How to use the Term Deposit Calculator
- 1 Enter the deposit.
- 2 Enter the interest rate.
- 3 Choose the term.
- 4 Enter your other income to see the tax.
Worked example
$50,000 for 12 months at 4.6% with $80,000 of other income. The deposit earns $2,300, so it matures at $52,300. At a 32% marginal rate including Medicare, tax is about $736, leaving about $1,564 of interest after tax. A high-interest savings account at a similar rate would pay a little more if interest is added monthly, but the rate could change.
Features
Interest at maturity
Simple interest for the term.
After-tax return
Tax at your marginal rate including Medicare.
Any term
3 months to 5 years.
When to use it
Comparing banks
Compare term deposit rates.
Savings accounts
Compare with a high-interest savings account.
Retirees
Plan income from deposits.
Short-term goals
Lock away money for a known expense.
Frequently asked questions
Are term deposits safe?
Deposits up to $250,000 per person per bank are protected by the Financial Claims Scheme.
Is term deposit interest taxed?
Yes, as income in the year it is paid or credited.
Can I break a term deposit early?
Usually with 31 days' notice and a reduced rate.
What happens at maturity?
Many roll over automatically. Check rates before they do.
How is interest paid?
At maturity for short terms, or monthly or yearly for longer terms.
Term deposit or savings account?
Term deposits lock in a rate; savings accounts give access but rates can change.
Should I provide my TFN?
Yes. Without it, the bank must withhold tax at 47%.
What is a ladder?
Splitting money across terms so part matures regularly.
Do rates change?
Rates are fixed for the term.
What about inflation?
After tax and inflation, real returns can be small.
What is the best term?
It depends on when you need the money and current rates. Short terms suit uncertain plans.
Do term deposits suit retirees?
They give predictable income, often used alongside account-based pensions.
What happens if rates rise?
Your rate is fixed, so you miss out until it matures.
Can I add money?
No. You open a new deposit to add more.
Is interest paid monthly better?
Monthly interest usually comes with a slightly lower rate.
How is interest calculated on a term deposit?
Interest is the deposit times the yearly rate times the fraction of a year. For terms over a year, interest may be paid yearly and not compounded unless you reinvest it.
What happens to interest if the bank fails?
The Financial Claims Scheme covers deposits and interest up to $250,000 per person per authorised bank, building society or credit union.
Are term deposits good for a home deposit?
They can be, if your purchase date is known. Choose a term that ends before you need the money for settlement.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated