NZ Financial Glossary
Plain-English explanations of financial terms for Kiwi families - KiwiSaver, net worth, property, banking, and investing. No jargon.
KiwiSaver
- KiwiSaver
- NZ's work-based retirement savings scheme. Most employees are automatically enrolled, with contributions from your pay, your employer, and the government. You can access your KiwiSaver balance at age 65, or earlier to buy your first home.
- Contribution rate
- The percentage of your before-tax pay that goes into KiwiSaver. Options are 3%, 4%, 6%, 8%, or 10%. Your employer must contribute at least 3% on top of yours. A higher rate means a bigger balance at retirement.
- Government contribution
- The government tops up your KiwiSaver by 50 cents for every dollar you contribute, up to $521.43 per year (you need to contribute at least $1,042.86 to get the full amount). This is sometimes called the 'member tax credit.'
- KiwiSaver fund type
- Your KiwiSaver money is invested in a fund. Conservative funds hold mostly bonds and cash (lower risk, lower return). Growth funds hold mostly shares (higher risk, higher return over the long term). Balanced funds sit in between. Most people under 50 benefit from a growth fund.
- First home withdrawal
- If you've been a KiwiSaver member for at least 3 years, you can withdraw most of your balance to buy your first home. You must leave a minimum of $1,000 in your account. The government contribution and any HomeStart grant are included.
- KiwiSaver provider
- The company that manages your KiwiSaver fund. Common NZ providers include Fisher Funds, Simplicity, Milford, Kernel, ANZ, ASB, AMP, and SuperLife. You can switch providers anytime - providers charge different fees and offer different fund types.
Net Worth & Wealth
- Net worth
- Your total wealth in one number: everything you own (assets) minus everything you owe (liabilities). A positive net worth means you own more than you owe. Tracking net worth over time is the clearest way to see whether you're actually getting ahead.
- Assets
- Everything you own that has monetary value - bank accounts, your home, investment properties, KiwiSaver, shares, vehicles, crypto, and other valuables. Assets increase your net worth.
- Liabilities
- Everything you owe - mortgage, car loan, credit card debt, student loan, personal loans, BNPL balances. Liabilities reduce your net worth.
- Equity
- The portion of an asset you actually own. For property: equity = home value minus mortgage balance. If your home is worth $800k and you owe $500k, you have $300k in equity. Equity grows as your mortgage reduces and your property value increases.
- Liquid assets
- Assets you can quickly turn into cash - bank account balances, shares, term deposits. As opposed to illiquid assets like property or KiwiSaver (which you can't easily access before retirement).
Property
- LVR (Loan-to-Value Ratio)
- Your mortgage balance as a percentage of your home's value. LVR = mortgage ÷ property value × 100. An LVR of 80% means you owe 80% of the home's value and own 20% (your equity). Lower LVR = less risk for the bank, often better interest rates.
- Capital gain
- The increase in your property's value since you bought it. If you paid $600k and it's now worth $750k, you've made $150k in capital gain. NZ has no general capital gains tax, so most of this is yours to keep (some bright-line exceptions apply).
- Bright-line test
- NZ's version of a short-term property capital gains rule. If you sell a residential property within a certain period of buying it (currently 2 years for new builds, 10 years for others), the profit may be taxable as income. Main homes are generally exempt.
- Principal & interest
- A mortgage repayment type where each payment covers both the interest charged and reduces the amount you borrowed (the principal). Over time, more of each payment goes toward the principal. Most NZ home loans are principal & interest.
- Interest-only mortgage
- A mortgage where your repayments only cover the interest - you don't reduce the principal. Your balance stays the same until the interest-only period ends. Common for investors, but means you're not building equity through repayments.
- Rates
- Local council taxes charged on property in NZ. Rates are based on your property's value and go towards local services like roads, rubbish, water, and parks. Rates are a recurring cost of property ownership, separate from your mortgage.
Banking & Open Banking
- Akahu
- NZ's open banking platform, regulated by the Financial Markets Authority (FMA). Apps like WealthWise use Akahu to securely connect to your bank accounts with your permission. Akahu can only read your data - it cannot initiate payments or move money.
- Open banking
- A system where you can securely share your bank data with approved third-party apps. In NZ, open banking is managed through providers like Akahu. You stay in control - you choose which apps can see your data, and you can revoke access at any time.
- Read-only access
- When an app has read-only access to your bank account, it can see your balances and transactions but cannot make payments or transfer money. WealthWise's bank connection via Akahu is always read-only.
- Term deposit
- A savings account where you lock in a fixed amount for a set period (e.g. 6 months, 1 year) in exchange for a guaranteed interest rate. Generally higher interest than a savings account, but you can't access the money until the term ends without a penalty.
Investing
- Sharesies
- A popular NZ investment platform that lets you buy shares and ETFs in NZ, Australian, and US markets. Known for its low minimum investment (from $1) and easy-to-use app. WealthWise can track your Sharesies portfolio as part of your overall net worth.
- Hatch
- A NZ investment platform focused on US stocks and ETFs. Popular with Kiwis who want direct access to the NYSE and NASDAQ. WealthWise tracks your Hatch portfolio alongside your other assets.
- InvestNow
- A NZ platform for managed funds and ETFs, including popular funds from Vanguard and Smartshares. InvestNow doesn't charge platform fees. WealthWise can track your InvestNow investments.
- ETF (Exchange-Traded Fund)
- A fund that holds a basket of investments (like shares across many companies) and trades on a stock exchange. ETFs are popular with Kiwi investors because they offer instant diversification at low cost. Common NZ examples: Smartshares US 500, Vanguard Total World.
- Managed fund
- An investment fund run by a professional manager who decides what to buy and sell. Managed funds typically charge higher fees than ETFs but may suit investors who want active management. KiwiSaver funds are a form of managed fund.
- Diversification
- Spreading your investments across different asset types, sectors, and countries to reduce risk. If one investment drops, others may hold steady. 'Don't put all your eggs in one basket' - WealthWise shows your full picture so you can see if you're over-concentrated.
Vehicles
- WOF (Warrant of Fitness)
- A mandatory vehicle safety inspection required for most NZ vehicles. WOFs are typically valid for 6 or 12 months depending on the vehicle age. Driving without a current WOF is illegal. WealthWise tracks your WOF expiry as part of vehicle lifecycle management.
- Rego (Vehicle Registration)
- Short for vehicle registration - the licence plates and associated paperwork required to legally drive your vehicle on NZ roads. Rego must be renewed periodically (typically every 3 or 12 months) and includes ACC levies. WealthWise tracks your rego renewal dates.
- Depreciation
- The reduction in your vehicle's value over time. Cars typically lose 15–25% of their value each year in the first few years. WealthWise tracks your vehicle's estimated value so it's included in your net worth accurately - not at the price you paid for it.
See all of this in your own numbers.
WealthWise tracks your KiwiSaver, property equity, net worth and more - automatically.