What’s the difference between KiwiSaver and other managed funds?

October 31, 2022

There are lots of factors that make KiwiSaver a good option – but then what about all the other managed funds that are available?

Here's what to think about if you're trying to decide where to put your money.


If you're employed, you'll probably have at least had a brush with KiwiSaver. It's a scheme introduced by the Government to help Kiwis save for retirement, and secondly, to buy their first home. Contributions are largely handled via Inland Revenue, and money is managed by fund managers, rather than the investor. The funds you put your money into via KiwiSaver are a type of managed fund.

There are lots of benefits to the scheme: your contributions go automatically from your pay if you’re an employee, for example.

If you are a KiwiSaver member, your employer is also required to contribute 3% of your gross salary; they can contribute at a higher rate if they choose to. If your employer has a ‘complying fund’ (their own approved superannuation scheme), they may contribute to that instead of your KiwiSaver plan, or they could spread their contribution across the complying scheme and your KiwiSaver plan.

Depending on your circumstances, you may also qualify for the first-home grant and first-home withdrawal.

And then there’s the annual Government contribution. For every dollar you contribute during the KiwiSaver year (1 July – 30 June), the Government will add an extra 50 cents to your account, up to a maximum of $521.23 per year. You start qualifying for your Government contribution from the very first dollar you put in, but to get the maximum amount, you need to contribute at least $1,042.86 by 30 June. To be eligible, you need to be aged 18 to 64 and living in New Zealand.

So far, we’ve talked about the benefits of investing in your KiwiSaver plan. But depending on your needs, there may be at least one downside: your money is locked in until you are 65, unless you qualify to withdraw it to buy a house, a withdrawal for really serious financial hardship is approved or if you move permanently to a country that is not Australia. So, if you’d like the flexibility of withdrawing your money as and when needed, other options are worth considering – like managed funds.

Managed funds

Unlike KiwiSaver, with other managed funds, your money is not usually locked in until you reach retirement age.

You can set up an automatic contribution to go from your bank account to your fund manager on a regular basis, but you'll usually have to have at least a set minimum investment to get started.

The universe of managed funds is large, so you should be able to find one – or a combination of funds – that meets your investment objectives very well. Similarly to KiwiSaver, it’s also worth checking management fees, to know what you may be paying and the impact on your investments.

Which is appropriate for you?

The right answer when it comes to sorting your investments depends on your circumstances and objectives.

If you’re weighing up KiwiSaver versus other managed funds, get in touch. We can help you choose an option that’s appropriate for your needs and goals. You may find that the ideal solution is a pick-and-mix approach of both.

Need a hand?

As investment advisers, we are here to help you navigate questions such as this. We can assist you in identifying your needs and determine what investments might be a good fit for you. Get in touch today.

The information contained in this publication is intended for general guidance and information only. It has not been personally prepared for you. Therefore, you should not act on this information if you have not considered the appropriateness of this information to your personal objectives, financial situation and needs. You should consult with us before making any investment decision. Historical market performance may not be indicative of future market performance.