Tax starts at 0 because the rate differs by country. Enter yours to see the net amount.
Simple or compound changes everything but the first year
With simple interest only the original sum earns; with compound interest the interest joins in and earns too. Over twelve months the two are nearly identical. Over ten years the gap is large enough that it is the first thing worth checking in the terms.
Compare on the net amount, not the headline rate
Interest is usually taxed at source, so the rate on the poster is not the rate you receive. Once you enter your own tax rate, the net figure below is the number that actually lets you compare two products.
Breaking the term rewrites the calculation
Fixed-term deposits nearly always pay a much lower rate if you withdraw early — often close to nothing. This assumes you hold to maturity, so money you might need sooner will not behave like the result here.
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Frequently asked questions
Q. Which should I pick if both are offered at the same rate?
Compound, always — it can only pay more. The reason simple interest still exists is that products offering it usually quote a slightly higher rate to compensate, so compare the final amounts rather than the rates.
Q. What tax rate should I enter?
Whatever your country withholds on interest income, as a percentage. It varies widely and often depends on the account type, so the field starts at zero rather than guessing.
Q. Does the compound option account for monthly compounding?
This one compounds annually. Monthly compounding on the same nominal rate ends up slightly higher; for a precise monthly schedule use the compound interest calculator.