Banking & Savings Rates in New Zealand

“There is no such thing as free banking in New Zealand”

This is slowly (and thankfully) becoming a more of a myth each day in New Zealand as the population grows banks are competing for your business. Personally for us coming from the UK we are very much used to being paid and incentivised to put our money with certain banks. Halifax in the UK for example actually pays you to bank with them, they offer £5 a month and a welcoming £100, reward banking has become the norm in the UK. Here this is not the case and it does take some getting used to, however there are some exceptions.

Bank at the Post Office with Kiwi Bank
Bank at the Post Office with Kiwi Bank

Kiwi Bank – The Free Up Account:

A fee free account! We opened this account after we arrived into NZ as it was a little tricky to do online before we arrived (Check out my bank account blog post for more info on how to do this before you arrive in NZ) into the country. The account has no monthly charges and gives you a free Ethpos card . You do have to pay $10 if you want to upgrade your card to visa debit card (basically allows you to buy things online, the Ethpos only allows you to buy things in shops). Electronic transfer’s are also free as are direct debits and ATM withdrawals (from a Kiwi Bank ATM machine). We have found it is the best account around and plus the bank is owned by the same crowd as the post office (basically owned by the government) so you can pretty much do your banking in most’s towns across NZ whilst be assured your money is in a safe and stable bank.

Savings Accounts:

To keep up to date with all the latest and best savings account in NZ we highly recommend visiting and then revisiting www.interest.co.nz There charts will help you to keep up to date with the best offers available. Saving interest rates have in the last few months seen a state of recline, since June 2015 I have had a email by my preferred savings account (Kiwi Bank) three times informing me that my interest on savings are being reduced. That being said the rates are far better than the rate you can get with a current ISA in the UK (1.30% with a ISA if your lucky!) so you will be getting more interest on your money even though NZ doesn’t offer tax free savings.

The “Notice Savers” are by far the most beneficial accounts in NZ at the moment. These are either accounts that are 32 days notice or 90 days notice (meaning you cannot obtain your money straight away you need to give notice). Kiwi Bank again offer great rates on these accounts – a whooping 3% currently which trumps the UK’s measly 1.30% – Click on the link below for more info!

Another option you may want to consider if you are trying to get the best return on your money is peer to peer investment. In New Zealand there are a handful of companies in this area like Squirrel Money – their P2P offering is 8.06% – 8.85% when you commit to a 2 – 5 year term. The nice thing about peer to peer in my opinion is that you are borrowing from people and not banks.

Either way, as you will now be aware your move to NZ will become a strain on your wallet so we cannot stress enough how important it is to keep a eye on the latest information available to you when it comes to banking in New Zealand.

piggyBank NZ

 

Cheap Petrol and Diesel in New Zealand

After the welcomed fall in petrol prices over the awesome summer we’ve had in New Zealand. Prices have started to creep back up again. If like us, you’d like to save more dollars at the pump, here is a of discounts and ways to save money each time you top-up you car.

What is the price of petrol and Diesel in New Zealand?

Update Monday 05/10/2015: The average price of petrol (91) in Auckland city is 201.9 c, the price of Diesel is 132.9 c.

Every petrol station has some sort of discount scheme in place, knowing which is best could potentially save you hundreds of dollars a year at the pump.

Rising Petrol Prices in New Zealand can be a battle
Rising Petrol Prices in New Zealand can be a battle

Gull petrol and diesel – 10-15% off

Gull is my favourite fuel scheme, it’s easy and the pump prices are always competitive, with the following deals it’s a no-brainer. Here are the savings:

  • Monthly a $5 off per $50 top-up and $3 off $30 top-up.
  • Once a month they discount fuel by 10c per litre for a couple days.
  • If you spend $40 at Countdown, the receipt should have a discount of 4c per litre.

The best thing about Gull’s offering is the three discounts can be stacked, so you’d get 14c of per litre and $5 off the total. The cost per litre of fuel here is $2.14 and filling my tank costs $74.90 without discount. With all three discounts the fuel cost is $65 – a saving of just under ten bucks.

The ‘Discount Day’ info is here – http://gull.nz/fun/discount-days

*Update* Thanks to Alan for emailing and letting me know discount day is only available in the manned forecourts.

AA smart fuel – 5% – 100% off

Having the AA smart fuel card handy in your car gives a discount of 8c per litre each time you top-up. Larger purchases in some of NZ shops accrue sizeable discounts which can be stacked. We bought a bed from Target and got 50c off a litre, new tyres from Andy Harpers gave us 35c per litre making our fuel at the time less than $1 per litre.

AA smart fuel cards can be used at both BP and Caltex.

Countdown / Pak’n’save fuel shopping vouchers – 2% – 40% off

The supermarkets as mentioned earlier give a discount when you spend $40, coming up to holidays they often up this to 40c off per litre when you spend $200 – a pretty good saving if you do big shops.

