Banking and everyday money
How the bank side actually works, and where the money quietly goes.
Ends with: An understanding of what each account type is for, what it costs you, and where your money is protected.
This pathway explains how the products work. It does not recommend a bank, an account or a term deposit, and rates change constantly, so treat any figure in a calculator as your own number rather than an offer.
Almost everyone in New Zealand has a bank account, and almost nobody has been taught what it is doing.
This pathway covers the ordinary machinery of money: what a payslip is telling you, what the difference between a debit card and a credit card actually is at the point of payment, why an overdraft is one of the most expensive ways to borrow small amounts, and how the savings products differ from one another once you look past the headline rate.
It is deliberately unglamorous. There is no investing here and no property. The steps are the things that quietly cost people money for decades: a bonus saver account whose bonus never triggers, a minimum credit card payment that takes twenty years, a term deposit broken early, an overseas transfer where the fee was not the fee.
Four steps have no calculator, and that is on purpose. Reading a bank statement, understanding what your bank earns from you, knowing what the deposit compensation scheme covers and knowing how to change banks are all worth knowing and none of them is a sum.
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Reading your own statement
Most people have never read one line by line. Everything else in this pathway is visible there once you know what you are looking at.
5 min read -
What your payslip is telling you
Gross, net, PAYE, ACC, KiwiSaver and student loan all come off before the number you recognise. This is where your money starts.
Work out your own: Take Home Pay Calculator 7 min read -
How the bank earns from you
Understanding the margin between what a bank pays savers and charges borrowers explains almost every product decision it will offer you.
6 min read -
Three cards that behave differently
EFTPOS, debit and credit look identical at the terminal and are entirely different products in terms of cost, protection and what happens in a dispute.
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What a credit card actually costs
Interest free periods, cash advances and revolving balances have different rules, and only one of them is free.
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The minimum payment trap
Paying the minimum is designed to be affordable and to take decades. The arithmetic of that is worth seeing once.
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Why an overdraft is expensive borrowing
A small overdraft used constantly costs more per dollar than almost any other credit, and it is the easiest to slip into.
Work out your own: Overdraft Cost Calculator 5 min read -
Automatic payments and direct debits
You control one and the other party controls the other. That difference matters the day something goes wrong.
6 min read -
Savings accounts and the conditions on them
A bonus rate you never trigger is a low rate. The conditions are the product.
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Term deposits and the cost of breaking one
The rate is only half of it. What happens when you need the money early is the part that decides whether the term suits you.
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Term PIEs against term deposits
Same money, same term, different tax treatment. For some tax rates the PIE wins and for others it does not.
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What is protected if a bank fails
New Zealand now has a depositor compensation scheme with a limit and a scope. Knowing both is worth five minutes.
11 min read -
Changing banks without the mess
Switching is easier than it was, and the reason most people do not is that they assume it is not.
5 min read -
Sending money overseas
The advertised fee is rarely the cost. The exchange rate spread usually is, and it is not shown as a charge.
When to stop and get someone else
For a complaint your bank will not resolve, the Banking Ombudsman is free and independent. For anything involving investment products rather than deposits, check that whoever is advising you is on the Financial Service Providers Register before you act on it.
This pathway is information, not financial advice. Rates, thresholds and rules change; every guide carries the date it was last reviewed.
Ticking a step keeps your place in this browser only. There is no account and nothing is sent anywhere, so clearing your browsing data will clear it too.
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