England managed 41 runs off the powerplay losing both the openers but the ante was upped with Malan hitting four sixes in the next four overs bringing the 50-run stand with Eoin Morgan (80 not out) off just 36 deliveries.
England are pointless in this tri-series yet still have a chance of reaching the final against Australia.
New Zealand seamer Tim Southee was the pick of the bowlers with outstanding figures of 2-22 from his four overs.
There was an encouraging performances from fit-again captain Eoin Morgan, whose unbeaten 80 guided England to 194 for seven and another nerveless final over from the steely Tom Curran, but the series has exposed clear cracks in the team's short-form side.
Malan later fell for 53, caught by Mark Chapman from a Colin de Grandhomme ball, but the tail wagged with some big hitting to keep England in the hunt. Should England win the return match, then the side with the superior overall run rate will progress to the final against Australia.
For the Kiwis, Guptill and Munro slammed half centuries. Ross Taylor hit two sixes in an 18-run final over from Tye to propel New Zealand to their equal-highest T20 score.
The spinners Rashid and Liam Dawson (1-27) applied brake to the scoring rate and as a result the pressure was too much to withstand for Kane Williamson (8), who went about with a strike-rate of under 62.
Chasing a target of 195 to win the game, the Kiwis only needed 176 to ensure they will face Australia in Wednesday's final at Eden Park.
Fifth T20I Australia beat New Zealand by five wickets.