.
Cons: Taxed at marginal rate (not PIE). Borrower default risk. Less liquid.
Share-based managed funds and ETFs offer the highest long term returns but with significant volatility. Not suitable if you need predictable income or capital stability.
| Option | Gross Return | Tax Treatment | After-Tax (39% bracket) | Liquidity | Security |
|---|---|---|---|---|---|
| Savings Account | 2% – 3% | Marginal rate | 1.2% – 1.8% | Instant | Bank-backed |
| Term Deposit | 4% – 6% | Marginal rate | 2.4% – 3.7% | Locked | Bank-backed |
| PIE Cash Fund | 4% – 6% | PIR (max 28%) | 2.9% – 4.3% | Medium | Fund assets |
| Blossum PIE Fund | 8% | PIR (max 28%) | 5.76% | Medium | Property-secured |
| P2P Lending | 5% – 9% | Marginal rate | 3.1% – 5.5% | Low-Medium | Unsecured/secured |
| Growth Fund | 6% – 12%+ | PIR (max 28%) | 4.3% – 8.6%+ | Medium | Market risk |
The highest risk-adjusted interest rates in NZ come from property secured PIE funds (7-10% p.a.) and diversified growth funds (6-12%+ long term). For guaranteed returns, term deposits offer 4-6% but are taxed at your marginal rate. Property-secured PIE funds like Blossum offer 8% p.a. with PIE tax benefits.
NZ bank term deposit rates in 2026 typically range from 4% to 6% depending on the bank, term length, and deposit amount. Rates change frequently — check interest.co.nz for current comparisons.
Yes, for property secured lending funds. Blossum Fund targets 8% p.a. through first-mortgage lending at max 75% LVR. This is achievable because the fund earns the spread between its borrowing and lending rates, secured against NZ property.
Blossum’s property secured PIE fund delivers monthly income with tax-efficient returns.
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