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Kiwi Bond


Kiwi Bond is a type of financial instrument issued by the New Zealand government, designed for individual investors. These bonds are denominated in New Zealand dollars and offer fixed interest rates for a predefined term, typically varying between six months and four years. Kiwi Bonds provide low-risk investment options for those looking to invest in the New Zealand economy while supporting government funding initiatives.


The phonetic pronunciation of the keyword “Kiwi Bond” is: Kē-wē Bä-nd (IPA: /’ki.wi bɒnd/)

Key Takeaways

  1. Kiwi Bond is a fixed interest, low-risk investment product issued by the New Zealand Government.
  2. These bonds are available to individual investors, charities, and certain non-profit organizations.
  3. Investing in Kiwi Bonds may provide a predictable and stable stream of income for investors, and they help fund the New Zealand Government’s public spending initiatives.


The term Kiwi Bond is important in the world of business and finance because it represents a secure and stable investment option issued by the New Zealand government. These bonds provide an opportunity for individual investors, both domestic and overseas, to contribute to the country’s economic growth while receiving a steady stream of fixed interest payments at predetermined intervals. Kiwi Bonds therefore play a vital role in generating capital for public projects, supporting development and fiscal sustainability, and promoting investor confidence in the nation’s financial market.


Kiwi Bonds serve as an essential instrument in the financial market landscape of New Zealand, fulfilling a crucial purpose in offering domestic investors a stable and secure avenue for investment. These government-issued, fixed-interest bonds are denominated in New Zealand dollars and primarily target individual investors who reside within the country. The main intent of Kiwi Bonds is to foster a reliable financial relationship between the government and private investors, subsequently enhancing mutual trust, promoting economic growth, and providing the government with a valuable source of funding to support national development projects and public services. From an investor’s perspective, Kiwi Bonds are particularly attractive due to their low-risk nature and the assurance of attractive returns, given that these securities are backed by the New Zealand government. With a variety of maturity options to choose from, such as three months, six months, and one or two years, these bonds cater to a diverse range of investor preferences and risk appetites. The interest generated from Kiwi Bonds is usually exempt from non-resident withholding tax and approved issuer levy, making them more lucrative for foreign investors. Consequently, Kiwi Bonds not only help instill confidence in the financial market, but they also encourage the flow of capital into the country, thereby contributing positively towards sustaining the economy.


Kiwi Bonds are New Zealand government bonds that are issued for retail investors. These bonds are denominated in New Zealand Dollars (NZD) and are a low-risk investment option available to both domestic and international investors. Here are three real-world examples: 1. June 2018 Issuance: In June 2018, the New Zealand Debt Management Office (NZDMO) issued a new four-year Kiwi Bond with a maturity date of June 15, 2022. It had a fixed interest rate of 2.75% per annum, paid quarterly, making it an attractive investment option for investors seeking exposure to New Zealand government debt. 2. KiwiSaver funds: The NZDMO issues Kiwi Bonds regularly for retail investors. In fact, some of the KiwiSaver funds, the national retirement saving scheme in New Zealand, invest in Kiwi Bonds as part of their low-risk investment strategy. This allows individual investors to gain exposure to safe, government-backed investment options, while also diversifying their portfolio. 3. Attracting overseas investors: In 2017, as the global interest in New Zealand bonds grew, overseas investors increased their holdings. The New Zealand government anticipated this demand for NZD assets and issued new Kiwi Bonds to attract offshore investors. The bonds offered relatively higher yields compared to other global government bonds and stability due to New Zealand’s strong credit rating. This example showcases the strength and attractiveness of Kiwi Bonds as an investment option for international investors looking to diversify their portfolios and invest in stable, low-risk opportunities.

Frequently Asked Questions(FAQ)

What is a Kiwi Bond?
A Kiwi Bond is a type of government-issued, fixed-interest security in New Zealand, offering investors a low-risk investment option. It is issued by the New Zealand Debt Management Office (NZDMO), and only New Zealand residents and entities can invest in them.
How do Kiwi Bonds differ from other government bonds?
Kiwi Bonds are specifically designed for retail investors and have more straightforward documentation and purchase process compared to wholesale government bonds. They are also exclusively available for New Zealand residents and entities, while other government bonds can be traded internationally.
What is the minimum investment amount for Kiwi Bonds?
The minimum investment amount for Kiwi Bonds is NZD 1,000 with additional increments of NZD 1,000. There is no maximum limit for the investment.
What are the maturity terms for Kiwi Bonds?
Kiwi Bonds are issued with maturity terms of 6 months, 12 months, 18 months, and 24 months. Investors can choose any of these terms and bond interest rates correspond to the chosen terms.
How is the interest on Kiwi Bonds paid?
Interest on Kiwi Bonds is paid quarterly, directly to the investor’s nominated bank account.
Are Kiwi Bonds taxable?
Yes, the interest earned from Kiwi Bonds is subject to income tax in New Zealand. Investors are responsible for declaring this income and paying the appropriate taxes.
How can I buy Kiwi Bonds?
Kiwi Bonds can be purchased through registered banks, the New Zealand Stock Exchange (NZX), and investment brokers. Application forms and supporting documents are available on the website of the New Zealand Debt Management Office (NZDMO).
Can I sell or transfer my Kiwi Bonds before maturity?
No, Kiwi Bonds cannot be sold or transferred to another person or organization before maturity. However, in exceptional circumstances such as financial hardship, the NZDMO may consider redeeming the bonds early.
Are Kiwi Bonds guaranteed by the New Zealand Government?
Yes, Kiwi Bonds are issued and guaranteed by the New Zealand Government, making them a low-risk investment option.
Can non-New Zealand residents invest in Kiwi Bonds?
No, only New Zealand residents or entities can invest in Kiwi Bonds. Non-residents can consider investing in other types of New Zealand Government Bonds available in the market.

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