Simplicity drops membership fee for kids accounts in celebration of second birthday
Everyone's 2nd birthday is a big deal, and ours is all about giving back to kids.
From today, we're removing the $30 annual membership fee for kids in KiwiSaver %)
And from today, children can access our investment funds too. They won't pay membership fees in these either.
We've also dropped our investment funds threshold from $10,000 to $5,000 for everyone, making it easier to save.
Because Simplicity is a nonprofit, the benefits of scale go back to members. As the fastest growing KiwiSaver scheme, it's wonderful to be doing this on our 2nd Birthday %)
How will this work?
Kids under 18 won't pay the $30 annual membership fee in any product, but will still pay the same 0.31% fund management fee everyone else does. For most children, the $30 annual fee is by far the biggest cost.
For example, if a child has $3,000 in a KiwiSaver account with Simplicity, we currently charge a $30 annual membership fee and a fund management fee of 0.31% per annum ie. $9.30. That means total fees of $39.30 a year.
By removing the $30 annual fee, the fees in this balance drop to $9.30 a year. That’s a 76% reduction %)
For someone who has a KiwiSaver account from birth, a $30 per year reduction in fees means at least $540 more in their account by the time they’re 18. If it was invested in our growth fund, it could compound up to over $2,100 more for a first home deposit by the time they’re 30*.
Because KiwiSaver can only be used for a first home, hardship or retirement, our investment funds are a great way to save for kids education costs. The reduced threshold of $5,000 makes it easier for everyone to get a head start.
Thanks for making our first two years simply amazing %)
Sam and the team
* assumes $30 fee waiver for 18 years, compounded at 6.7% p.a. and a PIR tax rate of 17.5%.