Term Deposit Calculator

How this term deposit calculator works

A term deposit locks a set amount of money away for a fixed period at a fixed rate. In return you get a known interest payment and no exposure to rate cuts during the term. This calculator takes your deposit amount, the advertised rate and the term, then works out the interest you’ll earn and the value at maturity. Change how interest is paid, or switch on reinvesting, to see how the total shifts.

When interest is paid out to a linked account it does not compound, so the maths is simple interest: deposit × rate × time. A deposit of $10,000 at 5% p.a. for one year earns $500, and you get $10,500 back. When you reinvest, each interest payment is added to the balance and earns interest itself, which lifts the total. The more often interest is paid, the more compounding works in your favour.

How interest is paid on a term deposit

Short deposits, up to a year, usually pay interest once, at maturity. Longer deposits typically let you choose monthly, quarterly, half-yearly, annually or at maturity. Paying more often suits you if you want a regular income from the money, or if you plan to reinvest and compound. Paying at maturity is simplest and, for a term of a year or less, earns the same total as being paid monthly, since without reinvesting there is nothing to compound.

Tax on term deposit interest

Interest from a term deposit is assessable income. You declare it in the financial year it is paid or credited, and it is taxed at your marginal rate on top of your other income. If your deposit spans two financial years and pays at maturity, the whole amount usually falls in the year it is credited. Give your bank your Tax File Number, or they may withhold tax at the top rate. The figures here are before tax, so your real return will be lower. For your own situation, check the ATO or a registered tax agent.

How to use this calculator

1. Enter your deposit amount and the advertised rate (per year, p.a.).
2. Set the term and choose whether it's in months or years.
3. Pick how interest is paid: at maturity, annually, quarterly or monthly.
4. Turn on 'Reinvest interest' to compound each payment, or leave it off to have interest paid out.
5. Read your total interest, maturity value and effective rate.

Frequently asked questions