Best PIE Funds in NZ

PIE funds work exactly like term deposits, except interest is taxed at a lower rate. These lower rates are called prescribed investor rates (PIRs):

If you’re not sure about your PIR, it’s easy to check, here at the IRD’s site. 

Best PIE Funds

Not all banks offer PIE funds alongside term deposits. But while interest rates on PIE funds match those of regular term deposits, because you pay less tax on them, the effective interest rate you earn is higher.

While banks publish their PIE fund interest rates on their websites, they don’t all display the effective tax rates on offer across their products. So to help you compare PIE funds and the effective interest rates on offer, Canstar has put together the following charts:

• 6-month term deposits
• 12-month term deposits
• 24-month term deposits

Note: interest payment frequencies vary. Check banks’ websites for full details. Rates as of 02/09/2024.

Best Pie fund rates: 6-month term

The chart below compares the banks’ 6-month PIE funds’ rates with their effective interest rates.

	PIE Fund 6-month rate	Effective rate 30%*	Effective rate 33%**	Effective rate 39%***
	5.90%	6.07%	6.34%	6.96%
	5.80%	5.97%	6.23%	6.85%
	5.80%	5.97%	6.23%	6.85%
	5.75%	5.91%	6.18%	6.79%
	5.65%	5.81%	6.07%	6.67%
	5.65%	5.81%	6.07%	6.67%

Best Pie fund rates: 12-month term

The chart below compares the banks’ 12-month PIE funds’ rates with their effective interest rates.

	PIE Fund 12-month rate	Effective rate 30%*	Effective rate 33%**	Effective rate 39%***
	5.60%	5.76%	6.02%	6.61%
	5.45%	5.61%	5.86%	6.43%
	5.20%	5.35%	5.59%	6.14%
	5.20%	5.35%	5.59%	6.14%
	5.20%	5.35%	5.59%	6.14%
	5.05%	5.19%	5.43%	5.96%

Best Pie fund rates: 24-month term

The chart below compares the banks’ 24-month PIE funds’ rates with their effective interest rates.

	PIE Fund 24-month rate	Effective rate 30%*	Effective rate 33%**	Effective rate 39%***
	5.00%	5.14%	5.37%	5.90%
	4.70%	4.83%	5.05%	5.55%
	4.65%	4.78%	5%	5.49%
	4.60%	4.73%	4.94%	5.43%
	4.50%	4.63%	4.84%	5.31%

*Applies to investors with taxable income of $48,001 to $70,000.
**Applies to investors with taxable income of $70,001 to $180,000.
***Applies to investors with taxable income of $180,000+

PIE funds: things to consider

While a high interest rate is important, it isn’t the only factor to consider when looking for a PIE fund. Some other factors you might want to keep in mind include:

Fixed time period

Choose your time wisely, because term deposits can be inflexible. For example, if you need to access your money before the end of the term, your bank may charge you a penalty fee and ask you to give them a period of notice.

Interest rates

They tend to vary a lot, depending on the provider and the term. As movements in both directions are possible, it pays to shop around.

Compound interest

Interest can be compounded at different frequencies, such as monthly, semi-annually and annually. The compounding frequency, the number of compounding periods and the interest rate can determine the amount of interest earned on a term investment.

Deposit size

Check whether there is any minimum amount needed to open a term deposit, and if a higher interest rate is offered for a larger amounts. It may be worthwhile depositing more than you originally considered to achieve a better rate.

Fees and charges

Are there any penalties charged for early withdrawals or any other fees involved?

For a full rundown of all the up-to-date term deposit rates on Canstar’s database, just click on the button below.

Compare Term Deposits

About the author of this page

This report was written by Canstar’s Editor, Bruce Pitchers. Bruce has three decades’ experience as a journalist and has worked for major media companies in the UK and Australasia, including ACP, Bauer Media Group, Fairfax, Pacific Magazines, News Corp and TVNZ. Prior to Canstar, he worked as a freelancer, including for The Australian Financial Review, the NZ Financial Markets Authority, and for real estate companies on both sides of the Tasman.