Notice Saver PIE

Focus on saving towards a particular goal, with 32 days’ notice before you can make a withdrawal. As a reward, earn a term deposit sized return with potential tax savings too.

See our limited time offer here.

Benefits

As a Portfolio Investment Entity (‘PIE’), this account can potentially provide tax advantages that aren’t available through regular savings accounts or term deposits.

It's for you if:

  • you seek higher returns than a traditional savings account
  • you want to add money whenever you like
  • you’re saving for a medium or longer-term goal and can wait at least 32 days to access some or all of your money
  • you can plan for payments but you want to keep funds invested to maximise returns
  • you dislike managing multiple term deposits
  • you want the potential to pay less tax on your savings
  • you have $500 to start your account

Highlights of Notice Saver PIE

  • no fixed term – unlike term deposits, your investment never expires

  • high returns are paid regardless of whether you make a regular deposit or not 
  • returns paid monthly, rather than at maturity for a term deposit 
  • periodic withdrawals (with notice) can be made as you save for major expenses 
  • no account maintenance or transaction fees, but service fees may apply if you’re a frequent user of phone banking
How it works
  • 32 Day Notice Saver PIE is a product of the Westpac Notice Saver PIE Fund (Notice Saver PIE)
  • Notice Saver PIE accounts are online, cash investments with a minimum notice period for withdrawals 
  • a $1 investment represents 1 unit. A $500 investment means you hold 500 units 
  • your money in Notice Saver PIE is invested solely in a New Zealand dollar bank account with Westpac NZ
  • you need to have a Westpac NZ transaction account to operate your Notice Saver PIE account(s) and make withdrawals. If you don’t already have a transaction account, this can be opened at the same time as you open your Notice Saver PIE account 
  • the required opening balance and on-going minimum balance is $500

How do I transfer money in?

 You can:
  • transfer funds in using online banking (including Business online banking), phone banking and Impulse Saver
  • set up Salary Splitter which automatically divides your regular income between a maximum of six different Westpac accounts, including your Notice Saver PIE accounts
  • set up a Sweep facility into your Notice Saver PIE accounts. Automatically maintain your transaction account at a balance of your choice so you always have enough to cover bills while earning returns on surplus amounts
  • set up automatic payments, direct credits and bill payments from any New Zealand bank account
  • use a branch deposit box to make cash or cheque deposits

How do I withdraw my money?

 You can:
  • make multiple withdrawals of any amount with different withdrawal dates, as long as you give at least 32 days’ notice and you maintain the minimum account balance of $500
  • if you wish to make a withdrawal that would leave your account with a balance of less than $500, you will need to withdraw all your funds and close your account after giving 32 days’ notice
  • give withdrawal notices by calling 0800 400 600, in branch or, when available, through online banking. Withdrawals are paid into your Westpac transaction account or another Westpac account in your name

Tip

You can cancel your withdrawal notice, reduce the amount you wish to withdraw or change the destination account details prior to the withdrawal date.

Early withdrawals without notice 

You have a seven business day cooling off period starting on the day you open your account. After this period, you can only withdraw all or part of your investment without 32 days’ notice if we agree. In deciding whether to agree we will apply our Early Withdrawal Policy for Notice Saver PIE, which may change from time to time.

Return reduction for early withdrawals 

If an early withdrawal is approved, the return earned to date on your account is reduced.

The return is reduced by the amount that the early withdrawal amount would have earned over the minimum notice period.

The return reduction = withdrawn amount x (Funds on Notice Rate ÷ 365) x minimum notice period.

The return reduction will never exceed the total amount earned since your account was opened.

Example

Your early withdrawal of $10,000 is approved on a 32 Day Notice Saver PIE account. The Funds on Notice Rate (see returns tab for more information) is 3.25% p.a. You have notified a PIR of 28%. The return reduction is calculated as follows.

$10,000 x (3.25% ÷ 365) x 32 days
= $28.49
Less PIE tax refund of $7.98 ($28.49 x 28%)
Net return reduction = $20.51

Term Sheet

For important information about Notice Saver PIE, please download the Westpac Notice Saver PIE Fund Term Sheet (PDF). We recommend you read this before making an investment.

Tax benefits

Your Notice Saver PIE account could be a smart way for you to save. With potentially less tax to pay each month, your savings could grow a little faster in a PIE than in a regular savings account.

How could I pay less tax through a PIE?

PIE savings accounts and regular savings accounts are taxed at different rates.

In a regular savings account, interest on your savings is taxed at your Income Tax Rate (up to 33%) which is based on your taxable income in the current income year (income years generally run from 1 April in any year to 31 March the following year).

