Australia Term Deposit Calculator: Maturity Value and Interest
Work out what an Australian term deposit grows to at maturity — from a lump sum at a fixed interest rate over a set term — and how much interest you earn locking your money away.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Maturity value | Interest earned |
|---|---|---|
| $20k · 5% · 3yr ($23,152.50) | $23,152.50 | $3,152.50 |
| $50k · 4.5% · 2yr | $54,601.25 | $4,601.25 |
| $10k · 5.2% · 5yr | $12,884.83 | $2,884.83 |
| $100k · 4.75% · 1yr | $104,750.00 | $4,750.00 |
How This Calculator Works
Enter the amount you deposit, the fixed annual rate, and the term in years. The calculator compounds the deposit annually and shows the maturity value and the interest earned. A term deposit (TD) pays a guaranteed fixed rate for an agreed term, in exchange for leaving the money untouched until maturity.
The Formula
Future Value of a Lump Sum
PV = present value, r = annual rate, n = number of years
Worked Example
A $20,000 term deposit at 5% for 3 years matures at $23,152.50 — $3,152.50 of interest. An Australian term deposit locks a lump sum with a bank, building society, or credit union at a fixed rate for a chosen term (from a month to several years). The rate is guaranteed for the whole term, so unlike a savings account it won't fall if the cash rate drops — but you generally can't access the money early without notice and an interest penalty.
Key Insight
Term deposits are a staple of conservative Australian saving, and a few features define how they work. The rate is fixed and guaranteed for the term, which is the main appeal — it gives certainty and protects you if interest rates fall, though it also means you miss out if rates rise during the term. Deposits with Australian authorised deposit-taking institutions (banks, building societies, credit unions) are covered up to a cap per account-holder per institution by the government's Financial Claims Scheme, making them very low risk. Interest can be paid at maturity or at intervals (monthly, quarterly, annually) depending on the product; this calculator assumes annual compounding to maturity, so a product paying interest out periodically (rather than reinvesting it) would earn slightly less than shown. Key practical points: breaking a term deposit early usually requires notice and incurs an interest reduction, so only lock away money you won't need; at maturity many banks auto-roll the deposit into a new term at the prevailing (often lower 'rollover') rate unless you give instructions, so diarise the maturity date; and the interest is assessable income — taxed at your marginal rate, with the bank reporting it to the ATO (and withholding at the top rate if you don't supply a Tax File Number). Term deposits suit money earmarked for a known future date and savers wanting capital certainty; for flexibility a high-interest savings account may suit better, and for longer horizons growth assets typically out-earn cash. This calculator shows the gross maturity value at a constant rate; your net return depends on tax and on whether interest compounds or is paid out.
The Financial Claims Scheme: $250k per bank, per person — guaranteed
Australian term deposits with ADIs (Authorised Deposit-taking Institutions) — banks, credit unions, building societies — are protected up to $250,000 per account-holder per ADI under the federal Financial Claims Scheme (FCS). Above $250,000, the depositor is an unsecured creditor of the bank with no government guarantee.
Critical detail: 'per ADI' is the constraint, not per account. Spreading $500,000 across two accounts AT THE SAME BANK gives you $250,000 of cover, not $500,000. Spread across TWO banks: full $500,000 covered. Use the APRA banking institutions database to verify two banks are separate ADIs (some 'brands' share an ADI license — e.g. BankWest and Commonwealth Bank share parent ownership but technically separate ADIs).
Joint accounts: each joint holder gets $250,000 of cover individually. A joint account of $500,000 between spouses is fully protected at the same ADI. Couples often misunderstand this and unnecessarily split deposits across banks when joint accounts would do the job.
Tax on term deposit interest: marginal rate, no special treatment
Term deposit interest is taxed as ordinary income at your marginal rate. Unlike Australian shares (which get the 50% CGT discount on holdings >12 months), interest doesn't qualify for any concessional treatment. For high earners, this can mean keeping only ~55% of stated interest after tax.
TFN withholding trap: if you don't provide your Tax File Number to the bank, they withhold tax at 47% (the top marginal rate plus Medicare Levy) regardless of your actual income. The withholding is reclaimable through your tax return, but creates an unnecessary cash flow hit. Always provide TFN at account opening.
