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Vol. 02 · New Zealand
TUESDAY 21/07/2026
Iss. 2026 / 30
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Economic News is an independent New Zealand publication covering monetary policy, markets, the public finances and the wider economy.

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KIWIBANK · TERM DEPOSITS

Kiwibank first to lift term deposit rates after RBNZ holds OCR

Kiwibank raised its nine-month term deposit rate by 15 basis points to 3.55 percent and its one-year rate by five basis points to 3.9 percent on 28 May 2026, becoming the first major bank to adjust offerings after the Reserve Bank held the official cash rate steady at 2.25 percent.

Banking Desk28/05/2026 · 10:36 NZT6 min read
BankingBreaking
BD
Banking Desk
Banking Correspondent · 28/05/2026 · 10:36 NZT · 6 min read
Interior of a New Zealand retail bank branch with a modern service counter and koru-motif frosted glass panels

At a glance

Kiwibank moved first on term deposits after the RBNZ's razor-thin 3-3 hold, lifting its 9-month rate 15bps to 3.55% and signalling rising bank funding costs ahead of a likely July OCR hike.

Key stats

OCR
2.25%
held 27 May 2026
Kiwibank 9-month TD
3.55%
+15bps
Kiwibank 1-year TD
3.90%
+5bps
CPI peak forecast
4.3%
Sep Q 2026
2-yr mortgage rate
~5.2%
up from 4.5% trough
B26 9-month avg
3.58%
pre-decision
"However, yesterday's unexpectedly close decision has seen swaps pricing for future meetings lifted by 5-10 basis points... swap rates had come down 15-20 basis points over the last fortnight, so there could be a little bit of scope for further wholesale rate rises before banks need to pass those increases on."Gareth Kiernan, chief forecaster, Infometrics

Sources cited

  • OCR held at 2.25% - Reserve Bank of New Zealand — Reserve Bank of New Zealand
  • Monetary Policy Statement May 2026 — Reserve Bank of New Zealand
  • New interest-bearing term deposit interest rates (B26) — Reserve Bank of New Zealand
  • Retail interest rates on lending and deposits (B3) — Reserve Bank of New Zealand
  • The official cash rate (OCR) — Reserve Bank of New Zealand
  • Will the RBNZ 'hike until it hurts' given 'decidedly hawkish' tone? — interest.co.nz
  • Compare the Best Term Deposit Rates in New Zealand — Moneyhub
  • All eyes on interest rates: Key OCR dates to watch for in 2026 — Squirrel

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All banking →

Kiwibank raised its nine-month term deposit rate by 15 basis points to 3.55 percent and its one-year rate by five basis points to 3.9 percent on 28 May 2026, becoming the first major bank to adjust offerings after the Reserve Bank held the official cash rate steady at 2.25 percent.

Kiwibank acted on 28 May, the day after the Reserve Bank of New Zealand's Monetary Policy Committee voted 3-3 to keep the OCR unchanged, with the Governor casting the deciding vote.

The move lifts Kiwibank's 9-month rate to 3.55 percent and the 1-year rate to 3.9 percent. These changes came amid the committee's signal that OCR increases will likely be needed later in 2026.

RBNZ projections show annual CPI inflation peaking at 4.3 percent in the September 2026 quarter due to Middle East conflict effects before returning to the 2 percent target midpoint by mid-2027.

The narrow vote surprised markets. Infometrics chief forecaster Gareth Kiernan noted that the unexpectedly close decision lifted implied future rate paths by 5–10 basis points in swap pricing.

Term deposit rate comparison

Kiwibank's adjustment positions it competitively against peers. According to Moneyhub comparisons, pre-move advertised 9-month rates included BNZ at 3.50 percent, Westpac at 3.60 percent and ASB at 3.55 percent.

RBNZ B26 series data showed the average new 9-month term deposit rate at 3.58 percent and the 1-year rate at 3.74 percent in the most recent period before the decision.

9-month term deposit rates (pre-Kiwibank adjustment)
Kiwibank moved to 3.55 percent on 28 May. Peer rates reflect advertised levels as of mid-May 2026.
Source: RBNZ B26 series and Moneyhub comparisons

Infometrics chief forecaster Gareth Kiernan noted limited headroom before banks must pass on higher funding costs.

However, yesterday's unexpectedly close decision has seen swaps pricing for future meetings lifted by 5-10 basis points... swap rates had come down 15-20 basis points over the last fortnight, so there could be a little bit of scope for further wholesale rate rises before banks need to pass those increases on.

No other major banks announced immediate term deposit changes in the first 48 hours.

Mortgage rates and the July OCR watch

According to RBNZ data, two-year fixed mortgage rates have already risen from a 2025 low of 4.5 percent to around 5.2 percent.

Infometrics' Kiernan said it would be "very surprising" if the OCR does not increase at the 8 July 2026 review, given how close the RBNZ came to raising the cash rate at its May meeting. Based on standard mortgage modelling, a 25 basis point increase would add roughly $30 to $50 per fortnight to repayments on a typical $500,000 mortgage.

Kiwibank's early move tests market appetite for higher deposit rates and may pressure larger peers to follow, raising sector funding costs that flow through to borrowers.