Term Deposit Calculator
Interest, Tax and the Real Return

Principal × interest rate × time. $50,000 at 4.50% for 12 months is $2,250; for 6 months it is half that.

If interest is paid monthly, quarterly or annually and you reinvest it, each payment starts earning interest too, so you earn slightly more — $4,699.51 over 2 years compounding monthly, against $4,500.00 if paid out.

Yes. It is assessable income in the year it is paid or credited, taxed at your marginal rate — for 2026-27 that is 0%, 17%, 32%, 39%, 47% including the 2% Medicare levy.

If you do not give the bank your tax file number or an exemption, it must withhold tax at the top rate from the interest. For a deposit spanning two financial years, interest paid at maturity is generally taxed in the year it is paid.

Compare the after-tax rate with inflation. Annual CPI inflation was 3.94% to the June quarter 2026 (ABS).

At 4.50% before tax, a 32% taxpayer keeps 3.06%, a real return of -0.85%. A term deposit protects the dollar amount, not its buying power.

Yes, up to $250,000 per account holder per authorised deposit-taking institution (ADI) under the Australian Government's Financial Claims Scheme, administered by APRA, for Australian-dollar deposits with Australian-incorporated banks, building societies and credit unions. Brands that share one banking licence count as one institution, so spreading money across them does not raise the cover.

Usually, but at a cost: most banks require notice (commonly 31 days) and reduce the interest rate on an early withdrawal. Check your bank's terms before you lock money away, and keep an emergency buffer in a savings account instead.