Tax rate on joint held term deposits with BNZ

Please note this sub-forum does not provide professional finance advice. You should seek advice from a licensed financial advisor.

To post in this sub-forum you must have made 100 posts or have Trust status or have completed our ID Verification.

If investing please consider our affiliate link for new accounts: Sharesies.

Forums › Finance and wealth management › Tax rate on joint held term deposits with BNZ - check yours.

1 | 2 | 3

eracode

Smpl Mnmlst
8848 posts

Uber Geek

ID Verified

Trusted

Subscriber

#2600051 8-Nov-2020 18:34

BillyAnderson:

It's always good to check such things, but with such disgustingly pathetic interest rates at the moment 😢 you'd have to have a very very large amount of money invested to lose more than a few dollars anyway.

An important point in respect of the opening post is that, if you get charged a high rate of RWT by your bank, you’re not losing any money - it’s just a timing issue and a ‘use of money’ issue. It all gets sorted out at the end of the tax year and you’ll either get a correspondingly higher refund from IRD (or pay less terminal tax then you otherwise would have). The point is, who wants the government to have the use of your money during the year - better to have it in your own pocket.

Similarly if you accidentally or deliberately understate your RWT rate, the converse applies - you’ll pay the the missing amount to IRD at the end of the year.

Tax deducted under the PIE/PIR regime doesn’t get sorted at the end of the year. Interest on PIE investments doesn’t get included in your tax return - it’s ‘full and final’ when deducted at source.

Sometimes I just sit and think. Other times I just sit.

BillyAnderson

24 posts

Geek

#2600082 8-Nov-2020 19:35

^ Yes, you can get the excess tax back from a normal term deposit when the tax year finishes, but you will lose the compound interest you would have received if that money had stayed in your account (either with quarterly interest payments, for example, and/or if the investment rolled over for another term).

eracode

Smpl Mnmlst
8848 posts

Uber Geek

ID Verified

Trusted

Subscriber

#2600085 8-Nov-2020 19:45

BillyAnderson:

^ Yes, you can get the excess tax back from a normal term deposit when the tax year finishes, but you will lose the compound interest you would have received if that money had stayed in your account (either with quarterly interest payments, for example, and/or if the investment rolled over for another term).

Yes, of course. That’s exactly why I said better for us to have the use of the money rather than the government. It’s a matter of principle - and principal. 😀

Sometimes I just sit and think. Other times I just sit.

eracode

Smpl Mnmlst
8848 posts

Uber Geek

ID Verified

Trusted

Subscriber

#2600248 9-Nov-2020 06:48

sbiddle:
eracode:

Banks do not have the ability to store or apply different tax rates for different investments by any one customer. If you have a relationship with them, at the outset they require you to give them the RWT rate you wish them to use for you - and that rate is applied to all your accounts and TDs etc that earn interest with that bank. You can’t specify different rates for different accounts or investments. That’s why they don’t, and don’t need to, ask you to input your RWT rate for each new investment.

I have zero idea what your background knowledge of banking is but quite simply an incorrect statement.

@sbiddle Not at all incorrect and seeing you asked and are casting aspersions, my CV shows forty-five years in relationship and senior management in Merchant Banking, Corporate Banking and Private Banking, in NZ and Australia. Two degrees plus post-grad degree in relevant fields. Chartered Accountant and Certified Financial Planner.

Sometimes I just sit and think. Other times I just sit.

1 | 2 | 3