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Investing – your options explored

Whether you want to dabble in the stock market, or make a major investment in your future, we break down what's available.

Whether you’re planning for your retirement or just building wealth for a more comfortable future, investing can help you reach your financial goals. But if you’re new to investing, deciding where to put your money can be a daunting task.

In this guide, we’ll run through the most common types of investments for everyday Kiwis, plus look at how to choose the investments that are right for you.


When you buy shares (also known as stocks), you buy units of ownership in a company. There are two reasons why investors buy shares:

  • To make a capital gain — buy shares now and sell them for a higher price in the future
  • To receive an ongoing income — some companies distribute a portion of their profits among shareholders by making dividend payments

You can buy and sell shares online through a share trading platform, but brokerage fees apply. Shares can provide higher returns than defensive investments, but there’s also a higher risk of losses.

See our guide to share trading and compare platforms


This government-run voluntary savings scheme is designed to help Kiwis save for retirement. Most people receive contributions to their KiwiSaver account directly from their pay, but personal contributions are also allowed.

You can choose to contribute an amount ranging from 3% to 10% of your gross salary or wage and your employer will match your contribution up to at least 3%. The government will also contribute up to $521.43 each year.

Compare KiwiSaver funds in our handy guide to find out more.

Savings accounts

A high-interest savings account is one of the most basic forms of investing available. These accounts pay a high rate of interest on your account balance, allowing your money to work for you.

You can also access special, higher interest rates by meeting certain terms and conditions. For example, some banks offer an introductory bonus interest rate when you sign up for an account, while others will offer a higher bonus rate if you deposit a minimum amount into your account each month.

However, savings accounts don’t offer the same potential for high returns as some other types of investments.

Learn more about high-interest savings accounts.

Term deposits

Another type of cash investment, a term deposit is similar to a savings account but with a few key differences. As the name suggests, you deposit funds into one of these accounts for a fixed term of anywhere between one month and five years. You then earn a fixed rate of interest on your balance, so they provide the peace of mind of guaranteed returns.

Term deposits are a low-risk investment, so they don’t have the same potential for high returns as some other options. You should also be aware that your money is locked away for the duration of the term — if you want to withdraw funds before the deposit matures, you’ll need to pay a penalty fee.

Learn more about term deposits and compare rates in our guide


Bonds are similar to term deposits in that they allow you to earn a fixed interest rate on the money you invest for a set term. When you buy a bond, you loan your money to a government or company, which agrees to pay the money plus an agreed rate of interest back to you.

The advantage of bonds is that you know how big your return will be at the end of the term. They’re also seen as a lower-risk option than shares, but they don’t offer the same potential for high returns as some other investments.

Learn more about investing in bonds.


Exchange-traded funds, or ETFs, are investment funds that can be traded on stock exchanges. They’re made up of a collection of securities, such as shares and bonds, and are often designed to track the performance of a specific index (such as the NZX 50) or commodity (such as gold).

ETFs are easy to access and make it quite simple to diversify your portfolio. However, you’ll need to be aware of the fees and risks that apply before you invest.

Find out more about investing in ETFs

Managed funds

When you invest in a managed fund, your money is combined with the money of other investors. A fund manager then invests the money on your behalf across a range of asset classes.

There are managed funds designed to suit all sorts of risk profiles, from defensive through to aggressive. Your money is also in the hands of professional investment managers and can be invested across a diverse range of asset classes. However, some investors don’t like handing control to someone else, while you’ll also need to be wary of high fees.

Check out our guide to managed funds for more details.


Like shares, investing in property provides two ways of making money:

  • By selling a property once its value increases
  • By leasing out the property and earning income from rental payments

Considered a growth investment, property offers the potential for large returns and is generally less volatile than shares. However, there are several risks to take into account, including the high cost of buying a property, mortgage repayments, interest rate rises and rental vacancies.

Peer-to-peer investments

Peer-to-peer investing is a relatively new option designed to cut banks out of the lending process. As an investor, you lend money to someone who wants to borrow funds through a P2P lending platform. They then pay you back at an agreed interest rate.

This may allow you to access a higher interest rate than many other types of investments. However, there are several risks attached to this form of investing, including the borrower defaulting on the loan, so check out our P2P investing guide for more information.

Discover more about peer-to-peer investing in New Zealand.

Gold and precious metals

Gold has long been seen as a safer investment option that avoids the volatility of other markets during periods of economic uncertainty. Some people also like owning a physical asset they can keep in their possession.

