Term Deposit Calculator
Calculate your term deposit returns and compare interest options across Australian banks.
Calculate Term Deposit Returns
Minimum $1,000 for most term deposits
Current rates: 4.50% - 5.50% p.a.
Current TD Rates (Dec 2024)
*Rates vary by institution. Check individual banks.
Compare by Amount
Early Withdrawal
Breaking a term deposit early typically incurs:
- • Interest rate reduction (1-2%)
- • Loss of all accrued interest
- • 31 days notice period
- • Some banks: full interest forfeit
Understanding Term Deposits in Australia
A term deposit (also called a fixed deposit or time deposit) is a savings account where you lock away your money for a set period in exchange for a guaranteed interest rate. In Australia, term deposits are one of the safest investment options as they're covered by the Government Deposit Guarantee up to $250,000 per account holder, per ADI (Authorised Deposit-taking Institution).
How Term Deposits Work
The Basics
- Deposit: You invest a lump sum (minimum varies by bank)
- Term: Choose a fixed period (1 month to 5 years)
- Rate: Interest rate is locked for the entire term
- Maturity: Receive your principal plus interest at end
Interest Payment Options
- At Maturity: Best for maximizing compound growth
- Monthly: Regular income, lower overall return
- Annually: Yearly income payments
- Reinvest: Compound into the principal
Term Deposit vs Other Options
| Feature | Term Deposit | Savings Account | Bonds | Shares |
|---|---|---|---|---|
| Guaranteed Return | ✓ Yes | Variable | ✓ Yes | ✗ No |
| Govt Guarantee | $250,000 | $250,000 | Varies | None |
| Access to Funds | Locked | Anytime | Tradeable | Anytime |
| Typical Returns | 4.5-5.5% | 4.0-5.0% | 4.0-6.0% | 7-10%+ (long term) |
| Risk Level | Very Low | Very Low | Low-Medium | High |
Term Deposit Strategies
Laddering Strategy
Split your deposit across multiple terms to balance liquidity and returns.
Example: $100K split into 5 × $20K TDs with 1, 2, 3, 4, 5 year terms
Rate Chasing
Use shorter terms (3-6 months) when rates are rising to capture higher rates.
Good strategy in rising rate environment
Lock In
Choose longer terms (2-5 years) when rates are expected to fall.
Secure current rates before drops
Government Guarantee
The Financial Claims Scheme (FCS) guarantees deposits up to $250,000 per account holder, per ADI. This means if your bank fails, the government guarantees your deposits. For amounts over $250,000, consider spreading across multiple institutions.
Tax on Term Deposit Interest
Interest earned on term deposits is taxed as ordinary income at your marginal tax rate. Banks report interest to the ATO, and it's pre-filled in your tax return. Here's how much you'll actually keep:
| Income Bracket | Tax Rate | Interest on $50,000 @ 5% | Tax Paid | Net Return |
|---|---|---|---|---|
| $0 - $18,200 | 0% | $2,500 | $0 | $2,500 |
| $18,201 - $45,000 | 16% | $2,500 | $400 | $2,100 |
| $45,001 - $135,000 | 30% | $2,500 | $750 | $1,750 |
| $135,001 - $190,000 | 37% | $2,500 | $925 | $1,575 |
| $190,001+ | 45% | $2,500 | $1,125 | $1,375 |
TFN Withholding Tax
If you don't provide your Tax File Number (TFN) to the bank, they'll withhold 47% of your interest. Always provide your TFN when opening a term deposit to avoid this penalty withholding.