Kiwibank is eying a sizeable chunk of the term deposit market with its new ‘notice’ account, combining high returns and flexible access to funds.
Unlike a traditional term deposit account, ‘Noticesaver’ would not penalise customers if funds were withdrawn before the due date.
Kiwibank chief executive Paul Brock said customers could withdraw some or all of the funds by giving the bank 32 days notice.
Noticesaver launches today and offers a 5% per annum interest rate with no account management or transaction fees.
Money invested is not fixed for a set term and returns are calculated daily and compounded monthly.
Mr Brock said similar ‘notice’ accounts are available in the US, England and South Africa and were popular for customers seeking hither returns and access to funds without losing interest and flexibility.
These types of savings options had been long overdue in New Zealand and could take a "substantial share" of the traditional term deposit market because of their flexibility, he said.
Noticesaver requires a minimum deposit is $2000.
The account is also compliant with the PIE regulations, providing tax advantages to customers on higher tax rates.
Mr Brock said Noticesaver was expected to be popular with customers who had money to invest but were not certain when they would require some or all for the money.