Major New Zealand Banks:

ASB (Owned by CBA Commonwealth Bank of Australia)

Westpac (Australian owned)

Bank of New Zealand (BNZ (Owned by NAB National Bank of Australia)

Kiwibank (NZ Government Owned)

National Bank (Adopted the parent ANZ brand from September 12)

ANZ Australia and New Zealand Bank (part of the ANZ National Group)

HSBC (Wordwide with limited NZ Branches)

TSB Bank (No relation to TSB in the UK)

All much of a muchness and entirely your choice who to go with, depending on the charges and fees, best interest rates and suitable location of branches. Most banks have a presence on the main shopping streets and within shopping malls. All banks offer the full spectrum of savings, online banking, debit and credit cards, insurances, ATMs and EFTPOS cash cards.

Kiwibank because of its Government connections sometimes offers preferential interest rates but is not a bank with the full spectrum of services, its like Girobank and part of NZ Post. The preferential rates don't, for many, compensate for the inconveniences of having to queue up in the Post Shop.

Westpac is the bank of choice for many Government departments and does therefore offer a range of benefits to Public Sector workforce. You will often find that whichever bank you choose, other banks will come to the party to match the best offer or waive fees to get your business, so don't be afraid to ask. If you're getting a big mortgage, taking up insurances etc., they'll likely waive the bank fees on your current account or offer contribution towards legal fees on your mortgage.



Investments in New Zealand may be made through the major banks, building societies, other specialist outfits or finance companies. Common investments (including savings) are:

Savings accounts which typically offer interest calculated monthly on the minimum balance of the account in that month.

Term deposits which involve depositing a fixed amount of money for a fixed term at a fixed interest rate, typically one month to two years, with interest (less income tax) paid at the end of the term.

Interest rates being offered vary between 0.10% for standard savings accounts and up to 3.6% for 12 month fixed term deposit rates offered by some organisations, depending on size of the deposit. Rates are generally fixed by reference to the Official Cash Rate, published by the Reserve Bank of New Zealand.

Unit trusts / PIES in which investors purchase a share of an investment portfolio; returns will depend on the performance of the chosen portfolio.

Banks and various other outfits offer brokerage services for those who wish to invest directly in the stock markets or purchase government bonds.

Financial news and details of bank account types and products, with latest updates on interest rates can be found here: Interest

Retirement savings

The New Zealand government pays a set pension to resident adults over 65 years of age regardless of job status or tax contributions. Rates are published here. It is considered sufficient for a basic standard of living.

In 2007 the Government established a voluntary long-term savings scheme called Kiwisaver. Savers pay a proportion of their earnings into the scheme. Savings are paid either as a lump sum on retirement or to the saver's estate if he/she dies earlier. There are other, more specific, circumstances when funds may be withdrawn.

Pension schemes (ie, contribution-based schemes that pay regular fixed instalments until the investor's death) are not common in New Zealand.

Financial advisors

Financial advisors in New Zealand are generally paid on commission. As a result, their consultations will be free, but the products they offer will be those they are commissioned to sell. While regulation of financial advisors is increasing, it is not as well-developed a sector as in other countries, and those without considerable money to invest may struggle to obtain good-quality advice.

Finance companies - a word of warning

Finance companies typically lend to businesses that are riskier than average propositions. They will typically raise their money by obtaining deposits from investors in the form of term deposits of investment accounts. In recent years, they typically invested heavily in the property market. They are normally relatively small outfits, and since the commencement of the Global Financial Crisis, many have gone out of business.

While some finance companies are soundly managed, they are not as heavily regulated as the banks, as some BE Members have found to their detriment. All I can say is 'buyer beware'. Beware of who you are dealing with and check out their credit ratings, which may be viewed at Interest.

Over twenty New Zealand finance companies have collapsed in the last two years, leaving investors poorer to the tune of $5 billion. Some big high profile market players have gone to the wall, owing people millions of dollars. Bridgecorp, Hanover Finance and Nathans Finance being some of the biggest disasters. A long string of companies have collapsed or frozen investors' funds. In some cases this has led to criminal convictions of the directors. Finance companies have lent the money out and can't give it back, so have frozen their funds. Thousands of people who sunk their life savings, retirement funds and nest eggs into finance firms are still waiting to hear if they will get any of their money back.

While the global credit crunch played a part in fueling the panic, financial experts say that this local situation is mainly home-grown and the collapses started long before the global credit crunch was seen to have any effect in NZ. The finance crisis has rocked some big, well known funds: AXA NZ, AMP and Guardian Trust all suspended funds that invest in mortgages.

Bridgecorp crashed in 2007 failing 18,000 investors.

Hanover recently agreed to a complicated and controversial deal to repay secured investors all their principal in the next five years and continue as a property lending business. Most of those investors won't expect to see much returned until 2012 and 2013.

Consider yourself warned and check out the risk involved! Note also that the rates of return offered by finance companies are often no better than safer institutions.