Term Deposit Calculator NZ — After Tax & PIE Comparison
Enter the rates you have actually been offered. Compare a standard term deposit after RWT with a term or cash PIE after PIR, then see the gross PIE rate needed to break even.
Published by GrowThenDraw Editorial Team · Editorial policy · Methodology & sources
After-tax annualised yield: deposit 3.350%; PIE 3.384%.
$0 outside the opening headroom.
Confirm the exact product on the deposit taker's protected list.
Headroom before this investment: $80,000.
| Credit month | Deposit total cash | Deposit gross | RWT | Deposit net | PIE total cash | PIE gross | PIE tax | PIE net |
|---|---|---|---|---|---|---|---|---|
| 12 | $51,675 | $2,500 | $825 | $1,675 | $51,692 | $2,350 | $658 | $1,692 |
| Stage | Standard deposit | Term PIE |
|---|---|---|
| Opening principal | $50,000 | $50,000 |
| Entered gross annual rate | 5% | 4.70% |
| Entered tax rate | 33% RWT | 28% PIR |
| Cumulative gross interest / return | $2,500 | $2,350 |
| Cumulative tax | $825 | $658 |
| Total cash value | $51,675 | $51,692 |
Term deposit vs PIE: RWT, PIR and DCS
Follow the complete comparison, check the worked example and understand why protected-product status matters.
Test retirement income, not only the rate
Combine accessible savings with KiwiSaver and NZ Super, then stress-test a weekly spending target.
The highest advertised rate may not leave the most after tax
A standard term deposit normally has resident withholding tax deducted from each interest payment. A multi-rate PIE attributes tax using the notified prescribed investor rate. Because an individual PIR is capped at 28%, a PIE can sometimes finish ahead even when its quoted gross rate is lower.
That is not automatic. The calculator compares the two entered gross rates, the selected tax rates and the same crediting assumption. It reports the actual after-tax difference rather than labelling every PIE the winner.
RWT and PIR answer different tax questions
RWT on bank interest is withholding. Inland Revenue squares investment income up at the end of the tax year, so selecting a rate that is too low can leave tax to pay. The common individual RWT choices are 10.5%, 17.5%, 30%, 33% and 39%; 45% applies when no IRD number is supplied.
A PIR is based on the prior two income years and includes separate taxable-income and PIE-income tests. Resident individuals normally use 10.5%, 17.5% or 28%. This tool lets you enter a rate; it does not determine tax residence or choose the correct rate for you.
Crediting and payout choices change the path
When after-tax interest is reinvested, the next credit earns on the larger balance. When interest is paid out, the deposit principal stays unchanged and the model holds the cash outside without adding a reinvestment return. The schedule makes that distinction visible.
Providers can use actual-day conventions, product-specific rounding and different rates for different payment frequencies. GrowThenDraw prorates the entered annual rate by months and does not reproduce a bank's contract calculation to the cent.
DCS protection must be checked product by product
The Depositor Compensation Scheme protects eligible depositors up to $100,000 per deposit taker across protected accounts. Ordinary term deposits can be protected when they appear on the deposit taker's list. Existing protected deposits reduce the opening headroom available for another deposit.
Some bank cash and term PIEs may be covered only where the product invests solely in that bank's debt and appears on its protected-product list. The PIE checkbox is therefore off by default. The result audits opening principal only and does not decide depositor eligibility or final compensation.
Frequently asked questions
Is a PIE always better than a term deposit in New Zealand?
No. A lower PIR can help, but the gross rates, term and interest-crediting treatment still matter. The calculator shows the actual after-tax winner and the PIE rate needed to match the standard deposit.
Which RWT rate should I use?
Use the rate you have notified to the payer and check it against Inland Revenue's current income bands. RWT is withholding and a rate that is too low can produce an end-of-year tax bill.
Which PIR should I use for a term PIE?
New Zealand resident individuals normally use 10.5%, 17.5% or 28%, based on either of the two prior income years and PIE-income tests. Check Inland Revenue's current PIR guide rather than choosing the lowest rate available.
Are term PIEs protected by the DCS?
Not automatically. Some bank cash and term PIEs may be protected when they meet Reserve Bank conditions and appear on the deposit taker's protected-product list. Confirm the exact product before selecting the checkbox.
What does the break-even PIE rate mean?
It is the gross annual PIE rate that would produce the same after-tax total cash value as the entered standard deposit under the same term, credit frequency and payout treatment.
Will this match my provider's maturity quote exactly?
Not necessarily. Providers may use actual days, different quoted rates by payment frequency, cents rounding, fees and early-break rules. Use the result as a transparent comparison and confirm the contract quote before investing.
New Zealand term-deposit, RWT, PIR and DCS rules verified 2026-08-10:
- Inland Revenue: resident withholding tax on term-deposit interest
- Inland Revenue: current individual RWT choices and income bands
- Inland Revenue IR861: prescribed investor rates, March 2026
- Reserve Bank: DCS limit, protected term deposits and conditional PIE coverage
Model convention: the entered annual rate is prorated by credit months. Tax is applied to each gross credit; after-tax amounts are either reinvested or held as non-earning cash. The break-even solver uses the same term, frequency and treatment for both paths. DCS figures audit opening-principal headroom only.
Excluded: selecting the correct RWT or PIR, tax residence, end-of-year RWT square-up, financial-arrangements accrual rules, actual-day conventions, provider rounding, fees, early withdrawal, future reinvestment rates, inflation, credit risk, depositor eligibility, joint/trust arrangements, complete DCS aggregation and final compensation. Educational estimate only, not financial, investment, tax or legal advice.