Countdown fuel vouchers can be used in Z and Gull, Pack’n’save have their own fuel stations – if they don’t, usually you have to use a Mobil near by the store.

Rewards points and air miles credit cards when you fuel up

For a another cent or two off a litre, you could consider using an air miles or rewards credit card to pay for your petrol or diesel. Just remember to pay it off, before the interest outweighs the savings.

How else do you save money at the pump, have I missed a deal? I’d love to hear your story, have your say and get in touch below!

The Pros & Cons of The KiwiSaver Scheme

Let’s get straight down to business…First question, What is it?!

The KiwiSaver is a voluntary work-based savings initiative in New Zealand that helps residents to set up nicely for retirement.

There are several options within the scheme, all of which are designed to be a hassle-free solution to long-term saving:

  • Regular contributions from your employer – most members will accumulate savings through regular contributions coming from their pay. You can choose to contribute 3%, 4% or 8% of your gross wage or salary to your KiwiSaver account. Your employer then has to contribute to this as well, with at least 3% of your gross salary.
  • Annual member tax credit – This is paid by the government and to receive the full member tax credit you must contribute at least $1,042.86 per year. This amount is currently set at $521 per year.

The Latest

The government also used to offer a $1000 “kick starter” for those new joining the system. The latest news here is that on 22nd May 2015 the Budget for 2015 was announced, the NZ government have said due to the great success of the Kiwi Saver Scheme (over 2.5 million people have signed up for it!) they no longer see reason to incentivise the scheme to new comers. Therefore the $1000 kick starter has been scrapped! The government provided this tax free contribution to get you off to a good start!

What you can use if for:

  • Deposit on your first home – You can withdraw money from your KiwiSaver account to purchase your first home if you’ve been a member for three or more years. (You cannot use this for an investment property though.)
  • Grant for your first home – You may be entitled to a grant for your first home or land if you’re planning to build. This is known as the KiwiSaver HomeStart Grant which was rolled out on the 1st April this year. Read more about the necessary criteria for this here.
  • Save towards your retirement…ahem!

Who can apply?

For someone who has a temporary residency you may be thinking that these options won’t apply to you if you’re not necessarily staying in NZ long-term. However, they actually apply to all residents and NZ citizens as long as you meet the varying criteria for each option. If returning to your home country you can claim the money back after a year of being away from NZ. (This includes the kick starter if you signed up in time before they scrapped it!) You must also be under the age of eligibility which is currently 65 years.

How to Join:

You can join the KiwiSaver in the following ways:

  • Automatic enrolment when you begin a new job
  • Opting in through your employer
  • Going through a KiwiSaver provider

If you’re self-employed or unemployed, you can still join by contacting a KiwiSaver provider and arranging a regular contribution amount. Check out the IRD website for a list of KiwiSaver providers.

Or you could just keep your money under your bed?!
Or you could just keep your money under your bed?!

The Pros and Cons:

As you’ve already seen, the benefits of the KiwiSaver are plentiful: government grants combined with employer contributions offer a great way to help people set themselves up for the future and make their money go further. I mean…your employer is emptying there pockets further and helping you save!

Having regular contributions in place makes saving easy, and what’s more, if you move jobs then the KiwiSaver account moves with you. The account is also flexible in that you can take a ‘holiday’ from saving, or make lump sum payments. You can find more information about this here.

You may also be able to withdraw all or some of these savings early under certain circumstances, including if you’re buying your first home, emigrating or suffering financial hardship or serious illness.

So what about the disadvantages of this initiative?

Several concerns over the effects of the initiative have been raised. For instance, while this scheme undoubtedly offers people an effective method of saving, there’s evidence to suggest that this can be used as a substitute for other forms of saving. Interest rates are far lower than the saving accounts that are available in NZ and this fact should not be ignored. People may well see this option as satisfactory enough, and not think to manage their own finances to accommodate for the future.

The initiative is arguably quite rigid in its structure and doesn’t take into account people’s varying situations, and whether this is the best form of saving for their individual needs. It also detracts from more imaginative and advantageous forms of saving: for some the best choice might be repaying a mortgage, investing in a business or farm, or perhaps acquiring financial assets. (Not to mention the fact that some individuals may be better off not saving at all in that stage in their lives.)

You can’t dip in and out of your savings like you can with other accounts. If you’re using KiwiSaver for your retirement then you can’t touch your money until the age you get New Zealand Superannuation (NZ Super) which is 65. If you’re between 60 and 64 years old when joining then you can’t touch your money for 5 years.

All said, it’s advisory that you look into the Kiwisaver options available to you and how you can use these to meet your future goals. You can easily track your balance online and don’t forget you can get all the money back if do decide you leave the country in the future. However it is also important not to dismiss other forms of saving (the interest rates are not great) that could provide you with additional benefits more suited to your individual needs.