Despite the name, KiwiSaver is more like an investment than a traditional savings account. When you sign with a KiwiSaver provider, you earn interest on your investment. The amount of interest you can earn depends on who provides your KiwiSaver and what type of fund they run.
You can find a list of authorised KiwiSaver providers on the IRD website. Check out their websites or contact them to discuss your KiwiSaver options. Not all KiwiSaver providers will be banks and lenders — some are specialist investment, fund management or other firm types.
Providers offer different approaches to KiwiSaver fund schemes, from high to low risk. This means they'll either chase high return rates, with the chance they'll drop, or set you on a more balanced savings pace. There are five 'types' to look out for, including;
Check your KiwiSaver provider's website for these keywords – they change your savings rate and the amount of 'risk' you run in your investment.
Your provider is simply the manager of your KiwiSaver asset. Your balance will change depending on the market and fund type, while your provider is only responsible for legal ownership. So while they subtract a small management fee and the interest rate of your fund type fluctuates, your provider does not have the authority to touch your assets in case of bankruptcy.
If you are concerned about maintaining a steady line of KiwiSaver, you could try a low-interest rate and low-risk fund type, such as conservative or growth.