Opening a Bank Account in New Zealand
Opening a bank account in New Zealand is easy – you can even do it online or by phone, however, you may still be required to attend the branch in person to finalize the process.
You generally need two forms of ID to open your account, one must be photo ID and another must be proof of address (like an electricity bill) that’s no more than 90 days old. The process is simple, just provide your details, choose an account, choose your extras, like credit cards, debit cards, how and where you like to bank, and other such additional options. Then transfer in any money that you have and you’re set to go.
There is an enormous range of accounts available – savings, checking, checking with interest, low and no fee accounts, accounts that pay your bills automatically, accounts that reward you for banking outside the branch – literally too many to list. The best way to decide which type of account is right for you is to visit the different bank websites and browse through their ranges of accounts. And if you’d prefer to talk to someone in person, the people at banks are friendly and more than willing to help.
One account that may be especially attractive to expats is a foreign currency account which some NZ banks offer. These accounts allow you to transfer money into an account in NZ but leave it in the original currency and wait until the exchange rate is in your favour before converting it to NZ dollars.
The Cost of Banking
An area of difference between NZ and more populous countries, such as the UK, USA and Australia, is that due to the lack of competition, mortgage companies, credit cards and banks can get away with charging a lot more.
Credit Cards: You will no longer have access to the 0% and very low interest rate credit cards. Credit cards in New Zealand have very high rates of interest.
Bank Fees: NZ banks charge for everything and anything, they will even charge you when you do something yourself, for example, setting up an automatic payment via Internet banking can cost $5 per item you set up; you will also be charged if you want a cheque book printed, if you want to pay in or withdraw funds at the counter and every time you make an electronic transaction. You can find deals whereby banks will charge a set fee per month and you get a set number of electronic transacctions included in the charge, so it’s worth shopping around as all the fees can add up to quite a substantial amount each month.
Mortgages: As an example, obtaining a mortgage in the UK is a simple process that can be performed entirely online; you have the ability to shop around to get great deals, such as free legal fees, very low interest rates, 125% mortgages and free gifts; the mortgage companies are fighting against each other to try and win your business and offer all sorts of incentives to do this. This is not the case in New Zealand. The situation here in New Zealand is reversed and entirely biased in favour of the lenders. Due to lack of competition, mortgage companies here offer very little and expect the earth. It is possible to negotiate to get a reduction in set up fees, or even a half percent reduction on the fixed term rate, but only if you are in a position where you are a very good candidate with a 20% deposit.