Kiwibank is seeking to raise up to $150 million from the public in order to reduce its reliance on Government funding.
The New Zealand Post subsidiary has previously raised money through two separate bond issues - one in New Zealand and one in Australia - but this is the first time it is offering perpetual preference shares.
These are similar to bonds and can be sold or traded, but have no fixed maturity date. Instead, the rate is fixed every five years.
The offer is being run through a newly created subsidiary Kiwi Capital Securities, but the proceeds will be used for general business purposes by Kiwibank.
Kiwibank gets most of its funding from its parent.
However, Centre of Banking Studies at Massey University director David Tripe says cuts in Government spending may have forced the bank to look elsewhere for cash.
"There's an attempt to rein back Government expenditure, there's cuts in education, there's expected to be cuts in health ... and it would seem a bit strange if, while that was going on, they were throwing more money at banking."