Term Deposit Calculator

How to use the term deposit calculator

This calculator uses live rates from New Zealand’s major banks, updated daily, to help you compare potential returns on your term deposit investments. Simply enter your deposit amount, choose your preferred term length, and optionally select a specific bank to see instant calculations.

Understanding your results

Total Return: Your original deposit plus all interest earned over the investment term.

Interest Earned: The amount of money your deposit will generate in interest payments.

Rate Breakdown: Compare up to five different banks side-by-side, ranked by total return to help identify the best options for your investment goals.

Interest payment options

The calculator accounts for different interest payment frequencies, each affecting your total returns:

At Maturity: Interest is paid when your term deposit expires. This typically uses simple interest calculation and may offer higher advertised rates.

Regular Payments: Monthly, quarterly, or annual interest payments allow you to access earnings throughout the investment period. These options typically use compound interest calculations.

Compounding Effect: When interest payments remain invested, they earn additional interest over time, potentially increasing your total returns compared to simple interest calculations.

Factors affecting term deposit returns

Term Length: Longer terms often offer higher interest rates but lock your money away for extended periods. Compare different term lengths to find the right balance for your financial goals.

Deposit Amount: Some banks offer tiered rates with better returns for larger deposits. Check with individual banks for minimum deposit requirements and rate tiers.

Interest Rate Environment: Term deposit rates fluctuate based on Reserve Bank of New Zealand (RBNZ) Official Cash Rate changes and broader economic conditions.

Competition: Banks adjust rates competitively, so comparing multiple providers regularly can help you secure better returns.

Tax considerations for NZ term deposits

All term deposit interest earnings are subject to Resident Withholding Tax (RWT) in New Zealand. Your RWT rate depends on your annual income:

• 10.5%: Annual income up to $14,000
• 17.5%: Annual income $14,001 to $48,000
• 30%: Annual income $48,001 to $70,000
• 33%: Annual income over $70,000

Banks deduct RWT automatically from interest payments. If you’re a provisional taxpayer or have complex tax situations, consult with a tax professional about your term deposit planning.

Comparing calculator results with real offers

While this calculator provides accurate estimates based on current advertised rates, actual terms may vary when you apply. Consider these factors:

Rate Changes: Banks can adjust rates between your calculation and application. Rates shown reflect the most recent data available.

Individual Circumstances: Your existing banking relationships, deposit history, or negotiation may influence final offered rates.

Additional Features: Some term deposits include features like rate step-ups, early access options, or relationship bonuses that aren’t reflected in basic rate comparisons.

Terms and Conditions: Always review specific terms, fees, and penalty provisions before committing to any term deposit.

Making informed investment decisions

Diversification: Consider spreading investments across multiple terms or providers to balance returns with flexibility.

Liquidity Needs: Ensure you won’t need access to deposited funds during the term, as early withdrawal typically incurs penalties.

Rate Outlook: Consider current and expected interest rate trends when choosing term lengths.

Alternative Investments: Compare term deposit returns with other investment options that might suit your risk tolerance and time horizon.

Getting the most from term deposits

Shop Around: Use this calculator to compare multiple banks and identify the best rates for your specific requirements.

Consider Timing: Monitor rate trends and consider timing your investment to capture favorable rate movements.

Review Regularly: As term deposits mature, recalculate and compare current market rates before reinvesting.

Relationship Banking: Existing customers sometimes receive preferential rates, so check with your current bank for special offers.

This calculator provides estimates based on standard calculation methods and current advertised rates. For definitive terms and conditions, always confirm details directly with your chosen financial institution before making investment commitments.