PIE funds work exactly like term deposits, except interest is taxed at a lower rate. These lower rates are called prescribed investor rates (PIRs):
| Annual Income |
Income Tax Rate |
PIR |
| $15,601-$53.500 | 17.5% | 10.5% |
| $53.501-$78,100 | 30% | 17.5% |
| $78.101-$180,000 | 33% | 28% |
| $180,000+ | 39% | 28% |
If you’re not sure about your PIR, it’s easy to check, here at the IRD’s site.
Best PIE Funds
Not all banks offer PIE funds alongside term deposits. But while interest rates on PIE funds match those of regular term deposits, because you pay less tax on them, the effective interest rate you earn is higher.
While banks publish their PIE fund interest rates on their websites, they don’t all display the effective tax rates on offer across their products. So to help you compare PIE funds and the effective interest rates on offer, Canstar has put together the following charts:
Note: interest payment frequencies vary. Check banks’ websites for full details. Rates as of 16/12/2024.
Best Pie fund rates: 6-month term
The chart below compares the banks’ 6-month PIE funds’ rates with their effective interest rates.
| PIE Fund 6-month rate |
Effective rate 30%* | Effective rate 33%** | Effective rate 39%*** | |
 |
5.15% | 5.30% | 5.53% | 6.08% |
 |
5.10% | 5.25% | 5.48% | 6.02% |
 |
5.10% | 5.25% | 5.48% | 6.02% |
 |
5.05% | 5.19% | 5.43% | 5.96% |
 |
5.05% | 5.19% | 5.43% | 5.96% |
 |
5.05% | 5.19% | 5.43% | 5.96% |
Best Pie fund rates: 12-month term
The chart below compares the banks’ 12-month PIE funds’ rates with their effective interest rates.
| PIE Fund 12-month rate |
Effective rate 30%* | Effective rate 33%** | Effective rate 39%*** | |
|
4.85% | 4.99% | 5.21% | 5.72% |
|
4.80% | 4.94% | 5.16% | 5.67% |
|
4.75% | 4.89% | 5.10% | 5.61% |
|
4.75% | 4.89% | 5.10% | 5.61% |
|
4.75% | 4.89% | 5.10% | 5.61% |
|
4.75% | 4.89% | 5.10% | 5.61% |
Best Pie fund rates: 24-month term
The chart below compares the banks’ 24-month PIE funds’ rates with their effective interest rates.
| PIE Fund 24-month rate |
Effective rate 30%* | Effective rate 33%** | Effective rate 39%*** | |
|
4.50% | 4.63% | 4.84% | 5.31% |
|
4.45% | 4.58% | 4.78% | 5.25% |
|
4.40% | 4.53% | 4.73% | 5.19% |
|
4.35% | 4.47% | 4.67% | 5.13% |
|
4.35% | 4.47% | 4.67% | 5.13% |
*Applies to investors with taxable income of $53,501 to $78,100.
**Applies to investors with taxable income of $78,101 to $180,000.
***Applies to investors with taxable income of $180,001+
PIE funds: things to consider
While a high interest rate is important, it isn’t the only factor to consider when looking for a PIE fund. Some other factors you might want to keep in mind include:
Fixed time period
Choose your time wisely, because term deposits can be inflexible. For example, if you need to access your money before the end of the term, your bank may charge you a penalty fee and ask you to give them a period of notice.
Interest rates
They tend to vary a lot, depending on the provider and the term. As movements in both directions are possible, it pays to shop around.
Compound interest
Interest can be compounded at different frequencies, such as monthly, semi-annually and annually. The compounding frequency, the number of compounding periods and the interest rate can determine the amount of interest earned on a term investment.
Deposit size
Check whether there is any minimum amount needed to open a term deposit, and if a higher interest rate is offered for a larger amounts. It may be worthwhile depositing more than you originally considered to achieve a better rate.
Fees and charges
Are there any penalties charged for early withdrawals or any other fees involved?
For a full rundown of all the up-to-date term deposit rates on Canstar’s database, just click on the button below.
About the author of this page
Bruce Pitchers is the Content Manager at Canstar New Zealand. An experienced finance reporter, Bruce has three decades’ experience as a journalist and has worked for major media companies in Australia, the UK and New Zealand, including ACP, Are Media, Bauer Media Group, Fairfax, Pacific Magazines, News Corp and TVNZ.
Bruce started his career as an entertainment journalist before turning his pen to sport and fitness content, working for some of Australia’s leading sports magazines. Bruce then moved his focus to the world of finance and worked as a freelance writer and editor for The Australian Financial Review, the NZ Financial Markets Authority and major banks and investment companies on both sides of the Tasman.
In his role at Canstar, he has been a regular commentator in the NZ media, including on the Driven, Stuff and One Roof websites, the NZ Herald’s Cooking the Books podcast, Radio NZ, and Newstalk ZB.
Away from his desk at Canstar, Bruce spends many hours creating and editing puzzles for magazine and newspaper titles in the USA and Australasia, including Woman’s Day and New Idea. To that end, he is the co-author of the murder-mystery puzzle book 5 Minute Murder.
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