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Term deposit calculator
What will a term deposit actually pay you after tax? Enter the amount, rate and term, choose how the interest is paid and your RWT rate, and see the gross interest, the RWT deducted, the net interest, the maturity value and your effective after-tax return.
Enter the amount you want to put on term deposit to see what it earns.
How the calculator works
A term deposit is the simplest investment there is: a fixed amount, a fixed rate, a fixed date. The bank pays simple interest that accrues every day at the annual rate divided by 365, and hands it over at the frequency you pick: monthly, quarterly, six-monthly, annually or in one go at maturity. Shorter terms usually only offer payment at maturity.
Before the interest reaches you, the bank takes off resident withholding tax at the rate you have given it (33% if you never have). That is why the gross figure on the rate card and the money that lands in your account are different numbers, and why this calculator shows both.
If you have the interest reinvested, each after-tax payment is added to the deposit and the next period earns on the bigger balance, so the deposit compounds at the payment frequency. If it is paid out, the deposit stays the same and you get a regular income. The difference is modest on a one-year deposit and grows with the term.
The comparison table re-runs your deposit over each standard term at the same rate so you can see the shape of longer versus shorter. Real rate cards differ by term, so plug in each term's actual rate before deciding. And remember the money is locked away: breaking a term deposit early usually costs you a chunk of the interest, which this tool does not model.
Term deposit questions, answered
- How is term deposit interest calculated in New Zealand?
- Banks accrue simple interest daily at the advertised annual rate divided by 365, on the balance of the deposit, and pay it at the frequency you choose. A $10,000 deposit at 5% for 12 months earns $10,000 × 5% × 365 ÷ 365 = $500 of gross interest. This calculator does the same, counting the actual days in each payment period from today to the same date the chosen number of months later.
- What is RWT and how much comes off my interest?
- Resident withholding tax is income tax the bank deducts from each interest payment before it reaches you, then passes to Inland Revenue. You choose the rate: 10.5%, 17.5%, 30%, 33% or 39%, and it should match your income tax rate for the year (interest is added to your other income). If you never tell the bank a rate it uses 33%, and if the bank has no IRD number for you it must deduct 45%.
- Which RWT rate should I pick?
- The one that matches the tax bracket your total income lands in: 10.5% up to $15,600, 17.5% to $53,500, 30% to $78,100, 33% to $180,000 and 39% above. Picking too low a rate leaves you with a tax bill at the end of the year; too high means you wait for a refund. Inland Revenue squares it up in your end-of-year assessment either way.
- Should I have interest reinvested or paid out?
- Reinvesting (compounding) adds each after-tax payment to the deposit so the next period earns on a bigger balance, which is worth a little more over the term. Paying it out gives you a regular income from the deposit, which suits people living off their savings. Switch the setting in the calculator to see the difference; on a one-year deposit it is usually a few dollars per $10,000.
- What does the effective after-tax return mean?
- The return you actually keep, as an annual rate. For interest paid out it is simply the net interest divided by the deposit, scaled to a year. For reinvested interest it is the compound annual rate the deposit grew at, so it is slightly above the advertised rate less tax. Either way it is the number to compare against a savings account or a PIE fund's after-tax return.
- Why does my bank's quote differ slightly from this calculator?
- Banks differ on small conventions: whether the maturity day earns interest, how they round each payment to the cent, and how they handle a term that ends on a weekend or the 31st. This tool counts the actual days from today to the maturity date, works on a 365-day year and rounds each payment to the cent, so a difference of a few cents (or a day's interest) is normal. It also ignores fees and the rate reduction banks apply if you break the deposit early.
- Can I use this for a PIE term deposit or a savings account?
- Not directly. A PIE term deposit is taxed at your prescribed investor rate (capped at 28%) instead of RWT, so people on 30%, 33% or 39% keep more; use our PIR calculator to find your rate. A savings account has a variable rate and often bonus conditions. For a plain lump sum growing over years, or regular top-ups, the compound interest calculator is the better fit.
Find the lump sum to lock away.
KeaBudget is the free budget app for Kiwi bank accounts. See what is left after the bills each payday, and how much you can safely put on term deposit without needing it back early. It's live now, and free.
Start using KeaBudget →More free tools
Compound Interest Calculator →PIR Calculator →Savings Goal Planner →Related reading: Compound interest explained: how your money grows. Or see all our free NZ money calculators.