You’ll have heard this plenty of times: low interest rates are great for borrowers. But what’s less talked about is the situation for those who have money in the bank.

In this low-interest-rate environment, it has become increasingly difficult to get any sort of reasonable income or return from money that you have in savings accounts, or even term deposits. Unsurprisingly, a recent survey by the Financial Markets Authority showed that 43 per cent of people with money in term deposits were expecting to invest less in them in future because of the low rates on offer.

So, if you’d like to put your money to work, what are the alternatives? Here are a few things worth considering.


With interest rates so low, rents increasing and the prospect of a capital gains tax off the table for now, more and more investors are dipping their toes back into the property market. If you’re willing to ride out a bit of price volatility or market weakness in the short-term, it can be a great way to build your net worth, generate cash flow, build your retirement fund, and diversify your investment portfolio. Make sure you get expert help and information to get the strategy and timing right.


Low interest rates give share markets a boost. If you’re not keen on taking too much risk, you could invest your money in more defensive stocks or look for those that have a high dividend yield to provide an income. There are concerns that share markets internationally are highly valued compared to historical values so it’s worth keeping in mind that you may need a strong stomach to cope with any price drops.


The rules have changed so that eligible investors over 65 can now join KiwiSaver and move between providers. So even if you’re past retirement age, you might consider putting your money into a KiwiSaver fund that fits your risk profile, as an easy and relatively cost-effective way to get a better return.

As long as you’re over 65, there’s no restriction on when you can access your money. If you’re younger than 65, this can still be a good option if you’re firmly in savings mode and don’t need the money yet.

Managed funds

If you want the KiwiSaver sort of experience without the access rules and restrictions, you could put your money into another managed fund. Depending on your needs, you might look for one with an income focus, or a capital preservation mandate. And once again, talking to an investment adviser can help you find the right options for your situation and stage of life.

Peer-to-peer lending

Another option is to lend your money to a borrower through a peer-to-peer platform.

If you’re unfamiliar with peer-to-peer lending, it’s a way for people to loan other people money without a bank; it’s a sort of crowd-funding where individual investors fund loans for borrowers and get investment returns.

This option can offer competitive interest rates, greater accessibility and faster application processes than traditional banks. But there are risks involved, too. If you’d like to learn more about P2P lending, visit the FMA’s website here or get in touch.

Watch out

In most cases, moving your money out of the bank and into other investments means taking on more risk. Make sure you understand what is involved with any investment you consider, and what the expected return and risk involved could be.

Need advice? We’d be happy to talk through the options with you to determine what investment strategy is right for your situation.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.