Interest Calculator Australia
See how your savings, term deposit or investment could grow. Add regular deposits, choose how often interest is paid, and take tax and inflation into account, all in Australian dollars.
Estimate only. Interest is worked out daily and added at the interval you choose, at a fixed rate. Tax is taken as interest is added, whereas in real life you settle it at tax time. Your bank's rates, conditions and bonus terms will differ, so check with them or a licensed adviser.
Year-by-year schedule
| Year | Deposits | Interest | Tax | Balance |
|---|
How your balance grows
Your balance against the money you've put in and the interest you've earned along the way.
Deposited:
Interest:
How this interest calculator works
Put in what you're starting with, how much you plan to add regularly, the interest rate and how long you'll leave it. The calculator shows what your balance could be at the end, how much of that is your own money, and how much is interest. It works for a savings account, a term deposit or any investment where you're assuming a steady rate of return.
Behind the scenes, interest is worked out every day on your balance and then added to the account at the interval you choose: daily, monthly, quarterly and so on. That's how most Australian savings accounts behave, with interest calculated daily and paid monthly. Regular deposits can be monthly, fortnightly or weekly, so you can line them up with your pay.
A quick example. You start with $10,000 and add $250 a month at 4.5% p.a., with interest added monthly. After 10 years your balance would be about $53,500. You'd have put in $40,000 yourself, so roughly $13,500 is interest. Change the rate or the time period and you'll see how much work the interest is doing.
Simple interest vs compound interest
Simple interest is calculated only on the amount you started with. The interest you've already earned doesn't earn anything itself, so growth is a straight line. Compound interest is calculated on your balance including earlier interest, so each period's interest is a bit bigger than the last.
In the compound formula, n is the number of times interest is added per year. Take $10,000 at 5% for 10 years. With simple interest you earn $500 a year, finishing with $15,000. With interest compounded yearly you end up with about $16,289. That extra $1,289 is the interest earning its own interest.
Does it matter how often interest is added?
A little, and the gap grows with bigger balances and longer timeframes. The more often interest is added, the sooner it starts earning interest of its own. Here's $10,000 at 5% p.a. over 10 years, with no extra deposits:
| Interest added | Balance after 10 years | Interest earned |
|---|---|---|
| Yearly | about $16,289 | about $6,289 |
| Monthly | about $16,470 | about $6,470 |
| Daily | about $16,487 | about $6,487 |
Going from yearly to monthly adds about $180 here. Going from monthly to daily adds only about $17. So it's worth checking, but a higher interest rate usually matters far more than a more frequent payment schedule.
Savings accounts and term deposits
Most Australian savings accounts have a base rate and a bonus rate. The bonus usually only applies if you meet conditions, such as depositing a minimum amount each month and making no withdrawals. If you miss a month, you may drop back to the base rate, so enter the rate you expect to earn on average. A term deposit locks your money away for a fixed period at a fixed rate, and interest may be paid monthly, annually or at the end. Breaking it early can mean a lower rate or a notice period.
Deposits with Australian banks, credit unions and building societies are covered by the Financial Claims Scheme, which guarantees balances up to a set limit per person, per institution. Check the current limit and which institutions are covered on the official website before you decide where to park large amounts.
Tax on interest
In Australia, interest you earn is generally assessable income and taxed at your marginal tax rate, which depends on your total income for the year. The 2% Medicare levy may also apply. If you want to see the effect, open the "Tax & inflation" box and enter your rate. Note that the calculator takes tax out as each bit of interest is added, which is a little harsher than real life, where you settle up at tax time. Banks can also withhold tax from your interest if you haven't given them your tax file number, so it's worth providing it.
This calculator is built for savings and investments with a fixed rate. Superannuation is taxed differently, and share or fund returns aren't fixed or guaranteed, so treat those results as a rough guide only.
Inflation and what your money can buy
A balance of $50,000 in ten years won't buy what $50,000 buys today. Prices tend to rise over time, and the Reserve Bank aims to keep inflation between 2 and 3% a year. The calculator turns your final balance into "today's dollars" using the inflation figure you enter, so you can see what it might be worth in everyday terms. If your savings rate is below inflation, your balance can grow while its buying power shrinks.
The Rule of 72
For a quick estimate without a calculator, divide 72 by the interest rate. The answer is roughly how many years it takes for your money to double. At 6%, that's about 12 years. At 8%, about 9 years. It's an approximation, but it's close enough to sanity-check what you see above.
Ways to grow your savings faster
Start early, because time does more than almost anything else. Set up an automatic transfer on payday so saving happens before spending does. Compare rates regularly, since the best deal often changes, and read the bonus conditions before you assume you'll earn them. Leave the interest in the account rather than withdrawing it, and watch out for fees that quietly eat into your return. Even a small regular deposit, left alone for years, can add up to more than a one-off lump sum.
If you're thinking about borrowing rather than saving, our mortgage calculator, car loan calculator and business loan calculator show how interest works against you on a loan.
Frequently asked questions
What interest rate should I use?
Use the rate your bank or provider is offering, and if the bonus rate has conditions, use a figure you're confident you'll earn. For long-term investments, remember returns aren't guaranteed, so try a few lower and higher rates to see the range.
What's the difference between simple and compound interest?
Simple interest is calculated only on your original amount. Compound interest is calculated on your balance including interest already earned, so it grows faster over time.
How does compounding frequency change my result?
The more often interest is added, the more you earn, though the difference is small. On $10,000 at 5% over 10 years, monthly compounding earns about $180 more than yearly.
Is interest from savings taxed in Australia?
Generally yes. Interest is usually assessable income taxed at your marginal rate, and the Medicare levy may apply. Your bank reports it, and it appears in your tax return. Check with the ATO or a tax professional for your situation.
Does this calculator work for a term deposit?
Yes. Enter your starting amount, set deposits to $0, use the term deposit rate and choose how often interest is paid. Term deposits don't usually allow extra deposits during the term.
What does "in today's dollars" mean?
It's your final balance adjusted for the inflation rate you enter, so you can see what it might buy in terms of current prices.
Can I use it for superannuation?
Only as a rough guide. Super returns vary from year to year and are taxed differently, so a fixed rate won't match what your fund actually delivers.
How accurate are the results?
They're estimates based on a fixed interest rate and the figures you enter. Real rates change, banks calculate interest in slightly different ways, and tax is paid at tax time, so confirm details with your provider.
This calculator provides general information only and isn't financial, tax or investment advice. It doesn't consider your personal circumstances, and the results are estimates, not predictions or guarantees. Speak with a licensed financial adviser or registered tax agent before making a decision, and check current rates and conditions with your bank or provider.
More tools: compound interest calculator, simple interest calculator, savings calculator and investment calculator.