When you save through a PIE, returns on your savings are taxed at your Prescribed Investor Rate (or PIR) which is capped at 28%. Your PIR is based on your taxable income over the last two income years and can allow additional PIE income to be earned without an increase in your tax rate on your PIE savings.

If your PIR is lower than your Income Tax Rate, you’ll pay less tax on your savings in a PIE than in a regular savings account or term deposit. To find out if your PIR is lower than your Income Tax Rate, use the ‘Best Returns’ calculator, and click ‘Find My Rate’. Alternatively, to work out your PIR see the IRD website at ird.govt.nz (search for ‘correct PIR’).

If your PIR equals your Income Tax Rate, you can still benefit from the wider features of Notice Saver PIE.

You may pay less tax in a PIE if:
  • You currently earn over $48,000 of taxable income - find out more
  • You’re a trustee or beneficiary of a trust - find out more
  • Your taxable income has recently increased and your Income Tax Rate was 10.5% or 17.5% - find out more
  • You currently earn below, but close to $14,000 or $48,000 and your savings income will push you into the next income tax bracket - find out more

There are some circumstances when a PIE may not be right for you - find out more.

Investing jointly?

Joint investors are treated as a single investor. The highest PIR of all joint investors applies to the investment so a final tax can be calculated.

To ensure a joint investor isn’t over-taxed, you should check that:

  • Each joint investor has a PIR lower than their Income Tax Rate; and
  • All joint investors have the same PIR.

If a joint investor has a lower PIR than other joint investors, excess tax deducted at the higher PIR cannot be claimed back as PIE tax is a final tax in this situation.

If the PIRs of joint investors are different, joint investors should consider splitting their investment and investing separately in Notice Saver PIE.

A simpler tax return:

Investing in Notice Saver PIE can minimise tax administration for you and Inland Revenue.

If you’re an individual and you tell us your IRD number and correct PIR (or a rate higher than your correct PIR), Notice Saver PIE pays a final tax on your returns. This means there is no further tax to pay on your Notice Saver PIE returns and you don’t have to bother including your Notice Saver PIE returns in your tax return (if you have to do one).

If a trust notifies a PIR of 28%, PIE returns are treated as excluded income and these also do not need to be included in the trust’s or its beneficiaries’ tax returns.

Individual investors currently earning over $48,000 of taxable income:

Note - includes those holding an account jointly (but see note on investing jointly above).

If you are an individual currently earning over $48,000 of taxable income, your PIR will be capped at 28% and will be lower than your Income Tax Rate – allowing you to save on tax.

Taxable Income*Income Tax Rate
(on deposits in
a regular
savings account)
PIE Tax Rate (PIR)Tax Benefit on your PIE returns
Over $48,000 and up to $70,000 30% 28% 2%
Over $70,000 33% 28% 5%

 

Trustee or beneficiary of a Family Trust:

A trust (excluding a unit trust or charitable trust) that invests in Notice Saver PIE can potentially enjoy the same tax benefits as someone earning over $48,000 of taxable income if it notifies a PIR of 28%.

A trust can either hold income from Notice Saver PIE in the trust or pass the income to its beneficiaries.

If income from a regular savings account is held and taxed within the trust as trustee income, it will be taxed at the trustee Income Tax Rate of 33% (except for certain superannuation funds for which an Income Tax Rate of 28% applies).

Taxable Income*Income Tax Rate
(on deposits in
a regular
savings account)
PIE Tax Rate (PIR)Tax Benefit on your PIE returns
Trustee All income levels 33% 28% 5%
Beneficiary
(individual)
Over $48,000 and up to $70,000 30% 28% 2%
Over $70,000 33% 28% 5%

Notes:

1. If a trustee elects a 28% PIR, PIE tax will be a final tax. This will result in a tax benefit of:

  • 5% if PIE income is retained in the trust and taxed as trustee income (where the trustee Income Tax Rate is 33%); or
  • 2% or 5% if the PIE income is instead passed out to beneficiaries on a 30% or 33% Income Tax Rate and taxed as beneficiary income.

2. If a 28% PIR is selected, the Notice Saver PIE income does not need to be included in the trust’s or its beneficiaries’ tax returns. The PIE income is treated as excluded income.

3. See also below ‘When is a PIE not right for you?’

* Examples of taxable income include salary, wages, commission, NZ Super, rent, interest and dividends, student allowances, parental leave, tips and gratuities. When calculating your taxable income to determine your PIR, you must also include non-New Zealand sourced income for the relevant income year, even if you were not a New Zealand tax resident when it was earned. New residents will be able to elect out of this treatment in some cases, see www.ird.govt.nz. For individuals, taxable income does not include PIE income that has been subject to a final tax from PIE compliant KiwiSaver schemes and managed funds including Notice Saver PIE.