However, gold and other metals may not offer the same high returns as other types of investments, while you’ll also need to consider dealer fees and how to find secure storage.

Check out our how to buy gold in NZ guide for more information.

Other options

There are a range of other investment options available, including investing in a business or buying cryptocurrencies. However, these are high-risk options and may not be suitable for everyday investors. Do thorough research and assess the risks involved before deciding whether they’re right for you.

What you should know before you start investing

The basic premise of investing is essentially buying assets now to generate an income or a profit in the future. However, there are a few key points to be aware of before you invest any money. These include:

  • Understand your investment goals and risk/reward appetite. Do you want to invest to generate an ongoing income or create capital gains? Are you building wealth to meet a specific goal, such as buying a home or funding your retirement? How much risk are you comfortable with? Answering these questions will help you develop a clearer picture of the types of investments that may be suitable for you.
  • Your own personal preferences. If you’re the type of person who likes to own a physical asset, you may prefer to invest in property or purchase gold or silver bullion. If you don’t like the idea of leaving your money in the hands of an investment manager, managed funds probably won’t be for you.
  • Research how the investment works. One of the key rules of investing is to never invest in something that you don’t understand. With this in mind, do as much reading as you can about how and where your money will be invested.
  • Find out about the expected returns. What sort of return can you expect from your investment? Will it provide an ongoing income, capital growth, or both?
  • Research the risks involved. While you’re researching the investment, check out what risks are involved. For example, is there a risk of losing some or all of your money? Are you happy to accept the level of risk required?
  • Check what fees apply. Fees and charges can have a big impact on your total profits (or losses). Read the fine print closely to find out about all the extra costs that apply to your investment, including sales commissions and ongoing account fees. Also consider what fees will apply when you decide to sell your investment.
  • Find out about the investment timeframe. Are you looking to make a quick profit, such as within the next 12 months, or are you investing for the long-term? Think about when you will want to receive returns on the money you spend, and then see which types of investments match that timeframe.
  • Check the tax implications. Next, consider how the investment will affect your income and capital gains tax obligations. If you’re unsure, contact your tax advisor or accountant.
  • How to cash out. If you need to exit the investment, will you be able to do so quickly? Will this incur any additional fees?

Finally, if you need help choosing suitable investments, arrange an appointment with a financial adviser. They’ll be able to use their knowledge and experience to provide advice tailored to your financial situation.

What to watch out for when choosing investments

From failing to do your research to getting sucked in by scams, there are a few important traps and pitfalls to be aware of when choosing investments. These include:

  • Not doing proper research. You should never invest your money unless you know what you’re getting yourself into, so thoroughly research the ins and outs of any investment before handing over your money.
  • Failing to understand the risks. Every type of investment, no matter how defensive, comes with some level of risk attached. If you don’t understand the risks involved, you could be headed for a fall.
  • Ponzi schemes. Ponzi schemes are investment scams that have made plenty of headlines in recent years. They promise high returns for minimal risk but actually use funds from new investors to pay returns to earlier investors.
  • Scams and fraud. From dodgy cryptocurrency trading platforms to investment seminars that promise the world, there are plenty of other scams to watch out for. Research any investment providers and trading platforms thoroughly to make sure they’re reputable and properly licensed, and don’t fall for promises of returns that sound too good to be true.
  • Unexpected fees. Check the product disclosure statement and read any investment terms and conditions closely. That way you can be aware of any fees that will apply.
  • Not diversifying. We’ve all heard the warning not to put all of our eggs in one basket, and it’s wise advice. Spreading your money across a variety of investments can protect you if a particular market sector experiences a downturn, ensuring that the overall health of your portfolio remains strong.

Choosing how and where to invest your hard-earned money is one of the most important decisions you’ll ever make, so don’t rush it. Do your research and compare a wide range of options before you part with any cash. And if you need any help, contact an authorised financial adviser.Back to top

Important information: Powered by This information is general in nature and is no substitute for professional advice. It does not take into account your personal situation. This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for most investors. You do not own or have any interest in the underlying asset. Capital is at risk, including the risk of losing more than the amount originally put in, market volatility and liquidity risks. Past performance is no guarantee of future results. Tax on profits may apply. Consider your own circumstances, including whether you can afford to take the high risk of losing your money and possess the relevant experience and knowledge. We recommend that you obtain independent advice from a suitably licensed financial advisor before making any trades.

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