Term Deposit Calculator — Australia (After Tax)
Interest on an Australian term deposit at maturity or compounded, the tax on it at your 2026–27 marginal rate, after-tax and real return after inflation, and the $250,000 Financial Claims Scheme guarantee.
| Value at maturity | — |
|---|---|
| Effective annual rate | — |
| Tax on the interest | — |
| After-tax interest | — |
| Monthly income if paid out | — |
| Real return after tax and inflation | — |
| Government guarantee | — |
In short
Term deposit interest is taxed at your marginal rate in the year it is paid — $50,000 at 4.4% for a year earns $2,200, loses $704 to tax for someone on $90,000 (32% including Medicare) and nets $1,496, a 2.99% after-tax yield that only matches 3% inflation; deposits are guaranteed up to $250,000 per person per bank under the Financial Claims Scheme.
Who this is for: Savers comparing term-deposit offers and checking what they keep after tax and inflation.
Term deposit returns after tax
A term deposit pays a fixed rate for a fixed term. Interest paid at maturity is simple interest; interest credited monthly or annually and left in the account compounds, giving a slightly higher effective yield — though banks usually pay a lower rate for monthly payment. The catch for Australians is tax: interest is ordinary income taxed at your marginal rate in the year it is paid, so at 4.4% a saver on $90,000 keeps only about 2.9% after tax, and after 3% inflation the real return is close to zero.
The calculator uses the 2026–27 tax scale to work out the tax on the interest given your other income, shows the real return, and checks the Financial Claims Scheme $250,000 guarantee per person per bank.
See also: Australian Income Tax Calculator 2026–27, Superannuation Calculator 2026–27, Home Loan Repayment Calculator — Australia, Savings Goal Calculator.
Assumptions
- Simple interest when paid at maturity or paid out; compounding at the chosen frequency when reinvested.
- Tax = tax on (other income + interest) minus tax on other income, 2026–27 scale with LITO and Medicare.
- All interest assumed to fall in one financial year; TFN quoted (no 47% withholding).
- Real return deflates the after-tax yield by the inflation rate you enter.
Worked example
Interest $2,200; maturity value $52,200. Tax at the 32% marginal rate (30% + Medicare) = $704, leaving $1,496 — 68% of the gross. After-tax yield 2.99%; at 3% inflation the real return is about −0.01%: the deposit roughly holds its value. All $50,000 is covered by the FCS.
Frequently asked questions
Is term deposit interest taxed?
Yes — at your marginal rate, in the financial year it is paid or credited; the bank reports it to the ATO and pre-fills your return.
Are term deposits safe?
Deposits with an Australian ADI are guaranteed by the government up to $250,000 per person per institution under the Financial Claims Scheme.
Monthly or at maturity?
At maturity usually pays 0.05–0.20% more; choose monthly only if you need the income.
Can I withdraw early?
Only with 31 days’ notice and an interest reduction that can wipe out most of the return; use a high-interest savings account for money you may need.
What happens at maturity?
Unless you instruct otherwise the bank rolls it over, often at a lower standard rate — set a reminder for the grace period (usually 7 days).
Term deposit or offset account?
If you have a mortgage, money in an offset ‘earns’ your mortgage rate tax-free, which almost always beats an after-tax deposit rate.
Do I need to declare interest if the bank reports it?
Yes — it is pre-filled in your return but still assessable; check the amount matches your statements.
Are there term deposits for SMSFs or companies?
Yes, at similar rates; an SMSF in pension phase pays no tax on the interest.
Related calculators
See all Australia calculators → · All free online calculators
Found an error? Report it — tell us the inputs, the result you got, what you expected and the rule or source. Confirmed corrections are published within a week.