You are an individual whose taxable income has recently increased and your Income Tax Rate was previously 10.5% (under $14,000) or 17.5% ($14,001 to $48,000):

Your PIR is based on your lower taxable income in either of your previous two income years.

If you earn more taxable income in the current income year than either of the two previous income years and this puts you in a higher income tax bracket, tax on your PIE returns can temporarily remain on a lower rate, for up to two income years.

This situation may occur as a result of a salary increase (e.g. entry or return to full time work) or an increase in rental income.

Example

A student who earned $12,000 in each of the previous two income years from part-time work (and with no other sources of income) now graduates and starts earning a full-time salary of $50,000.

The graduate’s PIR would be 10.5% as this is based on the taxable income of $12,000 earned in each of the previous two income years.

The graduate’s Income Tax Rate and tax on a regular savings account would now be 30% based on the current income year’s $50,000 salary (assuming total taxable income does not exceed $70,000).

If the graduate saved through Notice Saver PIE instead, a tax benefit of 19.5% on PIE returns for two years could be enjoyed, assuming earnings stayed within the $48,001 to $70,000 income tax bracket.

You currently earn below, but close to $14,000 or $48,000 and your savings income will push you into the next income tax bracket:

You can earn some additional income through a PIE without an increase in your tax rate on your PIE savings.

This is most likely to occur if you currently earn near the upper limit of your income tax bracket – that is, below but close to $14,000 with a 10.5% Income Tax Rate or $48,000 with a 17.5% Income Tax Rate.

If you start or continue to save in a regular savings account, it's likely your taxable income will tip over $14,000 or $48,000. This will increase your Income Tax Rate to 17.5% or 30% (for the portion of your taxable income above $14,000 or $48,000) respectively.

However, if you save through a Notice Saver PIE account instead, you can save more without an increase in tax on your savings. Your PIR would still stay at 10.5% or 17.5% respectively if your:

  • Taxable income stays below $14,000 and your total income (taxable income plus PIE income) is not more than $48,000. In this case, a 7% tax benefit (17.5% - 10.5%) would apply to your income over $14,000; or
  • Taxable income stays below $48,000 and your total income (taxable income plus PIE income) is not more than $70,000. In this case, a 12.5% tax benefit (30% - 17.5%) would apply to your income over $48,000.
Example

A retiree earns $47,500 of taxable income each income year from NZ Super, rental income and company dividends. Additional cash from a property sale and some of the company dividends are placed in Notice Saver PIE.

The retiree can earn income from their Notice Saver PIE accounts until their total income (taxable income plus PIE income) reaches $70,000 and still enjoy a PIR of 17.5%. Compared to investing in a regular savings account or term deposit (see below), this means up to an additional $22,000 of PIE income (i.e. the portion of total income above $48,000) can be earned and still taxed on a lower 17.5% PIR.

If the equivalent additional income was earned through a regular savings account or term deposit instead, it would be counted as taxable income and the portion of taxable income over $48,000 would be taxed at 30%. By investing in Notice Saver PIE, the retiree in this example enjoys a 12.5% tax benefit on their income over $48,000.

Companies

New Zealand tax resident companies

Generally, there is no tax advantage or disadvantage for New Zealand tax resident companies investing in a PIE as their PIE income is taxed at 28%. However, there could be other benefits (such as time value of money) and other disadvantages (such as impact on provisional tax) that should be considered.

A New Zealand tax resident company has to elect a 0% PIR and include PIE income in its income tax return which will be taxed at the company Income Tax Rate of 28%. As a 0% PIR applies, the PIE income does not have tax deducted at source.

If a company has residual income tax (tax not deducted at source) of more than $2,500 for an income year, the company will generally have provisional tax obligations for that income year and the following income year.

Time value of money benefit

Companies that currently pay provisional tax can benefit from the time value of money by saving through a PIE. Provisional tax instalments occur less frequently than the regular, monthly 28% company Resident Withholding Tax (RWT) deducted from a regular savings account.

Obligation to start paying provisional tax

Companies that don’t currently pay provisional tax (because their residual income tax is $2,500 or less) may be required to start paying provisional tax if additional PIE income causes their residual income tax to exceed $2,500.

Non-tax resident companies

Companies that are not New Zealand tax residents have a PIR of 28% - please see comments under ‘Investors who are not New Zealand tax residents’ below.

When is a PIE not right for you?

The advantages of Notice Saver PIE don’t apply to everybody and in some circumstances there can be disadvantages.

If you have a PIR that is higher than your Income Tax Rate, you will pay more tax if you save through Notice Saver PIE than if you save directly in a regular savings account or term deposit. Before deciding where to save, please compare your current and projected Income Tax Rate and your current and projected PIR.

These situations include:

Investors on significantly different incomes who want to invest jointly 

See ‘Investing jointly?’ above.

