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Kiwibank brings no-penalty 'notice' accounts to NZ

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Unlike a traditional term deposit account, ‘Noticesaver’ would not penalise customers if funds were withdrawn before the due date.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.
 

More by Georgina Bond

Comments and questions
6

So it is just like a 1mth term PIE at a high rate?

So the normal break costs you would wear on a normal term deposit now simply hit the bottom line... funded by the NZ taxpayer.

At some stage the fact that Kiwibank doesnt have to make money will be deemed to be unfair practice.

Spent some time in a bank treasury department then have you ??.

it is more likely a case of match funding the deposits against short term lending (generally on-call overdrafts and short term loans at 10-12%)

would seriously doubt taxpayers will be fronting anything on this, which is probably quite an innovative term deposit product.

Any other winges and wines ??

... as in their quest for market share, they don't introduce another overseas innovation... the NINJA loan...

My issue is Kiwibank have failed to make an adequate return on the vast sums of taxpayer money plundered into it.... it doesnt pay a dividend.... personally, i prefer to see the money spent on schools, hospitals and roads.

No, I havent worked in a bank treasury...but i can tell you if you have an 18 mth term deposit with the right to cancel in 30 days then Kiwibank will have to carry enough liquidity should those deposits not remain for 18 months.... that isnt an efficient use of capital.

FYI - Banks typically have no problem matching call liabilities.... quite the opposite... the problem they have is getting term into their deposit book. This product exacerbates the problem.

BTW - Its not whinging ... I am just pointing out the plainly obvious to the NBR's financially illiterate readers.

Go Kiwibank
"Champion THATS were we will Park our money's"
Keep our money's in NZ
I like the thought of NOT bleeding to Austrailia
Cheers