Kiwibank has launched a KiwiSaver scheme which it says will allow "more direct control of funds by investors".

The state owned bank says it also aims to lead the market in terms of transparency and disclosure of fees.

Kiwibank chief executive Sam Knowles said a KiwiSaver scheme was a "logical expansion" of the bank's services.

"We have a customer base of about 700,000 New Zealanders and there has been growing demand for us to have a scheme that helps customers save for their retirement.

"We have designed a KiwiSaver scheme that enables customers to choose whether they let fund managers make some investment decisions for them, or whether they more actively manage their own investments."

Last year Kiwibank severed its links with the Mercer KiwiSaver scheme. The bank had acted as a retail partner for Mercer, making information about the scheme available in brochures and on its website.

Kiwibank was not, howeever involved in investment decisions.

The bank, which falls under the umbrella of NZ Post, has done a good job at customer satisfaction, which it will no doubt be hoping will help it sell its new KiwiSaver scheme.

For the past three years it has been voted New Zealand's Most Trusted Bank in the annual Reader's Digest poll.

The ownership of the bank has been in debate this year too, with Finance Minister Bill English initially suggesting it was a likely candidate for privatisation.

Prime Minister John Key last month changed direction on the issue, and said there would be no sale or part sale of Kiwibank while he was Prime Minister.

Chief executive Sam Knowles - who announced in May he was stepping down from the top job after ten years in the role - said today not all customers would want to be actively involved in the management of their savings.

They would want to make a decision when they join the KiwiSaver scheme on the level of risk they would find acceptable and type of investment that suits them best.

But others would want to design their own portfolio and be much more actively involved in their investments.

Knowles said Kiwibank wanted to remove some of the mystique and complexity around retirement savings.