Individuals with a decrease in earnings in the current income year

PIE tax is based on your taxable income over the last two income years. Tax on a regular savings account is based on your taxable income in the current income year. If your taxable income decreased in the current income year (e.g. as a result of stopping work), PIE tax could be temporarily higher than tax on a regular savings account or term deposit.

Example:
After earning $80,000 for a number of years, you take time out for maternity leave during which time your taxable income drops to $10,000. In this situation, your PIR would be 28% as your taxable income in each of the previous two income years was $80,000. Tax on a regular savings account would be calculated at a 10.5% Income Tax Rate as this is based on your taxable income in the current income year. This tax disadvantage would last until the next income year assuming no other changes to your financial circumstances.

Investors who are not New Zealand tax residents

The PIR of non-tax residents is 28%. This rate could be higher than the approved issuer levy (AIL) or non-resident withholding tax (NRWT) rate applicable to interest on a regular savings account (generally 2%, 10% or 15%). In this situation, less tax would be paid in New Zealand if a regular savings account was used, rather than a Notice Saver PIE account.

Note:
If a non-tax resident is engaged in business through a fixed establishment in New Zealand (i.e. a NZ branch), a 28% PIR still applies. However, the 28% PIR would equal the 28% company Income Tax Rate on interest from a regular savings account, if operated by the NZ branch. In this case, there is no tax disadvantage through investing in a PIE.

Certain trustees of a trust who elect a 28% PIR  

PIE income will not be able to be offset against any tax loss that may be available to the trust or the trust may have beneficiaries on an Income Tax Rate lower than 28%.

Individuals with tax losses

If you are an individual in an overall tax loss position (e.g. due to tax losses from rental properties), you will not be able to claim back any PIE tax on your Notice Saver PIE returns as the PIE tax is a final tax.  If you had saved through a regular savings account instead, no tax would be payable on your interest income to the extent it is able to be offset by your tax losses.

Please note:

To ensure you can enjoy the potential tax benefits of PIEs, please provide your correct PIR and IRD number when you open your account. Please review your PIR each year and if your PIR changes due to a change in circumstances, let us know straight away.

The information provided above is general in nature and should not be construed as tax advice. Taxation legislation, its interpretation and the rates, levels and bases of taxation may change. The application of taxation laws depends on your individual circumstances.

Westpac, BT Funds Management (NZ) Limited and Trustees Executors Limited do not accept any responsibility for the tax consequences of your investment in Notice Saver PIE. You should seek independent professional advice as to your particular tax position.

Rates of return and fees

32 Day Notice Saver PIE

Rates of return

The variable returns are calculated on the daily balance of your account and paid (less any PIE tax) on the last business day of each month. You can choose to have your monthly returns either compounded back into your account or paid out to your nominated Westpac account.

If your account balance is below the minimum investment of $500, you will not receive any returns. We will notify you in writing if your account balance is below $500 for 30 days or more.

Any portion of your balance over $10million will not receive any returns.

Funds on Notice

When you submit a withdrawal notice, the withdrawal amount will receive a lower return until its withdrawal date. This ‘Funds on Notice Rate’ will be similar to a current 30 day Term Deposit.

Notice Saver PIE - Rates of Return
TierRate of Return ^Effective Return *
Balances $500 to $10,000,000   If your Income Tax Rate is 30% ** If your Income Tax Rate is 33% ***
2.80% p.a. 2.88% p.a. 3.01% p.a.
0.50% p.a. Funds on Notice 0.51% p.a. 0.54% p.a.

*The Effective Return is the rate you would need to receive from a regular savings account in order to achieve the same after tax return from your Notice Saver PIE account, based on a PIR of 28% and an Income Tax Rate of either 30% or 33%.
** Individuals with taxable income of $48,001 to $70,000.
*** Individuals with taxable income of $70,001 and over.

Fees

Notice Saver PIE - Fees
Note: Service fees are charged to your Westpac transaction account.
Fee typeFee amount
Account maintenance and transaction fees
Free 
Txt banking service fee
Txt alerts, txt banking balances and transfer confirmations
Free 
Phone banking service fee
Third party telephone fees may apply
First five calls each month are free (then 50c per call) 
 

Opening a Notice Saver PIE account

Opening a Westpac 32 Day Notice Saver PIE account

New customers

Drop into any Westpac branch to sign up and make sure you bring in some identification. You will need a minimum balance of $500 and a Westpac transaction account to open an account.

Click here for a list of acceptable identification documentation and proof of your address.

To save time and enable us to talk through your options, it's a good idea to contact your local branch first to make an appointment.

Current Westpac customers

It you’re an existing Westpac customer, you can also open an account by calling 0800 400 600 or talk to your Relationship Manager.

Find your nearest branch use our branch locator.