Strategic placement: term deposits inside a self-managed super fund (SMSF) in accumulation phase are taxed at 15%, far below personal rates for most earners. In SMSF pension phase, the rate drops to 0%. For high earners, holding term deposits in a low-income spouse's name, in their SMSF, or via a family trust can dramatically reduce the effective tax rate on interest — though structure costs must justify the saving.
Breaking a TD early: notice period and interest reduction
Australian term deposits are NOT freely withdrawable — early access requires notice (typically 31 days for the major banks) and incurs an interest reduction penalty. The penalty structure: the bank recalculates your interest at a lower rate based on how much of the original term you actually held the money.
Typical penalty schedule: held for less than 20% of term, interest reduced by 90%; 20-40% of term, reduced by 80%; 40-60%, reduced by 60%; 60-80%, reduced by 40%; 80-100%, reduced by 20%. So breaking a $100,000 TD at 5% halfway through a 1-year term: original interest $5,000, penalty reduces to $5,000 × 40% = $2,000 received instead.
Practical implications: never lock money in a TD that you might need (use an offset account or high-yield savings instead). Term length should match certainty about not needing the money. The 31-day notice period also means you can't react to short-term emergencies — plan accordingly. Some 'no-notice' or 'reduced penalty' TD products exist at slightly lower interest rates — useful for conservative savers prioritising flexibility.
Term deposit comparison: cash held vs equivalent investments (2026-27)
After-tax returns at typical Australian marginal tax rates. Assumes 5% term deposit rate, 7% expected return on ASX shares with full franking, 6% return on Australian property (rental + capital).
| Marginal tax rate | TD @5% interest (net) | Shares 7% with franking (net) | Property 6% (net) |
|---|---|---|---|
| 0% (SMSF pension) | 5.00% | ~9.00% (including franking refund) | 5.10% |
| 19% (low income) | 4.05% | 5.67% | 4.86% |
| 32.5% (mid) | 3.38% | 4.73% | 4.05% |
| 37% (higher) | 3.15% | 4.41% | 3.78% |
| 45% (top) | 2.75% | 3.85% | 3.30% |
Plus 2% Medicare Levy for most personal taxpayers (not shown). Franking credits make Australian dividends particularly tax-efficient. Term deposits are best for short-horizon, capital-certain needs — long-horizon money typically belongs elsewhere.
Frequently Asked Questions
How is the term deposit maturity value calculated?
Compound the deposit at the annual rate over the term: maturity = deposit × (1 + rate)^years. $20,000 at 5% for 3 years matures at $23,152.50, earning $3,152.50 of interest. This assumes interest compounds annually and is held to maturity.
What is a term deposit?
A savings product where you lock a lump sum with a bank, building society, or credit union at a fixed interest rate for an agreed term (from about a month to five years). The rate is guaranteed for the whole term, and you generally can't withdraw the money early without notice and an interest penalty.
Is my money safe in a term deposit?
Deposits with Australian authorised deposit-taking institutions are protected up to a cap per account-holder per institution under the government's Financial Claims Scheme, so term deposits are considered very low risk. The trade-off for that safety and certainty is a lower return than growth assets over the long run.
What happens when the term deposit matures?
Unless you give instructions, many banks automatically roll the deposit into a new term at the prevailing rate — often a lower 'rollover' rate — so it's worth diarising the maturity date and reviewing your options. At maturity you can withdraw, add funds, or re-invest at a new rate and term.
Is term deposit interest taxed?
Yes — interest is assessable income, taxed at your marginal rate, and the bank reports it to the ATO. If you don't provide your Tax File Number, the bank withholds tax at the top rate. This calculator shows gross interest before tax, so your net return will be lower depending on your tax position.
References & Authoritative Sources
- APRA — Australian Prudential Regulation Authority — Financial Claims Scheme — deposit protection · consulted May 31, 2026 · Prudential regulator — $250,000 FCS protection per ADI per account-holder
- ATO — Australian Taxation Office — Interest income — tax treatment · consulted May 31, 2026 · Tax authority — TFN withholding, interest income inclusion in tax return
- ASIC — MoneySmart — Term deposits — consumer guidance · consulted May 31, 2026 · Consumer regulator — early withdrawal penalties, notice periods, product comparison tips
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Methodology & Review
The maturity value compounds a lump sum at the annual rate over the term, compounded annually; the interest is the maturity value minus the deposit. It assumes a single fixed rate held to maturity with interest compounding once a year, and does not model interest paid out periodically, monthly compounding, or tax withheld on the interest.
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