Best PIE Term Deposit Rates in New Zealand
Compare PIE (Portfolio Investment Entity) term deposit rates from major NZ banks.
Updated daily with tax-efficient investment options for your savings.
Current PIE Rates
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3.35% | - | - | 3.75% | 3.70% | 3.70% | 3.70% | 3.70% | 4.00% | 4.10% | 4.15% |
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3.30% | - | - | 3.80% | 3.70% | 3.85% | 3.70% | 3.85% | 4.00% | 4.15% | 4.20% |
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3.20% | - | 3.65% | 3.90% | 3.75% | 3.85% | 3.75% | 3.85% | 4.00% | 4.10% | 4.20% |
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3.45% | - | - | 3.90% | 3.90% | 3.90% | 3.85% | 4.00% | 4.15% | 4.25% | 4.35% |
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3.35% | 3.40% | 3.65% | 3.90% | 3.75% | - | 3.70% | - | - | - | - |
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3.40% | 3.35% | 3.65% | 3.75% | 3.70% | 3.75% | 3.70% | 3.85% | 4.00% | 4.10% | 4.10% |
Last updated: August 30, 2025 at 09:00 AM
Understanding PIE Term Deposits: Tax-Efficient Investing in New Zealand
PIE (Portfolio Investment Entity) term deposits offer a tax-efficient alternative to traditional term deposits for many New Zealand investors. As of August 2025, we track PIE rates from 6 major financial institutions across 11 different term lengths. Understanding how PIE structures work and their potential tax benefits can help you make informed decisions about maximizing your after-tax returns.
PIE Market Insights (30 August 2025):
- • Current PIE rates range from 3.20% to 4.35%
- • Average minimum deposit: $6,000
- • 6 institutions offering PIE term deposits across 11 term lengths
What Are PIE Term Deposits and How Do They Work?
PIE (Portfolio Investment Entity) term deposits are structured as investments in a managed fund that holds term deposits. While the underlying investment is still a term deposit with guaranteed returns, the PIE structure can provide tax advantages for many investors.
Like traditional term deposits, PIE term deposits offer fixed interest rates for predetermined periods. However, the tax treatment differs, potentially resulting in lower effective tax rates and higher after-tax returns for eligible investors.
PIE Tax Benefits Explained
The main advantage of PIE term deposits lies in their tax treatment:
Prescribed Investor Rate (PIR): PIEs are taxed at your PIR, which may be lower than your marginal tax rate. PIRs are capped at 28%, even if your income tax rate is 33% or 39%.
No Additional Tax: Unlike regular term deposits where interest is added to your taxable income, PIE investments don't create additional tax obligations in your annual return.
Tax Efficiency: For investors on higher tax rates, PIE structures can result in significant tax savings compared to traditional term deposits.
Who Benefits Most from PIE Term Deposits?
PIE term deposits are particularly beneficial for investors who:
- Have marginal tax rates of 30%, 33%, or 39%
- Want to minimize tax on their investment returns
- Prefer the security of term deposits with tax efficiency
- Have significant term deposit holdings
Your PIR is determined by your income in the two preceding tax years. It's important to ensure you're on the correct PIR to maximize tax benefits.
PIE vs Traditional Term Deposits: A Comparison
| Feature | Traditional Term Deposit | PIE Term Deposit |
|---|---|---|
| Tax Rate | Your marginal tax rate | Your PIR (max 28%) |
| Tax Return Impact | Interest added to taxable income | No additional tax obligations |
| Security | Principal guaranteed | Principal guaranteed |
| Interest Rate | Fixed rate | Fixed rate (may differ) |
Important Considerations for PIE Investors
PIR Accuracy: Ensure your PIR is correct when investing. An incorrect PIR can result in over or under-payment of tax.
Investment Minimums: PIE term deposits may have different minimum investment requirements compared to traditional term deposits.
Rates May Differ: PIE term deposit rates might be different from traditional term deposit rates from the same institution.
Early Withdrawal: PIE term deposits typically have similar early withdrawal provisions to traditional term deposits, including potential penalties.
3 months PIE Terms
Rate range: 3.20% - 3.45%
Available from: 6 banks
1 year PIE Terms
Rate range: 3.70% - 3.85%
Available from: 6 banks
2 years PIE Terms
Rate range: 3.70% - 4.00%
Available from: 5 banks
Calculating Your PIE Tax Benefit
The tax benefit of PIE investing depends on your marginal tax rate versus your PIR:
Example Scenario:
$50,000 investment at 4.50% interest for 1 year
- • Traditional term deposit (33% tax rate): $1,507.50 after tax
- • PIE term deposit (28% PIR): $1,620.00 after tax
- • Annual tax saving: $112.50
Getting Started with PIE Term Deposits
To invest in PIE term deposits, you'll need to:
- Confirm your correct PIR with your tax advisor or IRD
- Compare PIE rates with traditional term deposit rates
- Consider the impact on your overall investment strategy
- Understand the terms and conditions specific to PIE investments
PIE Term Deposit Strategy Tips
Rate Comparison: Don't assume PIE rates are always better. Compare the after-tax returns of both PIE and traditional term deposits.
Diversification: Consider PIE term deposits as part of a broader investment portfolio that might include KiwiSaver, shares, and property.
Laddering Strategy: Use the same laddering principles with PIE term deposits to maintain liquidity while maximizing returns.
Tax Planning: PIE investments can be valuable for tax planning, particularly for higher-income earners approaching retirement.
Frequently Asked Questions About PIE Term Deposits
What is my PIR and how do I find it?
Your PIR is based on your taxable income in the two preceding tax years. PIRs are 10.5%, 17.5%, or 28%. You can find your correct PIR using the IRD's PIR calculator or consult a tax professional.
Can I switch from a traditional term deposit to a PIE term deposit?
You cannot directly convert existing term deposits to PIE structures. You would need to wait for maturity or break your current deposit and reinvest in a PIE term deposit.
Are PIE term deposits as secure as regular term deposits?
PIE term deposits typically offer the same principal protection as traditional term deposits when invested with the same institution. However, verify the specific structure and guarantees with your chosen provider.
Do I need to declare PIE investments in my tax return?
Generally, PIE investments don't require declaration in your annual tax return as tax is calculated and paid at the PIE level. However, you should keep records of your investments and consult current IRD guidelines.
What happens if my income changes and my PIR should be different?
You should notify your PIE provider if your circumstances change and your PIR needs updating. Using an incorrect PIR can result in tax implications at year-end.
Can non-residents invest in PIE term deposits?
PIE investments are generally available to New Zealand tax residents. Non-residents may face different tax treatment and should seek specific advice about their eligibility and tax implications.
Ready to Compare PIE Rates?
Use our comparison tool above to find the best current PIE rates for your preferred term length. Last updated 30 August 2025 with rates from 6 institutions.
Important: This information is for educational purposes only and does not constitute financial or tax advice. PIR calculations and tax implications can be complex. Always verify current rates and terms directly with financial institutions and consider seeking professional financial and tax advice for your specific circumstances.