Photo: RNZ / Alexander Robertson
Some of New Zealand’s least generous savings accounts are paying as little as 0.05 percent in interest.
A survey of bank rates showed the main banks have a number of products that offer very little return.
ASB’s Savings On Call account offers 0.1 percent.
ANZ has a Select account that pays 0.05 percent on balances over $5000 – there is a monthly account fee of $6 but that is waived if the monthly balance remains over $5000.
Westpac’s Simple Saver pays 0.05 percent – customers are sent “nudge” emails if they have higher balances to remind them of other options.
Co-Operative’s Smile On Call account pays 0.1 percent to balances over $4000.
Reserve Bank data shows the average rate across the market for unconditional savings accounts is just over 1 percent.
New Zealanders have almost $120 billion in savings accounts, a total that has increased over the past year.
Squirrel chief executive David Cunningham has previously said that people leaving money in low-paying accounts provide a lucrative income stream for the banks.
Banking expert at Massey University Claire Matthews said she had money in a Westpac Simple Saver account.
“I’ve just realised at the weekend how low the interest rate is. It changed substantially over 2025 as the OCR was cut and interest rates fell. I’m going to fix that shortly.”
Financial Markets Authority research showed across all age groups, people said that the highest interest rate was the most important factor in choosing a savings account.
But for those aged 65 to 74, the stability of the rate and how easy it was to access savings were equally important.
The FMA said the self-reported importance of finding a high interest rate peaked in midlife and declined thereafter as people began to attach more importance to other factors.
Lower-income earners also placed more importance on the ability to access savings than the rate they were getting.
The self-reported importance of a high interest rate increased with income, to a point, while the importance of access declined with income.
But Matthews said there could be a few reasons why people did not look for a better deal.
Infometrics chief executive Brad Olsen.
Photo: LDR
“Speaking personally, it is inertia – as far as I’m aware you can’t now open a Simple Saver with Westpac, so I don’t believe anyone would be actively choosing it. It’s possibly the same with similar accounts at other banks.
“So I think for most people it is likely to be historic, and they either haven’t looked at what interest rate they are receiving and the options available or they just haven’t worked up the energy to make a change.”
Infometrics chief executive Brad Olsen said people might like the security of knowing they could access their money easily.
“People are clearly sometimes willing to compromise returns for access.
“There’s a wider conversation – people often talk about the lazy tax and how there’s all these people who pay the lazy tax because they don’t move their bank account, they don’t move their power bill or don’t move their internet or whatever. In dollar terms I completely understand it, but as someone who’s also tried to adjust some of these settings myself – it can sometimes take so much time.”
He said it could sometimes take a lot of effort to make a change.
Olsen said he kept some money in an account he was aware paid little interest.
“It’s a pretty small amount and so it is one of those things that it’s pretty minimal given I keep that as a bit of as emergency fund if I have to up and do something right now it’s always available.
“But if you’ve got half your savings or something in it and you’re hoarding that to buy a house or whatever and it’s not getting any interest, what’s the point there?”
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