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What is KiwiSaver?

KiwiSaver is a voluntary initiative designed to encourage New Zealanders to save for their retirement.

KiwiSaver is an investment and not a savings account. This difference might seem small, but it’s actually really significant. Understanding what an investment is and how it works can help ensure you make good decisions for your KiwiSaver investment and avoid knee-jerk reactions.
In short:
  • Saving is the simple act of putting money away for a future purpose, and perhaps earning a small amount of interest on this money every month.
  • Investing, on the other hand, is using that same money in such a way that it has greater potential to make you more money – e.g. you can
    earn an increase on your money (returns), or a regular income, or both.
  • KiwiSaver – being an investment - means that instead of your money just sitting in an account, it is working ‘harder’ for you, to earn you
    potentially more money than a savings account.
But…whenever there is greater potential for better returns on your money, there is usually always an increase in the risk you have to take…
  • Investments go down as well as up – in other words sometimes you may lose money. And while an investment like KiwiSaver offers you the potential to earn greater returns on your money, it can also involve taking on more risk (more chance your account balance may go down at times) than putting your money in a savings account and leaving it there.
  • So you need to be comfortable with the amount of risk associated with the investment you’ve chosen - both financially and emotionally. You need to understand what kind of investor you are (your risk profile) and how much market volatility (ups and downs) you are comfortable with.

As a KiwiSaver member, there are different investment types you can choose to suit your needs.

The type of investment you choose should match your
timeframe for investing and your personal tolerance for risk.
Find out more about your options and how to assess what’s
right for you by watching our video or you can read more about
what KiwiSaver is all about on the KiwiSaver website.