Term deposit calculator
What a fixed-rate deposit pays at maturity, and how much difference the interest-payment frequency makes.
Balance after 2 years
$54,952
9% of it is interest, not your own money
- You put in
- $50,000
- Interest earned
- $4,952.18
- Growth multiple
- 1.1
| Starting balance | $50,000 |
|---|---|
| Contributions | $0.00 |
| Interest | $4,952.18 |
| Final balance | $54,952 |
$50,000 at 4.75% for two years, compounded quarterly, returns about $4,970 of interest — $110 more than annual payment.
How this is calculated
How this is calculated
Fixed rate, fixed term
The rate is locked at the start and applied to the balance each period. Interest paid quarterly compounds three more times a year than annual payment, which on 4.75% is worth roughly 0.08 points of effective return.
FV = P(1 + r/n)^(n·t)Effective rate versus quoted rate
A 4.75% rate compounded quarterly is an effective 4.84% a year. Comparing two deposits on their quoted rates alone is only fair when both pay interest at the same frequency.
effective = (1 + r/n)^n − 1Worked example: $50,000 at 4.75% for two years
| Deposit | $50,000 |
|---|---|
| Rate | 4.75% |
| Term | 2 years |
| Interest paid | Quarterly |
| At maturity | about $54,970 |
|---|---|
| Interest | about $4,970 |
| Effective rate | 4.84% |
Interest is taxable in most countries in the year it is credited, so at a 35% marginal rate the real return here is closer to 3.1% before inflation.
What this assumes
- The rate is fixed for the whole term.
- Interest is reinvested, not paid out.
- No tax is deducted at source.
- The deposit is held to maturity.
Where this commonly goes wrong
- Breaking a term deposit early typically forfeits 20–100% of the interest earned and may add an administrative fee.
- Interest is taxable in the year it is credited, so a five-year deposit paying at maturity can still create a tax bill each year in some jurisdictions.
- Automatic rollover at maturity often lands on the standard rate rather than the promotional one, which can be one to two points lower.
Questions
How much does a term deposit pay?
The rate is fixed at the start, so the answer is arithmetic: $50,000 at 4.75% for two years with quarterly interest returns about $4,970. The only variables are the rate you lock in and how often interest is paid.
Does interest frequency matter?
A little. Quarterly rather than annual payment on 4.75% adds about 0.08 percentage points of effective return — roughly $110 over two years on $50,000. Compare deposits on effective rate, not the quoted one.
What happens if I withdraw early?
Most providers apply an interest reduction of 20% to 100% of what has accrued, sometimes with an administrative fee and a notice period of up to 31 days. Assume the interest is gone rather than the capital.
Term deposit or high-interest savings?
A deposit locks the rate, which wins when rates are about to fall and loses when they rise. A savings account stays flexible but its headline rate is often conditional on monthly deposit and no-withdrawal rules.
Is the interest taxed?
In most countries yes, as ordinary income in the year it is credited — not when the deposit matures. At a 35% marginal rate a 4.75% deposit nets about 3.1% before inflation, which is worth checking against a mortgage offset.
What happens at maturity?
Unless you give instructions, most providers roll the deposit into a new term at their current standard rate, which is frequently below the promotional rate you originally accepted. Set a reminder before the maturity date.
Related tools
Sources
This calculator does arithmetic on the figures you enter. It does not account for tax, fees, or your personal circumstances.
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