Term Deposit Calculator
Work out the interest on a term deposit, what you'll have at maturity, and how much you keep after tax.
Interest paid at maturity is simple interest for terms of 12 months or less. For longer terms it's assumed to compound once a year. Interest paid monthly or annually goes to another account and isn't added to the deposit. The effective annual rate assumes any interest paid out could be reinvested at the same rate.
Printed from ClearCalc (clearcalc.com.au/term-deposit-calculator/). Estimates only, not financial advice.
How term deposit interest is worked out
A term deposit pays a fixed rate for a fixed time. For terms of a year or less, interest is usually simple interest: amount × rate × time. So $10,000 at 4.2% for 12 months earns $420, and the same amount for six months earns $210.
For terms longer than a year, banks usually pay interest annually or let you reinvest it. If interest is added to the deposit each year, it compounds: $10,000 at 4.2% for two years grows by about $858, not $840.
Interest at maturity, monthly or annually?
- At maturity: you get the deposit and all the interest at the end. This usually earns the best rate.
- Monthly: interest is paid into another account each month. Handy for regular income, such as for retirees, but the rate offered is usually a little lower.
- Annually: common for terms of two to five years.
The effective annual rate lets you compare options fairly. A six-month deposit at 4.2% is worth about 4.24% a year if you roll it over at the same rate.
Tax on term deposit interest
Interest is taxable income in the year it's paid. On the $420 example, someone on the 32% rate (30% plus the 2% Medicare levy) pays about $134 in tax, keeping $286. Choose your rate in the calculator to see it, or check the 2026–27 tax rates. If you don't give the bank your tax file number, it must withhold tax at 47%, which you can claim back in your tax return.
Things to check before you invest
- Break fees and notice periods. Most term deposits need 31 days' notice to withdraw early, and you'll usually get a lower rate.
- Automatic rollover. Many banks roll your money into a new term at their standard rate, which can be much lower. Set a reminder before maturity.
- The government guarantee covers deposits up to $250,000 per person, per authorised bank, building society or credit union.
Saving towards a target rather than locking money away? Try the savings goal calculator or the compound interest calculator.
Results are estimates only. Your bank's exact interest may differ slightly because of how it counts days.
Frequently asked questions
How much interest will I earn on $10,000 in a term deposit?
At 4.2% for 12 months, $420 before tax. For six months it's $210, and for two years with interest compounding annually it's about $858.
Are term deposits safe?
Deposits with Australian banks, building societies and credit unions are guaranteed by the government up to $250,000 per person, per institution, under the Financial Claims Scheme.
Can I withdraw a term deposit early?
Usually yes, but you'll typically need to give 31 days' notice and the bank will cut the interest rate you receive. Check the terms before you invest.
Is a term deposit better than a savings account?
A term deposit locks in your rate, which helps if rates are falling. A savings account is flexible and can pay a similar or higher bonus rate, but the rate can change at any time.
Official sources used for this calculator include: Moneysmart – Personal loans, Moneysmart – Credit cards, Moneysmart – Saving. See how we calculate.
Reviewed by the ClearCalc team. Last reviewed October 2026. This calculator gives an estimate for general information only. Check important figures with the relevant government agency or a licensed professional.