How the Term Deposit Calculator Works (With a Worked Example)
Calculates interest earned on a term deposit paid at maturity. This guide walks through what each input means, the formula behind the answer and a worked example using typical Australian figures. You can follow along in the free Term Deposit Calculator.
Why it matters
Australians save and invest through bank accounts, term deposits, shares, ETFs and property. Interest and dividends are taxable, franking credits can offset tax on dividends, and inflation steadily reduces the value of money that isn’t growing.
What you need to enter
The calculator asks for 3 inputs. The table shows each one with the example value used later in this guide.
| Input | Example value |
|---|---|
| Deposit amount ($) | 20000 |
| Interest rate (%) | 4.5 |
| Term (months) | 12 |
The formula
Interest = amount × rate × months ÷ 12.
Worked example
Entering the example values above gives these results:
| Result | Value |
|---|---|
| Interest at maturity | $900.00 |
| Balance at maturity | $20,900.00 |
The headline figure is $900.00 (interest at maturity). Change any input in the calculator and every result updates instantly, so you can test different scenarios side by side.
How the interest at maturity changes with deposit amount
The table below keeps every other input at the example value and moves only “Deposit amount ($)” up and down by 10% and 20%. It shows how sensitive the interest at maturity is to that one figure.
| Deposit amount ($) | Interest at maturity |
|---|---|
| 16,000 | $720.00 |
| 18,000 | $810.00 |
| 20,000 | $900.00 |
| 22,000 | $990.00 |
| 24,000 | $1,080.00 |
At 16,000 the result is $720.00; at 24,000 it is $1,080.00. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.
A practical tip
Many term deposits roll over automatically at a lower rate. Set a reminder before maturity.
Keep going
Before relying on the number, read Getting the Most From a Term Deposit Calculator: Tips and Common Errors. You might also find these guides useful:
- Simple Interest Calculator: Formula, Example and What the Result Means
- Using a Inflation Calculator in Australia: A Step-by-Step Guide
- Franking Credits Calculator Explained for Australians
Frequently asked questions
- Are investment returns guaranteed?
- Only some products, such as term deposits, have fixed rates. Share and fund returns vary and can be negative.
- Is my bank deposit protected?
- The Financial Claims Scheme guarantees deposits up to $250,000 per account holder per authorised bank.
- Is this investment advice?
- No. The calculators provide general information only.
Run your own numbers in the Term Deposit Calculator.
Open the calculatorGeneral information only. Rates and thresholds change, usually on 1 July. Confirm current figures with the ATO or the relevant authority, and get personal advice for decisions about your situation.