Reserve Bank shreds notes, BNZ Bank makes it a lesson on how not to waste money

The Bank of New Zealand is putting $6-million worth of crappy money to good use by filling building a glass house stuffed with shredded money in its marketing campaign aimed at telling Kiwis not to waste money by taking on huge debts.

The glass house, on display at Aotea Square until Oct 1, is also aimed at promoting the bank’s ‘Tailored home loan’ package. 

Wait, you say, don’t these guys loan home owners money? Yes, they are marketing a product that helps save home loan interest repayment.

Wait, is that real money? Yes, the money in the glass house are those removed from circulation and shredded by the Reserve Bank of New Zealand due to wear and tear.

Here’s megaphone message: The $6-million house of shredded notes is the amount borrowers “waste” on interest on home loans, every four hours, based on $191.6 billion worth of the nation’s mortgage debt, at an assumed interest rate of 6.5% per annum.

BNZ’s chief marketing officer, Craig Herbison says this is unnecessary interest payments. 

One way BNZ can help New Zealanders to be good with money is by educating them on ways they can “shred” their home loan repayments, he says.

If homeowners increased their repayments they could save up to $156,000 of accrued interest off a $300,000 loan, repaid over 30 years at an annual rate of 6.74%.

Hernison says BNZ is the only bank that lets customers make small automatic increases in repayments each year through our Tailored Home loans.

BNZ’s “Be Good with Money” slogan that was launched two years ago is associated with the marketing campaign.

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