Term Deposit Calculator — Interest & After-Tax Return

Banks quote the headline rate; this shows what actually lands in your account at maturity — and what's left after the ATO takes its share at your marginal rate.

Used to work out tax on the interest
Interest at maturity
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Uses official 2026-27 rates (last reviewed July 2026). Estimates only — see assumptions below.

The after-tax rate is the only rate

Term deposit interest is ordinary income, taxed at your marginal rate in the year it's credited. A 4.6% deposit for someone in the 32% bracket (30% + Medicare) really pays 3.1%. If inflation is running near 3%, the real return is roughly zero — you're preserving purchasing power, not growing it. That's a fine job for money that must not shrink; just don't mistake it for investing.

Term deposit vs the alternatives

OptionReturnCatch
Term depositLocked rate, e.g. 4.6%Money locked; interest taxed
High-interest savingsOften similar or higherBonus-rate hoops; rate can drop any month
Mortgage offsetYour mortgage rate, tax-freeNeed a mortgage — but usually beats both above

If you hold a mortgage at 5.75%, an offset "earns" 5.75% tax-free — equivalent to a term deposit paying over 8% pre-tax for a middle-bracket earner. Term deposits mainly make sense for people without a mortgage, or entities (like SMSFs in pension phase) that pay little tax.

Laddering: rate insurance for free

Split a big deposit into thirds across 6, 12 and 24-month terms. Something matures regularly (liquidity), and you're never fully locked at a bad rate in either direction. Banks rely on maturity inertia — the auto-rollover rate is routinely 0.5–1% below the advertised rate for new money. Diarise every maturity date; the ten-minute phone call at rollover is the best-paid admin in banking.

Deposits up to $250,000 per person, per banking licence are government-guaranteed under the Financial Claims Scheme. Above that, split across different banks — noting that many brands share one licence (e.g. some big-bank subsidiaries), so check the licence, not the logo.

Breaking early

You can usually break a term deposit with 31 days' notice, forfeiting most or all interest earned. If there's any realistic chance you'll need the money, a high-interest savings account's flexibility is worth more than the last 0.2% of rate.

Frequently asked questions

How much interest does $50,000 earn in a term deposit?
At 4.6% for 12 months, $2,300 before tax — about $1,564 after tax for someone in the 32% marginal bracket. The calculator shows your exact after-tax figure.
Are term deposits safe?
Deposits up to $250,000 per person per licensed bank are guaranteed by the Australian Government's Financial Claims Scheme. Amounts above that should be spread across separately-licensed banks.
Is a term deposit better than a savings account?
A term deposit locks the rate (protection if rates fall, a cost if they rise) and locks your money. High-interest savings accounts often pay similar headline rates but with conditions. If you have a mortgage, the offset account usually beats both after tax.
What happens at maturity if I do nothing?
Most banks auto-roll you into a new term at their standard (usually much lower) rate. You typically get a short grace period of about 7 days to exit — set a reminder for every maturity date.
When do I pay tax on term deposit interest?
In the financial year the interest is credited or made available. A 2-year deposit paying at maturity puts all the interest into one year's return — which can matter for HECS, family tax benefits and offsets.

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