Finance Calc App

Term deposit calculator

See what a term deposit will be worth at maturity — the interest earned and effective annual yield. A fixed rate locked in for a fixed term, covered by the government guarantee.

By Mitch Duncan Last reviewed Methodology

Deposit details

Many term deposit products pay interest at maturity or annually. Choosing more frequent compounding raises the effective yield if interest is added to the balance rather than paid out.

Value at maturity
$10,920.25
Interest earned
$920.25
Breakdown
Deposit
$10,000.00
Nominal rate
4.50%
Effective annual yield (APY)
4.50%
Term
2 years
Your AU term deposit

Protection: Covered by the government's Financial Claims Scheme up to $250,000 per account-holder, per institution.

Tax: Interest is taxable at your marginal rate in the year it's paid — declare it on your tax return.

Figures assume the rate is fixed for the whole term and interest is left to compound (unless you pick "at maturity"). Early withdrawal usually forfeits some interest or isn't permitted. This is an estimate, not financial advice.

Want the full picture? Dollar-Cost Averaging Explained →

How a term deposit works

A term deposit locks a sum with an Australian bank, credit union, or building society for a fixed term — from one month to five years — at a fixed rate. Your capital is safe and deposits are covered by the government's Financial Claims Scheme up to $250,000 per account-holder, per institution.

Maturity value = deposit × (1 + rate ÷ n)^(n × years)

Interest frequency and yield

On terms of a year or less, interest is usually paid at maturity. On longer terms you can often choose monthly, quarterly, or annual payments. If interest is added to the deposit rather than paid to a linked account, it compounds and the effective yield rises above the advertised rate.

Tax

Term-deposit interest is taxable at your marginal tax rate in the year it's paid and must be declared on your tax return. If you haven't given your bank a Tax File Number, the bank withholds tax at the top rate, so supplying your TFN avoids over-withholding.

Breaking a term deposit

Withdrawing early generally requires notice (often 31 days) and triggers an interest-rate reduction as a penalty. Because rates move, some savers ladder several deposits with staggered maturities to balance access and return.

What this calculator doesn't cover

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Frequently asked questions

How is a term deposit's maturity value calculated?
Compound the deposit at the fixed rate over the term: maturity = deposit × (1 + rate ÷ n)^(n × years), where n is how often interest compounds per year. If interest is paid out each period instead of added, it's simple interest: deposit × (1 + rate × years). The calculator above does both depending on the compounding option you pick.
What's the difference between the nominal rate and the effective yield?
The nominal rate is the advertised headline rate. The effective annual yield reflects compounding — if interest is added to the balance monthly or quarterly and left there, it earns interest itself, so you end up slightly ahead of the headline rate over a year. If interest is paid out to another account, there's no compounding and the two are equal.
Does compounding frequency change how much I earn?
Only if the interest is left in the deposit to compound. More frequent compounding (monthly vs annually) raises the effective yield a little. But many fixed-term products pay interest out at maturity or to a linked account, in which case the frequency doesn't change your total — you simply receive the simple interest on the principal.
Can I withdraw money before the term ends?
Usually not without a penalty. Most fixed-term deposits either forbid early withdrawal or forfeit a chunk of the interest, and some require notice. Because the money is locked away, keep a separate emergency fund in an easy-access account so you're not forced to break the deposit.
Should I choose a longer or shorter term?
It depends on the rate outlook and when you'll need the money. A longer term protects you if rates fall but locks you out of higher rates if they rise; a shorter term keeps you flexible. Some savers split their cash across several deposits maturing at staggered dates — a 'ladder' — to balance access and return.
Is the interest taxable?
Generally yes — interest is usually treated as taxable income, though the exact rules and any allowances depend on your country and whether the deposit sits inside a tax-sheltered account. The calculator shows the gross maturity value before any tax. Check your local rules or hold the deposit in a tax-advantaged wrapper where available.

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