Illustration of a golden kangaroo and kiwi boxing on a clean, light background, styled with the metallic engraved look of their one-dollar coins. The kangaroo lands a punch on the kiwi, symbolising the strength of the Australian dollar.

Tomorrow, Tuesday, September 29, barring a surprise, the Reserve Bank of Australia is expected to lift its cash rate another 25 basis points to 4.60 percent.

Across the Tasman, New Zealand's Official Cash Rate sits at just 2.75 percent.

If that happens, the gap between the two countries will reach 1.85 percentage points, and for anyone sitting on a decent pile of New Zealand dollars, it raises an increasingly uncomfortable question: at what point do you start looking elsewhere?

We spend an enormous amount of time talking about interest rates from the perspective of mortgage holders. Fair enough. Mortgages hurt.

But savers exist too.

And right now New Zealand depositors are being asked to accept relatively modest returns while inflation is running at 4.1 percent and considerably higher interest rates are available elsewhere.

The interesting thing is that the Reserve Bank knows it.

In its September Monetary Policy Statement, the RBNZ noted that six-month and one-year term-deposit rates had risen by less than equivalent wholesale interest rates. In plain English, higher wholesale rates have been flowing through more fully to mortgage rates than to term deposits.

The Bank even acknowledged that greater pass-through to deposit rates would be more consistent with its desired monetary-policy stance.

Well, quite.

So why isn't the RBNZ moving faster?

New Zealand's headline inflation rate is above the 1 to 3 percent target band. The Kiwi dollar remains extremely weak against the Australian dollar. Australia is preparing to tighten again. The US Federal Reserve has already reversed course and begun raising rates.

The RBNZ doesn't even have another scheduled OCR decision until October 28.

It could meet earlier. The Monetary Policy Committee has the power to make an unscheduled decision whenever economic or financial conditions warrant it. It has done so before.

The answer, however, is that New Zealand and Australia currently have rather different inflation problems.

The RBNZ argues that much of New Zealand's 4.1 percent inflation rate has come from higher fuel prices generated by the Middle East conflict. Strip out vehicle fuel and annual inflation was 2.9 percent in the June quarter. Most measures of core inflation are already within the target band, while the economy still has considerable spare capacity.

Australia, by contrast, has proved considerably more resilient. Its labour market remains tighter, domestic demand stronger and underlying inflation more stubborn. The RBA therefore has more reason to keep applying the brakes.

That explanation makes economic sense.

It doesn't necessarily make the New Zealand dollar a particularly attractive place to park your savings.

One-year New Zealand term deposits are generally hovering around the 4 percent mark. That isn't nothing, but once tax and inflation enter the equation the real reward becomes considerably less exciting.

So perhaps Kiwi savers need to start asking a question usually reserved for fund managers: why is all my money in New Zealand?

Australian deposits are one possibility for those able to access them. US-dollar cash and bonds are another. Then there are US equities, although anyone shifting from a term deposit into the S&P 500 should understand that they are no longer merely hunting for another percentage point of interest. They are taking equity and currency risk.

Nor does moving money offshore make the taxman disappear. New Zealand tax residents are generally taxed here on overseas income, while foreign shares costing more than NZ$50,000 in total can fall under the Foreign Investment Fund (FIF) rules, although exemptions apply to some investments.

There is another catch.

The New Zealand dollar is already extremely weak against the Australian dollar. Moving money offshore now means exchanging Kiwi dollars after much of that fall has already occurred. If the Kiwi subsequently rebounds, a seemingly attractive overseas yield can disappear remarkably quickly when converted back home.

So no, this isn't an invitation to empty your bank account tomorrow morning and send everything to New York or Sydney.

It is an invitation to look at the numbers.

For years New Zealanders with cash could reasonably put it in the bank, collect their interest and forget about it. Today the OCR is 2.75 percent, Australia may be about to reach 4.60 percent, attractive yields are available offshore and the Kiwi dollar has been badly bruised.

At some point, leaving every dollar at home becomes an investment decision in its own right.

Patriotism may be admirable.

But it isn't an asset class.

This article is general market commentary and does not constitute personal financial advice.